Economics becomes a science · 1770s–1920s
1923
Hyperinflation in Weimar Germany
Prices double every few days, and a dollar costs 4.2 trillion marks.
After World War I, Germany's government covered its spending and war reparations by printing money. Prices rose faster and faster; by October 1923 they doubled about every four days, and by November a US dollar cost 4.2 trillion marks.
Workers were paid twice a day and spent their wages at once, and savers lost everything they held in marks. A new currency, the Rentenmark, ended the hyperinflation in November 1923.
💡 Why it made sense then
Printing money looked easier than raising taxes or cutting spending, until confidence in the mark collapsed and printing could no longer keep up.
🎮 In Journey Shares
Once a week the city shop has its own hyperinflation: prices double every hour for eight hours.
Ideas it gave us
- 🌍 Hyperinflation
Hyperinflation is extremely fast inflation, usually defined as prices rising more than 50% in a month. Money loses its value so quickly that people rush to spend it, which pushes prices up even faster.
- 🌍 Money supply
The money supply is the total amount of money in an economy. M1 counts cash and checking deposits; M2 adds savings and other near-money.
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