Main causes of Hyperinflation
- Created by: IrvineSessions
- Created on: 02-05-18 15:05
View mindmap
- What were the main causes of hyperinflation crisis of 1923
- Treaty of Versailles War Reparations
- Germany were forced to pay £6.6 billion in reparations to the allied countries (FR and GB)
- The amount was considered too high for the German people
- Eventually, they were unable to continue making payments
- Payments could be made in raw materials - made difficult by other terms of the treaty
- territorial loses (including industrial lands)
- this meant that they were limited in terms of payment methods
- territorial loses (including industrial lands)
- When Germany stopped payments, French and Belgium forces occupied the industrial area of the Ruhr
- their way of trying to force payments
- Classical Gold Standard System
- Before the war, the German mark was backed with gold reserves
- Very little change of inflation
- Restraint on printing money
- System was scrapped at the outbreak of the First World War
- Currency had to backed by physical gold
- To fund the war, the government incurred a 150 billion mark debt
- began mass printing money
- After the war, the Weimar Republic continued mass printing
- began mass printing money
- French and Belgium Occupation of the Ruhr
- 1923, French and Belgium troops occupied the industrial area of the Ruhr
- In an attempt to pressure Germany into restarting the reparations payments
- Ebert called for a General strike
- promised that all those on strike would continue to be paid
- French and Belgium workers were sent to the Ruhr instead
- In order to continue paying the striking workers, the government began mass printing money
- eventually, the money became worthless
- 1923, French and Belgium troops occupied the industrial area of the Ruhr
- Treaty of Versailles War Reparations
Comments
No comments have yet been made