The hyperinflation in the Weimar Republic was a three-year period of hyperinflation in the Weimar Republic (modern-day Germany) between June 1921 and January 1924. The hyperinflation was a cause of considerable internal political instability in the country, the occupation of the Ruhr by foreign troops and misery for the general populace.

In order to pay for the large costs of the ongoing First World War, Germany suspended the gold standard (i.e., the convertibility of its currency into gold) when the war broke out. Unlike the French Third Republic, which imposed its first income tax to pay for the war, the German Emperor Wilhelm II and the German parliament (the Reichstag) decided without opposition to fund the war entirely by borrowing, a decision criticized by financial experts such as Hjalmar Schacht as a dangerous risk for currency devaluation. The government apparently believed that it would be able to pay off the debt by annexing resource-rich industrial territory to the west and east and imposing massive reparations on the defeated Allies. The result was that the exchange rate of the mark against the United States dollar steadily devalued throughout the war from 4.2 to 7.9 marks per dollar.

The government's strategy backfired when Germany lost the war. The new Weimar Republic was now saddled with a massive war debt that it could not afford, made even worse by the fact that it was printing money without the economic resources to back it up. The Treaty of Versailles further accelerated the decline in the value of the mark, such that 48 paper marks were required to buy one US dollar by late 1919.

German currency was relatively stable at about 90 marks per US dollar during the first half of 1921. Because the western theatre of warfare during World War I was mostly in France and Belgium, Germany came out of the war with most of its industrial infrastructure intact and in a better position to become the dominant economic force on the European continent. The London Ultimatum of May 1921, however, demanded reparations in gold or foreign currency to be paid in annual installments of 2,000,000,000 (2 billion) gold marks plus 26 percent of the value of Germany's exports.

The first payment was made when it came due in June 1921. It marked the beginning of an increasingly rapid devaluation of the mark, which fell in value to less than one third of a cent by November 1921 (approximately 330 Marks per US Dollar). The total reparations demanded were 132,000,000,000 (132 billion) gold marks, of which Germany only had to pay 50 billion marks.

Because reparations were required to be repaid in hard currency and not the rapidly depreciating paper mark, one strategy Germany employed was the mass printing of bank notes to buy foreign currency, which was in turn used to pay reparations. This greatly exacerbated the inflation rates of the paper mark.

Beginning in August 1921, Germany began to buy foreign currency with marks at any price, but that only increased the speed of breakdown in the value of the mark. The lower the mark sank in international markets, the greater the amount of marks was required to buy the foreign currency demanded by the Reparations Commission.

During the first half of 1922, the mark stabilized at about 320 Marks per dollar. At this time international reparations conferences were held, including one in June 1922 that was organized by US investment banker J. P. Morgan, Jr. When these meetings produced no workable solution, the inflation changed to hyperinflation and the mark fell to 7,400 Marks per Dollar by December 1922 The cost-of-living index was 41 in June 1922 and 685 in December, a 15-fold increase.

By the fall of 1922, Germany found itself unable to make reparations payments, since the price of gold was now well beyond what it could afford. Also by this time, the mark was practically worthless, making it impossible for Germany to buy foreign exchange or gold using paper marks. Instead, reparations were to be paid in goods such as coal. In January 1923 French and Belgian troops occupied the Ruhr, the industrial region of Germany in the Ruhr valley, to ensure this. Inflation was exacerbated when workers in the Ruhr went on a general strike and the German government printed more money in order to continue paying them for their "passive resistance." By November 1923, the American dollar was worth 4,210,500,000,000 German marks.

The hyperinflation crisis naturally led prominent economists and politicians to seek a means to stabilize German currency. In August 1923, the economist Karl Helfferich proposed a plan to issue a new currency, the "Roggenmark" ("rye mark"), which was to be backed by mortgage bonds indexed to the market price of rye grain. His plan was rejected because of the greatly fluctuating price of rye in paper marks.

It was the Agriculture Minister Hans Luther who proposed a plan that substituted gold for rye and led to the issuance of the Rentenmark ("mortgage mark") backed by bonds indexed to the market price of gold. The gold bonds were defined at the rate of 2790 gold marks per kilogram of gold, which was the same definition as the pre-war gold marks. The Rentenmarks were not redeemable in gold, but were only indexed to the gold bonds. The Rentenmark plan was adopted in monetary reform decrees on October 13–15, 1923, that set up a new bank, the Rentenbank, controlled by Hans Luther, who by then had become the new German Finance Minister.