During the hyperinflation in Germany of 1920s, the country’s currency, the mark, went crazy. The government of the Weimar Republic may have been able to clear its debts, but it came at the cost of the citizens’ savings. It’s an era that is still part of the national psyche today.
German hyperinflation after the First World War originated in the decision of July/August 1914 to suspend the gold convertibility of the mark and associated gold-reserve requirements. As with other hyperinflations, this one was irregular.
German wholesale prices slightly more than doubled during the First World War. By February 1920 the ratio to 1913 prices was about 17, but then fell, irregularly, to a ratio of 13 in May 1921. After May 1921 inflation resumed and between then and June 1922 average monthly inflation was 13.5 per cent; in the following 12 months it reached 60 per cent (including a short cessation in early 1923 as the Reichsbank temporarily pegged the exchange rate), and 32,700 per cent or about 20 per cent per day between June and November 1923.
The mark was stabilized in later November 1923 at one million millionth of its 1913 dollar exchange rate. Although only the period from June 1922 was ‘hyperinflationary’ (above 50 per cent per month), this period cannot be studied independently of the preceding inflationary history.
A shop owner advertises “selling and repairing in exchange for food,” one of many Germans turning to a barter economy amid hyperinflation, 1922.
Children play with virtually worthless marks, 1922.
Boys fly a kite made of banknotes, 1922.
A shopkeeper stuffs excess cash into a tea chest next to his register, 1922.
Children use bundles of banknotes as building blocks, 1923.