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Economists have long used 1920s Germany as the classic example of what can happen to a nation when monetary inflation gets out of control. So rapid was the inflation of the money sup ply that the exchange rate went from 60 marks per U.S. dollar during the first half of 1921 to 8,000 marks per dollar by December 1922.
There is an old story about an elderly German man who in 1919 was sent to an insane asylum. Early in 1923, the doctors decided that this man was cured and told him to take a taxicab to the home of his brother, which he did. Arriving at his destination, he asked the cab driver how much the fare was, and the driver told ...