Hyperinflation

  • Created by: Surina.
  • Created on: 28-01-18 14:22
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  • (Hyper) Inflation
    • Causes of (Hyper) Inflation
      • Germany experienced inflation during WW1 and had borrowed extensively to finance it's was efforts.
        • When the reparations figure was announced £6,600 million at £100 million per year the Weimar government claimed they couldn't pay that much so they carried on printing more money.
          • In 1919-1923 the income of the German money was only a quater of what the Government needed so they printed more until they had enough.
            • By 19123 the Government had 300 paper mills and 200 printing shops for the use of printing money.
              • When Germany lost the war they decided to print more money for the damage and for the treaty.
                • After the Occupation of the Ruhr they then had to print even more money to pay the striking workers.
                  • The government had printed to much money the mark had became worthless and the value of the mark started to fall rapidly.
    • Effects of (Hyper) Inflation
      • Bad
      • Good
        • Workers who had a job found they just kept on getting payed higher and higher.
        • Unemployment benefits just went higher and higher.
        • Thos who had debts or had taken out loans could pay back the money at a fraction of the real cost.
        • The rich who had not just land but money, possessions and currency were protects because the value of their possessions rose with the inflation.
        • Many rich businessmen were able to take advantage of the situation by taking over the smaller bankrupt companies.
        • Farmers had produced food which they could sell at higher prices (but essentials they had to buy increased in price eg: food for animals).
      • Although many people benefited millions of middle class were thrown into poverty and blamed the Weimar government.
        • Rich businessmen benefitted but trading became impossible and there was a danger that the government might be overthrown if the economic problems were not fixed.
          • So in 1923 Gustav Stresseman became the new chancellor and introduced the new currency the following year the new currency and loans from the USA enabled an economic recovery.
  • Effects of (Hyper) Inflation
    • Bad
    • Good
      • Workers who had a job found they just kept on getting payed higher and higher.
      • Unemployment benefits just went higher and higher.
      • Thos who had debts or had taken out loans could pay back the money at a fraction of the real cost.
      • The rich who had not just land but money, possessions and currency were protects because the value of their possessions rose with the inflation.
      • Many rich businessmen were able to take advantage of the situation by taking over the smaller bankrupt companies.
      • Farmers had produced food which they could sell at higher prices (but essentials they had to buy increased in price eg: food for animals).
    • Although many people benefited millions of middle class were thrown into poverty and blamed the Weimar government.
      • Rich businessmen benefitted but trading became impossible and there was a danger that the government might be overthrown if the economic problems were not fixed.
        • So in 1923 Gustav Stresseman became the new chancellor and introduced the new currency the following year the new currency and loans from the USA enabled an economic recovery.

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