Post-WWI·Germany·1921–1923

Weimar Republic Hyperinflation

The most studied hyperinflation in history. Post-war reparations, political instability, and unrestricted money printing destroyed the German mark in under three years. The middle class was wiped out. Savings became worthless overnight.

Currency

Papiermark

Peak Inflation

29,500% per month (October 1923)

Pre-Conditions

•Germany financed WWI largely through borrowing rather than taxation, leaving massive war debts.
•The Treaty of Versailles (1919) imposed 132 billion gold marks in reparations — an amount many economists considered unpayable.
•The new Weimar Republic faced political instability from both left and right extremists.
•Industrial capacity in the Ruhr region was constrained by Allied occupation.
•The Reichsbank (central bank) was under political pressure to finance government deficits.

Trigger Events

•Germany defaulted on reparation payments in late 1922.
•France and Belgium occupied the Ruhr industrial region in January 1923.
•The German government encouraged workers to engage in passive resistance — and paid them by printing money.
•Tax revenue collapsed as the currency lost value faster than taxes could be collected.
•A self-reinforcing cycle: printing caused devaluation, which required more printing.