There is no universally accepted threshold; accounting standards use an accumulated price growth of approximately one hundred percent over three years as a reference point, while economic literature applies much sharper monthly growth criteria.
The mechanics are destructive because they are self-reinforcing. Anticipating further price increases, people rush to get rid of money immediately, circulation velocity rises, which further accelerates prices. Savings in national currency depreciate, lending ceases, and the economy shifts to foreign currency transactions or barter.
For investors, the term's significance is mainly comparative: it helps distinguish ordinary inflation, which is managed through instrument selection, from a situation where all nominal instruments stop working simultaneously. Moderate inflation reduces real deposit returns but does not eliminate the rationale for saving in national currency—it is important only to compare the interest rate with actual price growth.