Transcript German Hyperinflation

German
Hyperinflation
A convenient scapegoat
The Situation
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As the ‘losers’ of WWI, German was forced to accept blame for
starting the war.
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This meant both politically and economically.
The Treaty of Versailles ordered Germany to pay war reparations to
the Allied nations.
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Reparations are payments made to correct some wrongdoing.
The total bill was 112 billion Reichsmarks (about
$28,350,000,000
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US Dollars)
In today’s terms, that would be equal to $326,020,691,197
Inflation is when prices rise, causing the value of money to fall.
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This means that every single $1 buys less goods.
How the Inflation Got Out of Hand
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Germany was doing alright making their payments at the start.
But in 1921, the “London Ultimatum” ordered that Germany had to pay a
minimum of 2 billion Marks every year.
The Germans couldn’t do it and had to PRINT more and more and more
money to try and make the payments.
It got insanely out of hand.
German Postage stamps = 50 billion marks
There were 1 trillion mark notes ($100,000,000,000,000) printed by the
German government.
In the end, German money was worthless. It cost more to print it than it was
worth.
It was so worthless, that France and Belgium invaded the Ruhr Valley (an
important industrial region of Germany) to make sure they would get their
money in the form of resources (like coal) if they couldn’t get it in cash.
Experts saw it coming
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Economists all over the world saw the amount of reparations as
being insane.
They knew the Germans would never be able to pay it off.
In the end, all the reparations did was to increase German hatred for
the Western powers and fuel their desire for revenge.
Adolf Hitler blames the inflation on bankers and stock brokers who
were making money on the crisis, many of whom were Jewish.
He also uses it as great propoganda to fuel the Nazi rise to power.
SUMMARY
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Inflation is a rise in prices that causes the value of money to
fall.
Hyperinflation is massive amounts of inflation.
Hyperinflation in Germany was caused by the German
government printing large amounts of money to pay the war
reparations imposed by the Treaty of Versailles.
Hitler and the Nazi party will use the poor state of the German
economy as an excuse to blame Western Europe, Jews and
other groups for Germany’s troubles.