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During Germany's hyperinflation of 1923, which group unexpectedly benefited from the collapse of the mark?
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A - People with large cash savings
55 votes (15.7%)
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B - People with fixed-rate mortgages
181 votes (51.6%)
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C - People holding government bonds
78 votes (22.2%)
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D - Pensioners receiving fixed payments
37 votes (10.5%)
Total votes: 351
Correct answer: B – People with fixed-rate mortgages.
Explanation: Here’s one of the strangest consequences of hyperinflation: while savers can lose almost everything, borrowers can end up benefiting.
During Germany’s hyperinflation of 1923, the mark lost so much value that people with mortgages fixed in the collapsing currency could repay debts that once represented years of earnings with money worth next to nothing.
Meanwhile, those who had lent the money saw the real value of their repayments disappear.
It’s a reminder that inflation doesn’t affect everyone equally. It can quietly transfer wealth from lenders to borrowers – and that’s one reason heavily indebted governments may be tempted to let inflation run.