A Template for Understanding Big Debt Crises

by Ray Dalio

From July 1922 until November 1923 the mark depreciated by 99.99999997 percent versus the dollar (i.e., the cost of dollars increased 1570 billion percent) and prices rose by 387 billion percent! For some perspective on what these numbers mean, in 1913 a total of six billion marks circulated as currency and coin in the whole German economy. By late October 1923, the entire stock of money in 1913 would just about get you a one kilo-loaf of rye bread.111 Living through such chaos was immensely painful and traumatizing for German citizens—and experiences of the inflation would later serve to validate many of the criticisms made by Nazi politicians of the “disastrous” Weimar era.