The Great Inflation

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  • The Great Inflation.
    • Why did the Great Inflation happen?
      • The German Government did not have enough money to pay off the reparation prices from the Treaty of Versailles.
      • When the French marched into Germany's most important industrial reign in the Ruhr, under the legal terms of the Treaty of Versailles, the Germans in the Ruhr responded using passive resistance.
        • This meant that Germany's main income was lowered even more. As a way of trying to combat this, the Germans simply printed more money.
          • This made the value of the money go down and also the prices of items go up. Although this had been happening since the time of the Kaiser, this time it was a lot worse. This was called hyperinflation
    • Life during the Great Inflation.
      • People that had been saving money and had pensions now found that their savings were worthless
      • Workers and people living off benefits were to some extent protected as as the rates went up, so did their wages.
      • People who had debts or had taken out loans could now pay them off extremely easily.
      • The rich moved their money abroad into foreign currency, so they were not affected.
    • How did Stressman see Germany out of the inflation?
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