r/AskHistorians may be more suitable, but you can look at the wikipedia on MEFO bills for a short run down that covers your questions. Here are some comments that others have provided: this answer from u/kieslowskifan , or this one from u/parksungjun (copied from a post by another in AskHistorians). Mefo bills were a financial instrument that allowed the German government to run deficits that were opaque to international (and local) actors. They were like an alternate form of government bond that was a type of promissory note issued by the government from the central bank through a shell company. They had a short-lifespan (6 months extendable to 5 years) and were ultimately just a balance sheet entity. Seen as insulated from inflation as firms and consumers harbored lingering concerns about the central currency of Germany, Mefo bills were as good as money until the system collapsed. This part is a little spurious as it is not exactly my area of expertise: I'd venture to say that these bills permitted the government to temporarily avoid the Mundell-Fleming trilemma as conditions set post-WWI by the Treaty of Versailles incurred heavy costs on the German economy and by creating Mefo, the German government was able to avoid some of ToV's conditions including limits on bank lending (to government), debt, limits on financing the military, and repaying countries that were due repatriations (though this was less of a factor here). It however drove the German economy into a military industry focus as these bills circulated more widely and capital flowed towards the industry/military industry (note: no free flow of capital in trilemma, but that may have been an objective, in part). There were many other economic and political factors that allowed the these bills to operate temporarily. Chief in their success was the lack of transparency, it was an alternative to currency that operated in the dark. More on reddit.com

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Mefo Bills were was for the Nazi's to spend money secretly. Under the Nazis Germany wanted to spend a bunch of money to re-arm and recover from the Great Depression. However when the government borrows a bunch of money it causes inflation, which they did not want. They also were restricted in what they could do to re-arm because of the Treaty of Versailles, which ended World War I. There is something that exists as a financial instrument called a bill of exchange, which is basically a letter from one person or entity telling a second person or entity to pay a third person or entity. Basically it's someone saying "if you give me $100 today I'll give you a letter telling the bank to pay you $110 next year." So the Nazis set up a company called Metallurgische Forschungsgesellschaft, shortened to MEFO. Mefo did not make a product or provide a service, it only existed on paper. MEFO issued "Mefo bills," which were basically bonds, but they didn't hit the government's balance sheet. This allowed the Nazis to borrow, and spend, a bunch more money than they claimed they were borrowing and spending. This artificially made their economy look like it was doing much better than it was. For example in 1938 there were around 12 billion Reichsmarks of Mefo bills, when the GDP was around 100 billion Reichsmarks. That's 12% of the GDP as "secret" debt that was hidden. That's the equivalent of if the USA had secretly borrowed $4 trillion and hid it from everyone. Additionally because there wasn't necessarily a paper trail tracing back to the government it allowed them to hide what they were spending money on, specifically rebuilding their military in violation of the Treaty of Versailles. TL;DR: Mefo Bills were government bonds that never hit the Nazi government's balance sheet, allowing the Nazis to borrow and spend money secretly. More on reddit.com

That's one part of the Nazi regime that's often overlooked. They were pretty much broke by 1939. More on reddit.com