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A Tale From Weimar Germany: Gold went from 170 marks per ounce in 1919 to 87 trillion marks per ounce five years later
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Posted by ian 1 year 131 days ago (24hgold.com). Views: 418
Tags: gold inflation hyperinflation history |
| Related Tags: finance investing commodities housing bubble peter schiff economics |
A Tale From Weimar Germany:
Most readers will be familiar with the great hyperinflation of Weimar Germany. Indeed, it is often held up as the icon of what can go drastically wrong when government throws off all restraint as regards to the production of fiat money. I do not need to labour the point much as to how billions and then trillions of marks were literally not worth the paper they were printed on and how workers had to be paid by the hour lest their wages rapidly lost purchasing power in the brief time between being paid and spending that same money.
As ever, gold and silver proved to be safe havens from the ravages of inflation. Indeed, anything other than the mark seemed to a good place to park one’s wealth. In those days, that could be anything from bedpans to US dollars to precious metals. However, depending on one’s accumulated wealth, gold and silver were amongst the top assets in terms of holding and transporting wealth. Despite this, one set of figures and one notable week in the life of Weimar Germany demonstrated that one particular form of wealth proved to be in particularly heavy demand.
Thanks to an article by Rob Kirby that listed the increasing value of gold and silver in terms of German marks, I was able to plot a couple of graphs. The chart of the price of silver and gold over the period from January 1919 to November 1923 shows the rapidly deteriorating value of the Mark. For those having trouble counting the zeroes, gold went from 170 marks per ounce in 1919 to 87 trillion marks per ounce about five years later.
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