Tuesday, April 30, 2013
When Money Dies (“Quantitative Easing”)
Children play with German currency in 1923.
At the time, building blocks for children were far more precious than paper money.
At the peak of Weimar’s hyperinflation crisis, prices doubled every 48 hours, forcing the introduction of the 50-million-mark note. It became more economical for Germans to heat their homes with currency rather than firewood.
At year-end 1923, one U.S. dollar bought 4.2 trillion German marks. American students studying in Germany were able to buy entire blocks of city real estate with their monthly allowances from home—and did so (until the German government put a stop to such transactions).
In October 1923, it was noted by the British Embassy in Berlin that the number of marks to the pound equaled the number of yards from the earth to the sun.
Dr. Schacht, Germany's National Currency Commissioner, explained that at the end of The Great War one could in theory have bought 500,000,000,000 eggs for the same price as that for which, five years later, only a single egg could be procured.