It all started with WWI. The Germans spent a huge amount of money trying to win the war but lost. After the war they were ordered to pay reparations and this sent them over the edge. In 1914 the Reichsbank, the German central bank at the time suspended the conversion of Marks into Gold. They did this in order to print their way out of trouble partly, and partly to be smart asses. They said "You want reparations assholes? We'll give you worthless paper reparations!" In the next 5 years the amount of money in circulation quadrupled. The cost of living doubled and gold went up 50%. This sounds bad but you haven't seen nothing yet.
In the sixth year it really got crazy. Gold went up more than another 100% in that year alone! The cost of living went up another 50% along with the amount of money in circulation. By 1919 the cat was out of the bag and there was a huge rush to buy gold and foreign currencies. By the end of 1920 gold was up 1,500% in Marks. The cost of imported goods rocketed up 1,900%. From 1922 to 1923 imported goods and gold went up by 22,000%. Domestic goods even got in on the act shooting up 18,000%. Food prices went up 14,000%!!!
Turroni blames the utter lambasting of the Mark on "psychological influences." There was zero confidence in the future of Germany. Add to that the people wanting to avoid the high taxes that the government stupidly hoped to raise to balance the budget and you have a hyperinflation cocktail. The German government made the textbook mistake of trying to protect their dead currency in the market. They even outlawed the holding of gold and foreign currency. People screamed a big "Fuuugggg Yoouuu" to that law because all the while they were still printing money to finance deficit spending. Since people didn't obey the "no gold" law the central bank thought, "We'll fix these bastards!" and had daily sales of 20 million gold marks to try and crash the price and stem speculation. Demand ate that shit up! They realized they would run out of gold before the speculators appetite for gold ran out and had to stop.
The Germans were afraid to raise interest rates afraid of hurting the economy so they tried to slow credit down. They only gave credit to a select few which only resulted in that select few companies getting stinking rich. It did nothing to halt inflation and they finally had to raise interest rates. They rose 30% per day at one point! trying to avoid raising rates led to them rising even crazier than they would have had they just gone ahead and ticked them up in the first place. At one point prices went up faster than the exchange rate. This pushed enterprising Germans to cross the boarder, buy goods in other countries, and come back and sell them at home for nice profits. This tanked the Mark even further. This is how high inflation feeds on it's self. People have no choice but to do things that make it worse if they want to live.
More and more savings were held in either gold or foreign currencies. When the Mark's fall really accelerated unemployment fell sharply with it. By mid 1922 there was practically zero unemployment. With the drop in the Mark foreign and domestic demand for German good went up accordingly. German people wanted to change their Marks into tangible goods and foreigners wanted something for nothing as their currency was in high demand in Germany. The domestic demand soon fell off though as the inflation got worse it restricted real income and consumption fell. Since everyone wanted to exchange their marks for foreign currency every transaction turned into a complex transaction with tricky taxes, ever changing value's, and the figuring out of pay supplements. This was a huge drag on production and productivity fell by nearly 50%. Why work hard for a paper currency that was worthless?With ever bigger and bigger numbers with values ever changing nobody wanted to be a bookkeeper.
In the beginning stock prices kept up with inflation, but by 1921 they fell behind by a lot. The drop in stock prices was so crazy that a million car producer at the time, Daimler car co.'s market cap was equal to 300 cars. Corporations created special voting shares to protect their ownership of the companies. In worthless Marks stock prices looked high. This induced people in need of money (basically everyone) to sell. What looked like sky high prices through the inflation lenses were actually bargain basement prices and most had sold at the bottom. Stocks rallied towards the end as money came into the market because it had gotten so difficult to find gold for sale. But still, people who held stocks the whole time lost 75% of their investments.
Hit the hardest by inflation was the highly skilled workers doctors particularly.Their real income fell by 75%! With their purchasing power all but gone people were forced to eat horse meat and even dog meat because it was all they could afford. Mortgage and bond holders lost everything. Tenants came out the best as they lived 5 or so years basically rent free, but with a dog meat burger for dinner I doubt they felt fortunate.
In the end (1923) the mark became worthless and Germany went back on the gold standard to back up their new currency the Rentenmark. Germans were given one Rentenmark for every trillion old Marks they held! Most were completely wiped out.