Isaiah Charles K_ Martin

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What is hyperinflation and how does it affect currencies?

Hyperinflation is runaway inflation, typically exceeding 50% per month, destroying currency value. Historical examples include Zimbabwe in the 2000s and Venezuela more recently. In forex, hyperinflated currencies collapse, often replaced by USD or other stable currencies in practice. Institutions avoid exposure entirely, while speculators may exploit parallel markets. Retail traders learn that currency value is not guaranteed—it relies on trust and monetary discipline. Hyperinflation demonstrates the extreme risk of poor governance and excessive money printing. For forex markets, it is a reminder that stability is fragile and can vanish under systemic mismanagement.