Hyperinflations — annual inflation above 100 percent — have the same appeal as car accidents, it’s hard to look away. Even better, we know how they work: government deficits financed by printing money. The more money you print, the less it’s worth. It’s not complicated.
Venezuela is the latest to join the club. Hyperinflation expert Steve Hanke estimates the inflation rate at 700 percent, which means currency loses one third of its value every month. Price controls have led to widespread shortages of food, medicine, and toilet paper — there’s even a Wikipedia page on the subject.
All of this reflects poor governance: the Venezuelan government simply doesn’t work for most of its citizens.