Wikipedea explains the models of hyperinflation:

(emphasis mine)

Models of hyperinflation

Since hyperinflation is visible as a monetary effect, models of hyperinflation center on the demand for money. Economists see both a rapid increase in the money supply and an increase in the velocity of money if the (monetary) inflating is not stopped. Either one, or both of these together are the root causes of inflation and hyperinflation. A dramatic increase in the velocity of money as the cause of hyperinflation is central to the "crisis of confidence" model of hyperinflation, where the risk premium that sellers demand for the paper currency over the nominal value grows rapidly. The second theory is that there is first a radical increase in the amount of circulating medium, which can be called the "monetary model" of hyperinflation. In either model, the second effect then follows from the first - either too little confidence forcing an increase in the money supply, or too much money destroying confidence.

In the confidence model, some event, or series of events, such as defeats in battle, or a run on stocks of the specie which back a currency, removes the belief that the authority issuing the money will remain solvent - whether a bank or a government. Because people do not want to hold notes which may become valueless, they want to spend them in preference to holding notes which will lose value. Sellers, realizing that there is a higher risk for the currency, demand a greater and greater premium over the original value. Under this model, the method of ending hyperinflation is to change the backing of the currency - often by issuing a completely new one. War is one commonly cited cause of crisis of confidence, particularly losing in a war, as occurred during Napoleonic Vienna, and capital flight, sometimes because of "contagion" is another. In this view, the increase in the circulating medium is the result of the government attempting to buy time without coming to terms with the root cause of the lack of confidence itself.

In the monetary model, hyperinflation is a positive feedback cycle of rapid monetary expansion. It has the same cause as all other inflation: money-issuing bodies, central or otherwise, produce currency to pay spiralling costs, often from lax fiscal policy, or the mounting costs of warfare. When businesspeople perceive that the issuer is committed to a policy of rapid currency expansion, they mark up prices to cover the expected decay in the currency's value. The issuer must then accelerate its expansion to cover these prices, which pushes the currency value down even faster than before. According to this model the issuer cannot "win" and the only solution is to abruptly stop expanding the currency. Unfortunately, the end of expansion can cause a severe financial shock to those using the currency as expectations are suddenly adjusted. This policy, combined with reductions of pensions, wages, and government outlays, formed part of the Washington consensus of the 1990s.

Whatever the cause, hyperinflation involves both the supply and velocity of money. Which comes first is a matter of debate, and there may be no universal story that applies to all cases. But once the hyperinflation is established, the pattern of increasing the money stock, by whichever agencies are allowed to do so, is universal. Because this practice increases the supply of currency without any matching increase in demand for it, the price of the currency, that is the exchange rate, naturally falls relative to other currencies. Inflation becomes hyperinflation when the increase in money supply turns specific areas of pricing power into a general frenzy of spending quickly before money becomes worthless. The purchasing power of the currency drops so rapidly that holding cash for even a day is an unacceptable loss of purchasing power. As a result, no one holds currency, which increases the velocity of money, and worsens the crisis.

That is, rapidly rising prices undermine money's role as a store of value, so that people try to spend it on real goods or services as quickly as possible. Thus, the monetary model predicts that the velocity of money will rise endogenously as a result of the excessive increase in the money supply. At the point when ordinary purchases are affected by inflation pressures, hyperinflation is out of control, in the sense that ordinary policy mechanisms, such as increasing reserve requirements, raising interest rates or cutting government spending will all be responded to by shifting away from the rapidly dwindling currency and towards other means of exchange.

During a period of hyperinflation, bank runs, loans for 24 hour periods, switching to alternate currencies, the return to use of gold or silver or even barter become common. Many of the people who hoard gold today expect hyperinflation, and are hedging against it by holding specie. There may also be extensive capital flight or flight to a "hard" currency such as the U.S. dollar. This is sometimes met with capital controls, an idea which has swung from standard, to anathema, and back into semi-respectability. All of this constitutes an economy which is operating in an "abnormal" way, which may lead to decreases in real production. If so, that intensifies the hyperinflation, since it means that the amount of goods in "too much money chasing too few goods" formulation is also reduced. This is also part of the vicious circle of hyperinflation.

My reaction: As I wrote in How Deflation creates Hyperinflation, I expect a loss of crisis of confidence to cause hyperinflation, as per the confidence model explained above.

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Since there has been some confusion about what the velocity of money is and how it affects prices, I will try to explain it again.

The formulas for inflation

1) For any given time period, prices are determined by amount of money being spend divided by the quantity of the goods being sold. In formula form, this gives us:

Prices ($) = money being spent ($) / goods being sold

2) Also, for any given time period, the amount of money being spent can be expressed as a percent of the total money. This percentage is the velocity of money. In formula form, this gives us:

money being spent ($) = money supply ($) * velocity of money (%)

3) Combined these two formulas give us:

Prices ($) = money supply ($) * velocity of money (%) / goods being sold

The velocity of money in deflationary and hyperinflationary periods

During periods of deflation, money is valuable and hoarded. People put it under the mattress (or in short term treasuries) and don't touch it. Because of all the cash removed from circulation, the amount of money spent on any given day is tiny compared to the overall money supply.

During periods of hyperinflation, money's purchasing power is drops rapidly, and holding cash for any period of time becomes an unacceptable loss of purchasing power. Under this dynamic, all money is in circulation at all times, and currency holders spend it as fast as possible. Because all money is in circulation being exchanged at the fastest rate possible, the amount of money spent on any given day is huge compared to the overall money supply.

How a crisis in confidence produces hyperinflation

A crisis of confidence causes a flight away from a currency and drastically increases the velocity of money as a result. The slower money is moving through the economy before the lost of confidence, the more potential there is for an explosion in prises.

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I hope that helps people understand the velocity of money and how it effects prices. If someone wants to send a better explanation or a link to a better explanation, I would be happy to post it to this blog. Finally, I will write a detailed article later tonight on why a loss of confidence in the US is imminent, if not already underway.