Hyperinflation is defined as the exponential growth in inflation. This is typically brought by the rapid increase in supply of paper money.
In most cases, this is because of the unregulated printing of the fiat currency.
How Precious Metal like Gold is Impacted throughout Hyperinflation?
It is quite unfortunate to say but, there is no accurate percentage in which inflation turns from “ordinary inflation” to “Hyperinflation”. Having said that, you can’t just say that 9.9 percent inflation is just normal but 10 percent inflation is considered hyperinflation.
In most cases, hyperinflation is getting worse progressively. Every single month, the rate of inflation only keeps increasing until there’s a hyperbolic curve.
Normally, hyperinflation is taking place due to the lack of a reliable and dependable exchange system. When this sort of thing happens, it frequently resulted to the breakdown of society. In the event that this occurs, it creates a sort of “wild west” atmosphere.
This is never good in the economy as a whole as everything will be negatively affected, even the price of gold. The only difference though is, gold stores its worth and value. And even with hyperinflation, you have a backup by selling gold in its own worth.