Hyperdeflation

Hyperdeflation has three components: it’s faster (ergo the “hyper”), it’s negative (ergo the “de”), and it affects prices (that’s what’s “deflating” before our eyes).

Hyperdeflation (the opposite of hyperinflation, where inflation goes up super fast) can happen when the buying-power of a currency rises quickly. If you’re thinking that all sounds fine and dandy, well it is...if you don’t have any debt. Just as hyperinflation erodes the value of currency and debt, hyperdeflation amps up the value of currency and debt.

Hyperdeflation, like hyperinflation, once begun, is likely to continue in a feedback loop, spiraling out of control to the point where people start losing confidence in the currency. That’s when the government’s gotta step in and show that currency who’s boss.