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Gold Price During Hyperinflation? Under the conditions characterized by price increases “so rapid and out of control that the normal concepts of value and prices are meaningless”, what would happen to the price of gold?

Posted by Mr.Copper @ 12:42 on August 9, 2021  

parts:

During a period of stabilization for approximately six months during 1920, 1400 German marks was equal to 1 oz. gold. Three years earlier the ratio was 100 marks to 1 oz. gold.

However, a fourteen-fold increase in the ratio of marks to gold was nothing compared to what was about to happen.

“By July 1922, the German Mark fell to 300 marks for $1; in November it was at 9,000 to $1; by January 1923 it was at 49,000 to $1; by July 1923, it was at 1,100,000 to $1. It reached 2.5 trillion marks to $1 in mid-November 1923, varying from city to city.” (source)

Using the ratio of 1 trillion marks to the US dollar in July 1923, the equivalent price for one ounce of gold was 20 TRILLION German marks!

Any plans to borrow money had been abandoned earlier. They printed whatever marks were needed (like the Global Central Bank in USA) in order to buy other currencies which they could use to pay their obligations, and hopefully chase away the inflationary effects of their efforts.

Here is another example of how those effects translated in real life…

“A student at Freiburg University ordered a cup of coffee at a cafe. The price on the menu was 5,000 Marks. He had two cups. When the bill came, it was for 14,000 Marks. “If you want to save money,” he was told, “and you want two cups of coffee, you should order them both at the same time.”

If we use a price of 5 cents per cup of coffee in US dollars, then the ratio at that time was 140,000 marks to $1. Even though the worst was yet to come, this still represents a 27,900 percent increase in the price of a cup of coffee from five years earlier.

At one point in 1923, the price for one loaf of bread was more than 200 billion marks.

https://www.fxempire.com/forecasts/article/gold-price-during-hyperinflation-727825

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Post by the Golden Rule. Oasis not responsible for content/accuracy of posts. DYODD.