The situation of hyperinflation in Germany in 1922-1923 remains the most famous price surge in history. It left its traces with the average German and a link is often established between the hyperinflation of 1923 and the accession to power of the Nazis in 1933. As in France, the outbreak of the First World War in 1914 had led to an immediate suspension of the German mark's convertibility into gold. Between 1914 and 1918, the paper money supply then increased four-fold while prices rose by 139%, as Germany had to buy its war supplies with precious metals, and print more money to keep paying its internal suppliers. After 1918, the US refused to forfeit the debt France, Italy, England and other allies had contracted during the war. Some of these countries had little choice then but to make sure Germany would fulfill in turn its own war damage commitments, set out in the Treaty of Versailles of 1919. This soon led Germany into an impossible economic situation. The Reichsbank printed ever more banknotes in order to lend them to the State to pay salaries, while industrial production collapsed as France and Belgium decided, in January 1923, to send their armies to occupy the productive Ruhr district in order to force Germany to resume its payments. Inflation reached its peak in October, 1923 at 29,500% (about 21% per day, compounded).

Hjalmar Schacht, an economist, appointed in October 1923 to take charge of the monetary problems of Germany, rapidly became Governor of the German Central Bank, the Reichsbank, when its chairman died. Schacht spearheaded a set of monetary reforms. A new currency, the rentenmark, was created by official decree on October 15, 1923, to be effectively issued on November 15, 1923, by the Rentenbank. It was backed by land, industrial and residential property mortgaged by the bank. That currency was priced at a rate of 1 rentenmark to 1,000,000,000,000 mark and 4.2 to the US dollar. At the same time, the supply of the new currency was strictly controlled as the new monetary authorities committed not to fund the budget deficits and as such the Reichsbank stopped refinancing treasury bills. From 1924 onward, the German economy entered a non-inflationary expansion phase that would last until 1930.