Sunday, December 28, 2014

This is What Hyperinflation Looks Like

Economist magazine writes:
The German public, it seems, is particularly fearful of letting inflation getting out of control. This is, in part, due to the legacy of the German hyperinflation of 1922-3. The mark-dollar exchange rate rose from 4.2 to one in 1914 to a peak of around 4.2 trillion marks to the dollar by November 1923. At its height, prices were rising so fast that waiters had to climb on tables to call out new menu prices in restaurants every half hour. Banknotes became sufficiently useless that workers had to bring wheelbarrows with them to work to collect their daily pay, and bundles were given to children to play with, being cheaper than actual toys...The hyperinflation of 1923 created winners and losers among the middle classes (those with mortgages or debts found some relief while those with savings lost them).

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