Hyperinflation

Horror Stories of Hyperinflation: Germany in 1920s

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• published: 16 Aug 2013
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Are you complaining about the prices constantly going up? Then you might want to watch this video about one of the most unbelievable cases of hyperinflation in history. That is hyperinflation in Germany in 1920s, where at some point, prices doubled almost every 4 days! Hyperinflation occurs when the inflation rate increases very rapidly, resulting in prices going up very fast and the currency losing its value quickly. One of the most amazing hyperinflation cases in history happened in Germany in 1920s. As the result of World War I, the German Papiermark started to lose its value, and this process accelerated in 1920s. In 1923, prices eventually ran out of control. The prices went up so much that people were forced to spends billions of marks for daily items and were dizzied by the amount of zeros involved. As an example, a loaf of bread, which cost 250 marks in January 1923 rose to 200,000 million marks in November 1923. Or a newspaper that was sold for 1 Mark in May 1922, had a price tag of 70 million marks in November 1923. It was cheaper to use the back of the 1Million mark to write notes as a notepad would cost billions of Marks. Some had to use wheelbarrows filled with cash to get a cup of coffee. At restaurants, customers had to negotiate the price of the food in advance, as there was a good chance that the price could change before the meal was served. Most restaurants did not print menus as by the time the food would arrive, the price had already gone up! At some point, the situation got so bad that the prices were doubling almost every 4 days. There is evidence that it was cheaper to burn Marks instead of wood or coal. Some used Marks instead of wallpaper to decorate their walls. Children also used bundles of Marks instead of toy bricks! Workers also had to negotiate their wages almost on a daily basis. Some had to use scale to count the weight of their money to get its value, as it was difficult to count all the bills. Workers were paid twice a day, so that they could spend the money quickly before it lost its value. Many collected their wages in suitcases! One person, who left his suitcase unattended, found that a thief had stolen the suitcase but not the money! After collecting their wages, workers would quickly rush to either buy daily goods or pass the money to their family so that they would spend it before its value had gone. The German government eventually managed to stabilize the situation by taking a number of initiatives including cutting 12 zeros from the papiermark and replacing it with a new currency called rettenmark. However, the economic pressure on Germans eventually contributed to the rise of the Nazi party that used Germany's dire economic situation to attract Public's support and eventually gain power. Image sources: http://i.imgur.com/OqqdQ.jpg http://commons.wikimedia.org/wiki/File:100-Billionen-Geldschein.jpg http://en.wikipedia.org/wiki/File:Bundesarchiv_Bild_102-00104,_Inflation,_Tapezieren_mit_Geldscheinen.jpg http://en.wikipedia.org/wiki/File:GermanyHyperChart.jpg http://en.wikipedia.org/wiki/File:Billionmarks.jpg http://en.wikipedia.org/wiki/File:Bundesarchiv_Bild_102-13378,_Braunschweig,_Hitler_bei_Marsch_der_SA.jpg http://commons.wikimedia.org/wiki/File:Germaninflation.jpg http://commons.wikimedia.org/wiki/File:Bundesarchiv_Bild_146-1971-090-14,_Notzeit_der_20er_Jahre.jpg http://commons.wikimedia.org/wiki/File:Bundesarchiv_Bild_146-1971-109-42,_Inflation,_Schlange_vor_Lebensmittelgesch%C3%A4ft,_Berlin.jpg http://bit.ly/14Nhnae http://facefwd.com/politics/double-dip-shaped-recession-horizon/ http://commons.wikimedia.org/wiki/File:100-Billionen-Geldschein.jpg http://commons.wikimedia.org/wiki/File:Bundesarchiv_Bild_102-00131,_Berlin,_Reichsbank,_Geldtransport_mit_Taschen.jpg http://commons.wikimedia.org/wiki/File:Bundesarchiv_Bild_102-00134,_Berliner_Tageszeitung_zur_Geldentwertung.jpg http://bit.ly/14NisyM http://bit.ly/19uBG0I http://www.historyatfreeston.co.uk/fbechistorysite/Exam%20Papers/GCSEPaper2-2007.htm http://origins.osu.edu/article/49/images/ http://home.wlu.edu/~patchw/his_312/images/1925_Weimar.htm#slide0036.htm http://bit.ly/14eDfrz http://en.wikipedia.org/wiki/File:German_infantry_1914_HD-SN-99-02296.JPEG http://en.wikipedia.org/wiki/File:K%C3%A4mpfe_auf_dem_Doberdo.JPG http://www.flickr.com/photos/jeffreyww/5233003410/ http://tenantrepresentative.files.wordpress.com/2013/06/inflation.jpeg Music: "Snow Queen" by Kevin MacLeod (http://incompetech.com/) We are using the music under the Creative Commons License. Sources: http://www.usagold.com/germannightmare.html?alt http://www.businessinsider.com/9-hyperinflation-horror-stories-2012-9?op=1 http://www.bbc.co.uk/schools/gcsebitesize/history/mwh/germany/crisis1923rev_print.shtml http://www.historylearningsite.co.uk/hyperinflation_weimar_germany.htm http://www.economist.com/node/347363 The Encyclopedia of Money By Larry Allen