The Weimar hyperinflation is certainly one of the most dramatic periods in German economic history. The peace treaty of Versaille in 1919 imposed enormous reparation payments on Germany, which found itself on the losing side of World War I. In fact, John Maynard Keynes predicted at the time that the reparation figures are excessive and counterproductive. His thoughts are summarized in his book "The economic consequences of the peace", which he wrote in the same year.
Germany's economy still suffered from the economic consequences of World War I in the early 1920s. The country thus found itself unable to pay the reparation payments that were asked for by the Allies. To make matters worse, French and Belgium troops occupied the Ruhr in 1921, an industrialized region in Western Germany, to extract resources and raw materials instead as Germany was unable to meet its debt obligations.
Consequently, the German state started to print massive amounts of money to buy foreign currency, which then was used to pay back its debt to the Allies. The result was, of course, a quickly depreciating currency as well as rapidly rising inflation. As the German Mark depreciated, Germany had to print more and more money to buy a given amount of foreign currency. Here we see Milton Friedman's principle in action: (Hyper-)inflation is always a monetary phenomenon.
Peak inflation was reached in 1923 when prices increased by a factor of about one billion over the course of the entire year. This basically meant that prices were doubling every second day by the end of the year. Money literally became worthless. In the end, people even used banknotes to heat their apartments. As the paper started to have more value than its monetary equivalent, the economic system broke down and people had to resort to barter.
This time period is certainly one of the most dramatic episodes in German economic history. It is often argued that memories of the hyperinflation are somehow engrained into German culture. The German Bundesbank was well known for its relatively hawkish attitude in the post-Word War II period and Germany's inflation rate was lower than that of most other countries during the inflationary period of the 1970s, commonly known as the "oil price shocks" (even though it was rather easy money instead of increasing oil prices that caused the general rise in the price level).
During the early 1990s, many European countries started to peg their currencies against the Deutsche Mark in order to reign in inflation levels and to achieve some credibility in financial markets. Moreover, it is sometimes argued that the ECB is modelled after and continues to pursue policies that are in accordance with Bundesbank preferences.
Especially during the Euro Crisis, the degree of ECB hawkishness has imposed severe economic costs on many Eurozone countries, especially Southern Europe, as inflation rates were not allowed to exceed 2%. Deflation and economic stagnation in Southern Europe has led to enormous losses in output and large increases in unemployment. These are economic scars that will affect some of the member countries in question for years to come.
One of the key lessons, unfortunately very often overlooked in Germany, is that deflationary episodes are often even more scary that rapid inflation. Yes, the hyperinflation almost led to a total breakdown of the economic system. However, it is the deflationary episode during the gold standard and the banking crises in the early 1930s, which led to mass unemployment and facilitated the rise of the NSDAP, culminating in the election of Hitler in 1933.