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Weimar Hyperinflation




It is a truism that "hyperflation in Germany paved the way for Hitler's takeover." Everybody knows this ... right? Everybody has seen the photos of the wheelbarrows -- filling one wheelbarrow with marks was enough to get the bearer of the barrow a loaf of bread.


Like much that everybody knows, this isn't quite ... accurate. There is some truth to it, but ...


The worst of the hyperinflation in Weimar Germany was over long before Hitler became Chancellor in 1933.


It was in the early 20s that those famous wheelbarrows were rolling about with those bills. Late in '23, after a new currency was introduced [one Rentenmark, as above, was pegged to each one TRILLION of the cheapened Reichsmarks] the govt wisely pegged the new Rentenmarks to the US dollar at a ratio of 4.2:1. A peg to the U.S. dollar was, indirectly, a peg to gold.


Then the currency situation gradually normalized. This is worth noting because there was no very direct relationship between the hyperinflation on the one hand and Hitler's acquisition of power almost a full decade later. The latter isn't irrelevant to the former, but the connection isn't as direct as people often assume, either.


The introduction of the Rentenmark roughly corresponds to Hitler's first grab at power, the Beer Hall Putsch, in November '23. That, in turn, made Hitler a celebrity in disaffected circles, and his celebrity status (while inside and then just months later back outside of prison) continued even when the hyperinflation was becoming a bad memory.


Still, a lot of other pieces had to fall into place before the two parliamentary elections of 1932 and Hitler's appointment as Chancellor in January of the following year. and laying too much blame on the monetary crisis of 1922-23 just obscures all those other pieces.
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