"1,000,000,000,000 Mark were changed to one Rentenmark
, which was renamed the Reichsmark in 1924."
1923 - The Rentenmark
is adopted as the official currency of Germany in order to counter hyperinflation.
They turn to the German hyperinflation in the 1920s for support of their argument, holding that the government ended runaway inflation by implementing "an active fiscal policy." In particular, TZ argue that it was the backing of the rentenmark
by real estate revenues that ended the hyperinflation.
The RKA was the successor to the German Rentenbank that had been created to underwrite the interim currency, the Rentenmark
, after the hyperinflation.
(23) For instance, the German rentenmark
was instantly pegged to gold in 1923, with no convertibility provision and almost no gold reserves, simply based on a full commitment to control the German money supply.
This led to Germany introducing a new currency, the Rentenmark
. (169) The Rentenmark
had the exchange rate of 1,000,000,000,000 old German marks to 1 Rentenmark
), as well as a new bank to issue it.
Note that these sums cannot be compared with those in footnote 6 because, following the hyperinflation of the early 1920s, a new currency, the Rentenmark
(RM, later Goldmark) was introduced in 1923.
The bank came into existence on 15 November 1923 as the Rentenbank, but with a rentenmark
deposit convertible to gold at the prewar value.
Successful monetary stabilization required more than simply pegging the mark's external value by sale of foreign exchange (which had been tried before) and the introduction of the rentenmark
in November 1923.
The conversion rate from the old to the new money was one trillion paper marks for one Rentenmark
. Not only currency but all loans and paper obligations seemed worthless with the stroke of a pen.