German hyperinflation between 1921 and 1923 destroyed savings, destabilized the Weimar Republic, and required emergency currency reform to restore economic order.
Key Facts
- War debt by 1918
- 156 billion marks
- Reparations added
- 50 billion marks
- Exchange rate mid-1922
- 320 marks per US dollar
- Exchange rate Dec 1922
- 7,400 marks per US dollar
- Exchange rate Nov 1923
- 4,210,500,000,000 marks per US dollar
- Stabilisation mechanism
- Rentenmark backed by mortgage bonds
By the Numbers
Location
Cause → Event → Consequence
Germany financed its World War I effort through borrowing, accumulating 156 billion marks in debt by 1918. Post-war reparations obligations under the 1921 London Schedule of Payments added 50 billion marks. From August 1921, the German central bank began exchanging paper currency for hard cash at any price, sharply accelerating monetary expansion and eroding the mark's value.
Between 1921 and 1923, Germany experienced catastrophic hyperinflation affecting the Papiermark. The currency stabilised briefly in early 1922 before collapsing; by November 1923, one US dollar was equivalent to over four trillion marks. The episode caused severe internal political instability and wiped out the savings and debts of millions of Germans.
German authorities introduced the Rentenmark, backed by mortgage bonds, and blocked the national bank from printing further paper currency, stabilising the economy by 1924. Reparations resumed under the Dawes Plan. Some debts, such as mortgages, were revalued to compensate lenders whose claims had been erased by the collapse, and the Rentenmark was later replaced by the Reichsmark.