Reichsbank Hyperinflation
About Reichsbank Hyperinflation
The Reichsbank, Germanys central bank, facilitated the hyperinflation of 1923 by printing money to fund government deficit spending. The bank was nominally independent but politically controlled. President Rudolf Havenstein personally believed in money printing despite warnings. The Reichsbank printed ever larger denomination banknotes, culminating in the 100 trillion mark note. Havenstein died of a heart attack in November 1923, just as the new Rentenmark was being introduced. His successor Hjalmar Schacht stabilized the currency. The Reichsbank experience haunted German central banking for generations. The Bundesbank, founded in 1957, was given extreme independence and a single mandate of price stability, directly responding to the Reichsbank failure. The ECB inherited this culture.
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