As an economist, I'll try to take your question in a couple different ways.

1) Literally, for a currency's value to be utterly destroyed, the inflation you're referring to is more commonly called "hyperinflation" where, as a previous user has stated, is from the press literally pumping out extreme amounts of cash. This has recently happened to the African country Zimbabwe; their government ordered TONS of Zimbabwean dollars were printed, causing their inflation of the Zimbabwean dollar to rise to 1,500,000 percent. Their economy isnt "destroyed" because you cant ever "destroy" an economy, but for all practical purposes, their money is worthless and Zimbabweans store value in things with higher intrinsic value, like steel, gold, etc. Their paper money is worth about as much as any other paper: Good for burning and writing grocery lists. Yet they still can barter a goat leg for a bushel of corn, so there is a hint of an economy there. As long as there are people doing something, there will be an economy, no matter how worthless the currency.

2) I dont know if you're referring to the United States' economy, and if you wanted to know whats causing our relatively moderate inflation rates. Inflation is the overall rise in price level: Not only prices of goods we buy, but worker wages, services, and the list goes on. A major cause is rise in GDP. An increase in GDP is usually pointed to as a *good* thing, but a byproduct is inflation.

Also, the Federal Reserve has many tools to gauge inflation, between the discount rate, interest rates, etc. that affect inflation as well.

We should always keep in mind that a little bit of inflation is the best for an economy. Deflation is generally viewed as much worse. The consensus is that consumers are unwilling to buy a car, for example, if they know that today the car is selling for $20,000 and in 6 months the same car will be selling for $18,500 due to deflation. This causes consumer spending to plummet and causes problems.

Hopefully this answers it.

Best Regards,

Trevor