The Crises of 1923: Hyperinflation

Q: What caused hyperinflation in Germany in 1923?

A: Reparations of £6.6 billion left Germany bankrupt, and after the Ruhr was occupied, the government printed money to pay workers, reducing the value of the mark.

Q: Why did printing money cause hyperinflation?

A: Printing money without real wealth made the mark lose value while prices increased rapidly.

Q: What happened to prices during hyperinflation?

A: Prices rose hourly; at one point an egg cost 80 million marks, and bread rose from 1 mark (1918) to 200 billion marks (Nov 1923).

Q: How did hyperinflation affect workers?

A: Many workers coped better because they had few savings and wages rose, though they had to spend money immediately.

Q: How did hyperinflation affect the middle class?

A: Savings were wiped out, businesses struggled to import goods, many went bankrupt, though debts became easier to repay.

Q: How did the rich and farmers cope?

A: The rich used land, possessions and foreign currency to trade or buy businesses. Farmers could grow food and barter, so avoided the worst effects.

Q: What was the overall impact of hyperinflation on Germany?

A: The currency became worthless, millions faced hardship, and trust in the Weimar Republic was badly damaged.