The Hyperinflation Crisis 1923

What happened in Germany in January 1923?

They missed their payments so France and Belgium sent their troops into the Ruhr. They took goods and raw materials from Germany to make up for the missed payments.

What was the Ruhr?

An industrial area in Germany.

What happened after the occupation of the Ruhr?

German workers went on strike, some turned violent and burned down factories.

What did the government do after the German workers went on strike?

To support them, they printed more money to pay them. This caused the value of German currency (marks) to fall.

What is inflation?

When prices go up but wages don’t.

What is hyperinflation?

When inflation happens very quickly and prices rise out of control.

Why did hyperinflation happen in Germany?

Because the government simply printed more money, when they didn’t have enough, causing the value of money to fall.

What are the effects of hyperinflation?

Money became worthless- millions faced starvation/poverty, prices changed very fast and hourly, money was used for children to play with and used as fuel because it was cheaper than wood.

How much did a piece of bread cost in Germany in late 1923?

200 billion marks.

Who benefitted from hyperinflation and how?

Foreigners- foreign currency was worth millions, farmers- grow own food, trade crops for good, businessmen- could easily pay off debts.

Who suffered under hyperinflation and why?

Workers- wages went up but so did prices, pensioners- no savings, pension couldn’t match price rises, couldn’t afford basics, middle class- lost savings as they became worthless.