There was a really interesting Planet Money episode from NPR about how introducing a new currency saved Brazil from hyperinflation. I'd highly recommend it: ht

There was a really interesting Planet Money episode from NPR about how introducing a new currency saved Brazil from hyperinflation. I'd highly recommend it: http://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved-brazil http://www.npr.org/sections/money/2010/10/04/130329523/how-f... (podcast and article but I'd recommend the podcast) They invented a new "virtual currency", stabilized it, denominated goods and services in the virtual currency, built public trust in the conversion rate between the (stable) virtual currency and (unstable, still experiencing hyperinflation) regular currency, and then finally switched the country over to the new currency. > Four economists wanted to create a new currency that was stable, dependable and trustworthy. The only catch: This currency would not be real. No coins, no bills. It was fake. "We called it a Unit of Real Value — URV," Bacha says. "It was virtual; it didn't exist in fact." > People would still have and use the existing currency, the cruzeiro. But everything would be listed in URVs, the fake currency. Their wages would be listed in URVs. Taxes were in URVs. All prices were listed in URVs. And URVs were kept stable — what changed was how many cruzeiros each URV was worth. This was not the only fix, though, as I understand it. The government also had to change its policies that were causing hyperinflation in the first place. However, inflation was continuing more than it should have because the public had lost trust in the currency and assumed it would debase in value every day. The finance ministry needed to regain trust, and the new currency and currency swap allowed them to do that.