Hyperinflation in Germany (6 Dez 1918 Jahr – 1 Jan 1924 Jahr)

Beschreibung:

The greatest inflation in the history of Germany occurred mainly from 1919-1923, but in fact it had already started in 1914, with the outbreak of WWI. When the war began, the German governments increased the money supply in order to cover the soaring costs, initially of the war itself, and afterwards, of the heavy reparations that the Allies had imposed on Germany in the Treaty of Versailles. One means of increasing the supply of money was the issue of war bonds purchased by many citizens. At the same time, it was decided to cut the linkage between the German mark and the price of gold, a connection that existed at the time in most advanced nations. The result was an expanding gap between the value of gold-based currency (the gold mark, which was actually in use until the end of the days of the German Empire) and paper currency, which could be printed in almost unlimited quantities. Flooding the market with printed money rapidly lowered its value, so that the prices rose disproportionately, while the real wage of salaried workers fell sharply. At the same time, loans and debts lost their value by the same proportion. This was precisely the goal of the German government after the end of the war: to lessen the burden of the reparations and to demonstrate the weakness of the German economy to the allies.