What is the difference between inflation and hyperinflation? 2 things that differentiate these terms

By July 31, 2017 Business, money No Comments

Whatever these terms mean, there is one thing that is certain about these two financial terms: They both represent really bad news for your finances. Now, since we all know they mean bad news as they basically mean all the money you are earning is worthless since it is not enough to fulfill your needs, I would like to venture a bit more in what really differentiates them.

1.Let’s begin to differentiate them by defining what each term means

When the actual currency in your country is worth less than it was worth in the last fiscal and accounting year, then you my friend have been struck by inflation.

Now, I want you to get one thing straight. Even the countries with the best economies worldwide can experience inflation. The problem rises when the percentage of inflation is higher than it should be.

Now, when it comes to hyperinflation, you reach a point of no return. Basically the value of your incomes goes down the drain and the economy takes a free fall when it comes to prices and people being able to afford certain goods and services.

2.Which one is the worst?

Taking these definitions into consideration, you might notice that when it comes to inflation, the economy may have ways in which they can ensure the pattern of inflation does not increase throughout the years.

Now, when it comes to hyperinflation, you can see how basically the economy gets to a point of no return and here is where the money situation gets a bit tricky.

We can clearly see that hyperinflation is the worst of the worst as your money will basically be worthless

So, if we are going to compare and make conclusions of which term is worse and which term hits your economy the most, we can clearly see that hyperinflation is the worst of the worst as your money will basically be worthless because the patterns and inflation behaviors really do become unpredictable and this obviously takes a toll and it is a big hit to the money you earned and worked so hard for. So, try to make sure your country’s economy never gets to the point of hyperinflation as this will mean really bad news for you.

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