Hyperinflation - when banknotes lose their value

The 100 trillion Zimbabwean dollar banknote (10¹⁴ dollars), the largest
 banknote ever in terms of the number of zero's on it

   In economics, hyperinflation is inflation that is very high or "out of control", a condition in which prices increase rapidly as a currency loses its value. Definitions used by the media vary from a cumulative inflation rate over three years approaching 100% to "inflation exceeding 50% a month. As a rule of thumb, normal inflation is reported per year, but hyperinflation is often reported for much shorter intervals, often per month. Although there is a great deal of debate about the root causes of hyperinflation, it becomes visible when there is an unchecked increase in the money supply (or drastic debasement of coinage) usually accompanied by a widespread unwillingness to hold the money for more than the time needed to trade it for something tangible to avoid further loss. Hyperinflation is often associated with wars (or their aftermath), economic depressions, and political or social upheavals.

   

Sweeping up the banknotes from the street after
the Hungarian pengő was replaced in 1946 after
 the biggest inflation the world had ever faced

Germany, 1923: banknotes had lost so much
 value that they were used as wallpaper.

   
   Hyperinflation is generally associated with paper money because this can easily be used to increase the money supply: add more zeros to the plates and print, or even stamp old notes with new numbers.Historically there have been numerous episodes of hyperinflation in various countries, followed by a return to "hard money". Older economies would revert to hard currency and barter when the circulating medium became excessively devalued, generally following a "run" on the store of value.Hyperinflation effectively wipes out the purchasing power of private and public savings, distorts the economy in favor of extreme consumption and hoarding of real assets, causes the monetary base, whether specie or hard currency, to flee the country, and makes the afflicted area anathema to investment.

    The worst inflation occurred in Hungary  between the end of 1945 and July 1946. In 1944, the highest denomination was 1,000 pengő.  A special currency the adópengő - or tax pengő - was created for tax and postal payments & later by Forint. The value of the adópengő was adjusted each day, by radio announcement. On 1 January 1946 one adópengő equaled one pengő. On 18 August 1946, one forint equaled 400 octillion or 400,000,000,000,000,000,000,000,000,000 pengő.

   

The 100 million b.-pengő note was the highest denominated banknote ever 
issued, equaling 100 quintillion  (10²⁰⁾  Hungarian pengő 

   The largest denomination banknote ever officially issued for circulation was in 1946 by the Hungarian National Bank for the amount of 100 quintillion pengő (100,000,000,000,000,000,000, or 10²⁰; 100 trillion on the long scale).  The banknotes however did not depict the numbers, "hundred million b.-pengő" ("hundred million billion pengő") and "one milliard b.-pengő" were spelled out instead. This makes the 100,000,000,000,000 Zimbabwean dollar banknotes the notes with the greatest number of zeros shown.

A German lady burning worthless notes

German kids playing with banknotes

References & more reading
1.Wikipedia, the free encyclopedia
2.http://moneytipcentral.com/inflation-in-america-what-will-hyperinflation-look-like