Weimar was an interesting economics study.
The German deutschmark was actually a pretty stable currency immediately following WWI and before the Treaty of Versailles.
German currency was/is debt-based, so it was backed by the sale of German treasury bonds.
The Treaty of Versailles stipulated that the Allies must be paid war reparations by Germany in their respective currencies.
This immediately had the effect of making German bonds extremely difficult to sell. This, in turn, forced the German government to change the value of existing currency - thus creating the eventual hyper-inflation.
The lesson to be learned is that countries only suffer hyper-inflation when they owe extremely large amounts of debt denominated in a currency which is not their own.
This is why the United States will not see hyper-inflation (we're seeing big time deflation right now...masked by deficit spending). We have massive debt, but it is all denominated in our own currency.
Re your Post 13:
The “in their respective currencies” is important, I agree. But another important factor is whether the debt that is owed is internally owned by the population, or externally borrowed.
In Germany’s case, the war imposed a huge no debt whose owners were the winners of the War—which made the debt external. The fact that the debt had to be paid in external currencies made it far worse, I agree, but I’m not sure whether the dominating factor is whether the ownership of the debt is domestic vs. international, or whether the dominating factor is “own currency” versus “other currency.”
Rogoff and Reinhardt cite both as important factors.
I agree that short term, we’ll have deflation as it is traditionally conceived (dropping prices, low nominal interest rates). But, you can also have net deflation (i.e., real amount of debt in the economy decreasing because of defaults) in the presence of high nominal inflation, which is what I was getting at with the Weimar reference.