Commanding Heights: The German Hyperinflation, 1923- PBS.org

Permanent Article Link Here:
http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhyperinflation.html

Annotations:

This article looks back at the epidemic of hyperinflation and its impacts on Germany in the early twentieth century.  After World War I, Germany had been defeated, and as a result, its country's economy was left in shambles.  The value of the German mark, as it does in other places victimized by hyperinflation, had dropped to next to nothing.  To put this into perspective, before this situation, the German, French, and British monetary units all had a similar exchange rate, which was at about four or five units to one U.S. dollar.  After the war, one U.S. dollar was approximately equivalent to one trillion German marks.  As stated in the article, a wheelbarrow full of money could not even buy a newspaper, let alone any vital goods needed in everyday life.  Eventually, the onset of this serious situation, along with an unstable government, and a defeated country as a whole, would become one of the factors that resulted in Hitler's rise to power, and the rest is history.

While this was one of the more dramatic examples of hyperinflation throughout history, it remains one of the best examples of the topic.  When a country faces these severe situations, there must be quick reactions by the central government to help lessen the damages.  Unfortunately, in most cases, a failing government is one of the leading causes of hyperinflation, which would render the struggling country useless to help itself out of such a severe recession.  This example should be taken very seriously, and should be a model for future struggles which can hopefully be avoided.