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.
- After the Occupation of the Ruhr they then had to print even more money to pay the striking workers.
- When Germany lost the war they decided to print more money for the damage and for the treaty.
- By 19123 the Government had 300 paper mills and 200 printing shops for the use of printing 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.
- 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.
- Germany experienced inflation during WW1 and had borrowed extensively to finance it's was efforts.
- 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.
- 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.
- Causes of (Hyper) Inflation
- 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.
- 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.
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