Hyperinflation in Germany (jan 1, 1921 – jan 1, 1923)

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Hyperinflation impacted the German Papiermark, the currency of the Weimar Republic, between 1921 and 1923, primarily in 1923. The German currency had experienced significant inflation during the First World War due to the government's borrowing and increased national debt by 50 billion marks of reparations payable in cash and in-kind. This continued into the post-war period, with the German central bank buying hard cash with paper currency at any price, claiming to pay reparations in hard cash. The currency stabilized in early 1922, but hyperinflation took off, with the exchange value of the mark falling from 320 marks per dollar in mid-1922 to 7,400 marks per US dollar by December 1922. This continued into 1923, with one US dollar worth 4,210,500,000,000 marks. German authorities introduced measures such as the Rentenmark, later replaced by the Reichsmark, and blocked the national bank from printing further paper currency. By 1924, the currency stabilized and German reparations payments began again under the Dawes Plan. The catastrophic fall in the mark effectively wiped out debts owed, and some debts were revalued to recoup some money. Hyperinflation caused significant internal political instability in the country.

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