Chapter 22 - A Lesson From the German Hyperinflation

This first graph shows a massive fall in government tax collection in Germany between 1921 and 1923.

Tax revenue and government expenditure in Germany from 1919 to 1923 - Andy Chalkley. www.andychalkley.com.au

This next graph shows the same data as well as government expenditure. It is displayed in a different manner to show the large disparity between government revenue and government expenditure in Germany between 1919 and 1923.

Tax revenue and government expenditure in Germany from 1919 to 1923 - Andy Chalkley. www.andychalkley.com.au

I combine these in a different manner and show you also the deficit:

Tax revenue, government expenditure and deficit in Germany from 1919 to 1923 - Andy Chalkley. www.andychalkley.com.au

This is a nice little table that shows the gold to mark relationship:

YearMonthDayGerman Marks needed to buy one ounce of gold
1919Jan170
1919Sept499
1920Jan1 340
1920Sept1 201
1921Jan1 349
1921Sept2 175
1922Jan3 976
1922Sept30 381
1923Jan372 477
1923Sept269 439 000
1923Oct26 631 749 000
1923Oct924 868 950 000
1923Oct1684 969 072 000
1923Oct231 160 552 882 000
1923Oct301 347 070 000 000
1923Nov58 700 000 000 000
1923Nov3087 000 000 000 000

This is the same in graphical format:

German Marks needed to buy one ounce of gold from 1919 to 1923 - Andy Chalkley. www.andychalkley.com.au

Here is a graph of unknown original source, purporting to show an estimated velocity during the Weimar hyperinflation. I show you the graph because it demonstrates the ‘flight from money’ in November 1923:

A graph of estimated velocity during the Weimar Hyperinflation showing the flight from money in November 1923. Origin unknown. Accuracy unknown. Original source unknown. Adapted from a graph on www.nowandfutures.com by Andy Chalkley