Hyperinflation

why was Germany already suffering from inflation?

due to the effects of the war and increasing government debt

how did Kaiser Wilhelm plan to fund Germany’s involvement during WW1 and why didnt it work?

• he payed entirely by borrowing as he thought that Germany would be able to pay the loans back with the reparations they would impose on the Allies when they won

• but this didn’t work because they lost

how did passive resistance make inflation worse?

it meant that no goods were being produced in the Ruhr which made the German economy weaker

what did the German government do in order to pay the striking workers during the occupation of the Ruhr?

they just printed more money

how did the flood of money lead to hyperinflation?

the more money was printed, the more prices rose.

when was the peak of hyperinflation?

Nov 1923

how much was a loaf of bread in Jan 1923 compared to Nov 1923?

250 marks in January, 200,000 million marks in November.

why were workers paid twice a day during this period?

as prices rose so fast that their wage was practically worthless by lunchtime

what did people start doing to get things instead of paying with money?

bartering (paying in kind not cash) - eg. 2 eggs for a haircut

who benefited from hyperinflation?

borrowers, businessmen, landowners and those with mortgages

• they could pay their debts off easily as their money was essentially worthless

farmers

• their products remained in demand so they received lots of money as prices got higher

who was hit worst by hyperinflation and why?

those on fixed income (eg. students, pensioners and the sick)

• their incomes did not keep up with prices

those with savings or who has lent money

• their savings were now basically worthless