Economic Charts

Scary: A Debt Warning From The Weimar Republic In 1923

Updated: May 06, 2024 | Published: Apr 28, 2024
Verified Investing
By Verified Investing
Scary: A Debt Warning From The Weimar Republic In 1923

The United States debt is nearing $35 trillion. Debt-to-GDP is nearing 130%. Japan has Debt-To-GDP of over 250%. Central banks seem unconcerned. Citizens are slowly waking up to inflation surging and the idea that this is unsustainable.

There is no better example of what can happen when debt gets out of control than in the early 1920's in the Weimar Republic (Germany). The value of 1 gold mark in 1918 was 1 paper mark. By 1923, just five years later, 1 gold mark was worth 1 trillion paper marks.


To fund WWI, Germany had printed a massive amount of money. By the end of WWI their debt was 156 billion marks. In addition, under the treaty of Versailles, Germany had to pay 50 billion marks in reparations.

To pay this massive debt, the government began printing money. By November 1923, one US Dollar was worth 4,210,500,000,000 marks.

The paper was so worthless that Weimar Republic citizens used the cash to burn in their stoves as it was cheaper than wood. A wheelbarrow full of the currency were needed to buy a loaf of bread.

By 1924 the currency stabilized but at that point most of the debts were wiped out due to printing of money. While that may sound like a good outcome, the citizens were left broke and starving.

Many historians argue that this lead the citizens of Germany to look for someone to usher in a 'better' future, allowing Adolf Hitler to take power. In addition, instead of the government being blamed for reckless spending and economic hardship, Hitler blamed the woes of society on the Jews and other minorities.

This is warning for countries that keep running up debt. There is no positive outcome, eventually printing must begin (again).

Common sense dictates this is why gold has started to soar and Bitcoin has become an asset that intrigues many.