$1.77 Every Year For Life: What Inflation Can Do To Your Finances: Lessons from Germany and its neighbors during the post-World War I inflation. This series of articles is not intended to imply that the U.S. is likely to encounter a hyperinflationary crisis. However, America has experienced bouts of serious inflation in the past and could easily do so again. The extreme conditions that occurred in Germany help to illustrate the mechanisms of inflation better than a more benign course of currency devaluation could do.
People were selling valuable possessions in order to survive. A British Treasury official visited Germany in late 1921 and reported that the people were selling off their furniture, jewelry and pianos one item at a time to pay for food. As inflation progressed, the purchasing power of the Reichsmark sank ever more quickly. Sellers of expensive items suffered in two ways: they were selling into a buyer’s market and could not obtain high prices for their belongings. The second problem was that the money received from the sales rapidly lost its value. With cash in hand from the sale of a cherished family possession, seekers of food and fuel had to stand in line to buy what they needed. Because of shortages of goods in the marketplace, it was not possible to efficiently dispose of a large sum of money in a hurry and obtain full value from it.