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A 50,000,000 (50-million) mark banknote from 1923

A 1000 Mark banknote, over-stamped in red with "Eine Milliarde Mark" long scale (1,000,000,000 mark), issued in Germany during the hyperinflation of 1923
The inflation in the Weimar Republic was a period of hyperinflation in Germanymarker (the Weimar Republicmarker) during 1921-1923.

The hyperinflation episode in the Weimar Republicmarker in the 1920s was not the first hyperinflation, nor was it the only one in early 1920s Europe or even the most extreme inflation in history (the Hungarian pengő and Zimbabwean dollar have both been more inflated). However, as the most prominent case following the emergence of economics as a science, it drew interest in a way that previous instances had not. Many of the dramatic and unusual economic behaviors now associated with hyperinflation were first documented systematically in Germany: order-of-magnitude increases in prices and interest rates, redenomination of the currency, consumer flight from cash to hard assets, and the rapid expansion of industries that produced those assets. John Maynard Keynes described the situation in The Economic Consequences of the Peace: "The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance."

Weimar Republic hyperinflation from one to one trillion paper Marks per gold Mark

It is sometimes argued that Germany had to inflate its currency to pay the war reparations required under the Treaty of Versailles, but this is misleading. The German currency was relatively stable at about 60 Marks per US Dollar during the first half of 1921. But the "London ultimatum" in May 1921 demanded reparations in gold or foreign currency to be paid in annual installments of 2,000,000,000 (2 billion) gold marks plus 26 percent of the value of Germany's exports. The first payment was paid when due in August 1921. That was the beginning of an increasingly rapid devaluation of the Mark which fell to less than one third of a cent by November 1921 (approx. 330 Marks per US Dollar). The total reparations demanded was 132,000,000,000 (132 billion) gold marks which was far more than the total German gold or foreign exchange. An attempt was made by Germany to buy foreign exchange with Marks backed by treasury bills and commercial debts, but that only increased the speed of devaluation.

A medal commemorating Germany's 1923 hyperinflation.
The engraving reads: "On 1st November 1923 1 pound of bread cost 3 billion, 1 pound of meat: 36 billion, 1 glass of beer: 4 billion."
During the first half of 1922 the mark stabilized at about 320 Marks per Dollar accompanied by international reparations conferences including one in June 1922 organized by U.S. investment banker J. P. Morgan, Jr. When these meetings produced no workable solution, the inflation changed to hyperinflation and the Mark fell to 8000 Marks per Dollar by December 1922. The cost of living index was 41 in June 1922 and 685 in December, an increase of more than 16 times. In January 1923 French and Belgian troops occupied the industrial region of Germany in the Ruhr valley to ensure that the reparations were paid in goods, such as coal from the Ruhr and other industrial zones of Germany, because the Mark was practically worthless. Although reparations accounted for about one third of the German deficit from 1920 to 1923, the government found reparations a convenient scapegoat. Other scapegoats included bankers and speculators (particularly foreign). The inflation reached its peak by November 1923, but ended when a new currency (the Rentenmark) was introduced. The government stated that this new currency had a fixed value, secured by real estate, and this was accepted.

Although the inflation ended with the introduction of the Rentenmark and the Weimar Republic continued for a decade afterwards, hyperinflation is widely believed to have contributed to the Nazi takeover of Germany. Adolf Hitler himself in his book, Mein Kampf, makes many references to the German debt and the negative consequences that brought about the inevitability of National Socialism. The inflation also raised doubts about the competence of liberal institutions, especially amongst a middle class who had held cash savings and bonds. It also produced resentment of Germany's bankers and speculators, many of them Jewish, whom the government and press blamed for the inflation.


  1. Laursen and Pedersen, page 134
  2. The Great Inflation, William Guttmann, Gordon & Cremonesi, London, 1975, pages 21-26.
  3. Balderston, page 21
  4. Costantino Bresciani-Turroni, page 93
  5. Mein Kampf ("My Struggle"), Adolph Hitler (originally 1925-1926), Reissue edition (September 15, 1998), Publisher: Mariner Books, Language: English, paperback, 720 pages, ISBN 0-395-92503-7
  • Bernd Widdig, Culture and Inflation in Weimar Germany, University of California Press, 2001, ISBN 0520222903
  • Gerald D. Feldman, The Great Disorder, Oxford University Press, 1997, ISBN 0195101146
  • Theo Balderston, Economics and Politics in the Weimar Republic, (chapter 3 covers 1918-1923), Cambridge University Press, 2002, ISBN 0521777607
  • Costantino Bresciani-Turroni, The Economics of Inflation (English transl.), Northampton, England: Augustus Kelly Publishers, 1937, on the German 1919-1923 inflation.
  • Karsten Laursen and Jorgen Pedersen, The German Inflation, North-Holland Publishing Co., Amsterdam, 1964.
  • Max Shapiro, The Penniless Billionaires, pages 170-224, New York Times Books, 1980, ISBN 0-8129-0923-2
  • When Money Dies: The Nightmare of the Weimar Collapse, by Adam Fergusson
  • When Money Buys Little - Jerry Jensen Study of the 1923 German postage stamps

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