Cranking Up the Printing Press
Hyperinflation occurs when a government in crisis tries to make ends meet by issuing fiat currency -- in essence, printing more money. Fiat currency isn't tied to a measure of value. Its falling worth soon becomes obvious, and the result is an economic nightmare. Tax revenues drop drastically. The government then struggles to provide public services, from maintaining airports to putting boots on its soldiers' feet. For example, during Bolivia's bout of hyperinflation in the 1980s, its tax revenues went from 9 percent of gross national product in 1981 to less than 1.5 percent in 1985.