German Hyperinflation Destroys the Papermark
A currency so worthless that workers were paid twice a day so wages could be spent before they melted
Quick facts
- Reparations demanded
- 132 billion gold marks
- Exchange rate, November 1923
- c. 4 trillion marks per US dollar
- Trigger
- Money printing plus the 1923 Ruhr occupation
- Ended by
- Rentenmark, issued November 15, 1923
What happened
After the First World War, the Weimar Republic owed enormous reparations, fixed at 132 billion gold marks, and rather than raise the money through taxes it increasingly paid its bills by printing paper currency. Between December 1921 and July 1922 the Reichsbank's holdings of domestic bills rose more than sixfold, and by May 1922 only about a fifth of government income came from taxes, the rest from freshly printed money. When France and Belgium occupied the industrial Ruhr region in January 1923 over unpaid reparations, the government printed still more to support striking workers, and the currency collapsed. The exchange rate ran from thousands of marks to the dollar to, by November 1923, roughly four trillion marks to the dollar. Prices doubled within hours, workers were paid twice a day so wages could be spent before they lost value, and the crisis ended only with the introduction of a new currency, the Rentenmark, on November 15, 1923.
Why it matters
The 1923 hyperinflation is the archetypal example of what happens when a government funds itself by printing fiat money without limit: savings are wiped out, contracts and prices become meaningless, and public trust in the currency, and often in the government itself, collapses. It impoverished Germany's middle class, and the political instability it left behind is widely seen as helping clear the way for extremist movements, a warning that shaped central-bank thinking for the rest of the 20th century.
How we know
Weimar-era exchange rates, Reichsbank balance sheets, price indices, and wage records survive in detail, and economic historians have used them to reconstruct the month-by-month, and eventually hour-by-hour, collapse of the papermark.
Sources
- American-German Institute. Hyperinflation Weimar · General sourceamericangerman.institute · Cited as a "reference" source (no stronger domain match). · Link is live and its text matches the event's key terms (Jul 2026)
- Econlib (Library of Economics and Liberty). Hyperinflation in Germany, 1921-1923 · General sourceeconlib.org · Cited as a "reference" source (no stronger domain match). · Link is live and its text matches the event's key terms (Jul 2026)
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Related timelines
- The Great Depression → · The instability left by the 1923 hyperinflation fed into the interwar economic crises covered in the Great Depression timeline.