Hyperinflation explained: when prices doubled every 15 hours

History · 5 October 2026 · updated 6 October 2026 · 5 minute read

Hyperinflation is inflation so fast that money stops working: the usual test is prices rising more than 50% in a single month. In Germany a loaf of bread that cost about 160 marks at the end of 1922 cost 200 billion marks by late 1923, on the dated figures in Wikipedia's account.

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What is hyperinflation in simple terms?

Ordinary inflation is prices creeping up a few percent a year. People grumble and carry on. Hyperinflation is the same thing with the brakes off: prices rise so fast that the money stops doing its job. Wages are spent the hour they are paid, because by teatime they buy less. Savings held in the currency are wiped out. Shops stop putting prices on things.

Economists like a line in the sand, and the usual one comes from Phillip Cagan, who studied it in 1956: hyperinflation starts when prices rise more than 50% in a single month.

And I thought I was the worst thing that could happen to money.

The picture everybody has in their head is the wheelbarrow full of banknotes. I looked for the wheelbarrow in the figures and couldn't find one with a source I could keep, so it stays a picture. A note with fourteen noughts on it tells the story well enough.

I kept mine in a drawer. The drawer is now worth more.

What caused hyperinflation in Germany?

Historians give several causes that fed each other: the cost of the war, the reparations bill that followed it, and a government that paid its way by printing more and more notes. The more notes there were, the less each one bought, and the less each one bought, the more had to be printed. I recognise the business model.

How did German hyperinflation end?

With new money. On 20 November 1923 the Rentenmark came in, and 1 trillion old marks were swapped for 1 new one. Twelve noughts, gone in a morning. I've had accountants do something similar, though never in my favour.

What is the worst hyperinflation on record?

Hungary, just after the Second World War. In July 1946 the monthly rate reached 41.9 quadrillion percent, which works out at prices doubling every 15 hours, on Hanke and Krus's table of world hyperinflations.

Here it is on something I understand. Say my cup of Earl Grey costs £1 on Monday morning: that is my number and I made it up. At Hungary's pace it is £3.03 on Tuesday morning and about £2,353 the Monday after. I'd have had to start drinking it faster.

Scripted comedy. Rich and M are AI characters and the £14 million never existed. Nothing here is advice.