A German mint hard at work producing debased coinage designed to be palmed off on the nearest neighbouring state, c.1620

The great German hyperinflation of 1923 is passing out of living memory now, but that doesn’t mean that it has been forgotten. Indeed, you don’t have to go too far to hear it cited as a terrible example of what can happen when a government lets the economy spin out of control, and the episode still remains a minor feature of the British history curriculum, studied – briefly – by 15 and 16 year olds taking their GCSE. In consequence, a surprisingly large number of Brits can recall at least some of the details of that period. They may remember, for instance, that at its peak German inflation hit 325,000,000 percent, while the exchange rate plummeted from 9 marks to 4.2 billion marks to the dollar. They may recall that it became cheaper to decorate a room with high-denomination banknotes than with wallpaper; or that when thieves robbed a worker who had used a wheelbarrow to cart off the billions of reichsmarks that were his week’s wages, it was reported that they stole the wheelbarrow but left the useless wads of cash piled on the kerb. Others have had one or other of the famous photos taken in this period burned into their memories, such as one that shows a German housewife firing her boiler with an imposing pile of worthless notes [below left].

It’s easy, in these circumstances, to suppose that 1923 was a uniquely strange and terrible episode, but the truth is that it was not. Indeed, the German hyperinflation was not even the worst of the twentieth century; its Hungarian equivalent, dating to 1945-46, was so much more severe that prices in Budapest began to double every 15 hours. (At the peak of this crisis, the Hungarian government was forced to announce the latest inflation rate via radio each morning, so workers could negotiate a new pay scale with their bosses, and issue the largest denomination banknote ever to be legal tender: the 100 quintillion (10²⁰⁾ pengo note. When the debased currency was finally withdrawn, the total value of all the cash then in circulation in the country was reckoned at 1/10th of a cent. [Bomberger & Makinen pp.801-24; Judt p.87])   Nor was 1923 even the first time that Germany had experienced an uncontrollable rise in prices. It had also happened long before, back in the early years of the 17th century. And that hyperinflation (which is generally known by its evocative German name, the kipper- und wipperzeit) was a whole lot stranger and more colourful than what happened in 1923. More