Hyperinflation of 1923
The hyperinflation of 1923 is the most traumatic financial event in German history. Within a few months, the mark became completely worthless.
The figures are unimaginable:
• January 1923: a loaf of bread costs 250 marks
• September 1923: 1.5 million marks
• November 1923: 105 billion marks
• Prices doubled every 3–4 days
What happened: after the First World War, Germany had to make massive reparation payments. The government printed more and more money – leading to a spiral of currency devaluation. People carried money around in wheelbarrows. Wages were paid out twice a day because the money lost value by the evening.
Why it still matters today: this experience still shapes the German mentality. The fear of inflation explains why Germans are so thrifty, why the Bundesbank was so independent and why many Germans prefer cash.
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