he death of a currency is often a protracted affair. It often takes decades. And as it unfolds, the people who experience it hardly believe it.
That is the tale told by Adam Fergusson in his book When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany. First published in 1975, it had been out-of-print for years and much sought after. A used copy on Amazon cost $300 recently.
The book is a history of the death of the German mark in the 1920s. It is also a scary reminder of the devastating effects of inflation and, therefore, a cautionary tale for US central bankers and politicians who play so fast and loose with US Dollar.
If you don’t know what happened to the German mark, here’s what you need to know from When Money Dies: “In 1913, the German mark, the British shilling, the French franc and the Italian lira were all worth about the same. Four or five of any of these would buy you a US Dollar.”
By 1923, you could exchange one shilling, franc or lira for up to 1 billion marks. “Although,” Fergusson writes, “in practice, by then, no one was willing to take marks in return for anything. The mark was dead, one million-millionth of its former self. It had taken 10 years to die.”
How did that happen?