But like all unsustainable things, hyperinflation eventually comes to an end. What makes that happen? Well, in cases where the government doesn’t belatedly do so itself, there are two things that can force its hand. The first is what Hanke called the “physical constraint on redenomination,” which is just another way of saying that it can’t print money fast enough. That might sound like something out of “The Onion” — Area Central Banker Ends Hyperinflation by Trying to Print More Money — but it’s a pretty good description of what happened in Yugoslavia in the 1990s. Back then, Serb strongman Slobodan Milosevic had tried to pay for all his wars by setting off what is still the third-worst hyperinflation in history, until his mint simply hit full capacity. So he had no choice but to stop. This is obviously an extreme example, but a similar situation is already underway in Venezuela. The difference is that it doesn’t print its money itself but, rather, imports it from a specialized dealer — when, that is, it can afford to. It’s having trouble doing that, though. Venezuela, in other words, barely has enough dollars that are worth something to create bolivars that aren’t.
The second way a hyperinflation stops is when people stop accepting the currency en masse. This isn’t coordinated in any way but is just a matter of people quite reasonably not wanting to hold their money in a currency that is appreciably dwindling in value on a monthly, weekly or even daily basis. It’s what’s known as spontaneous dollarization, because that’s what everyone starts doing business in instead, and it’s what brought Zimbabwe’s hyperinflation, the second worst on record, to an abrupt halt nearly a decade ago.