Hyperinflation

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Hyperinflation

Causes

  • In the years 1919-23 the income of germany was only half of what it needed to be to pay for the cost of the war.
  • The German government decided to print more banknotes so that it had enough money.
  • Money became worthless. As more money was printed the value of things decreased and the price raised.

Effects

  • It forced millions of Germans into poverty. Pensioners pensions became worthless. Peoples savings were wiped out over nights people who thought they were financially secure found themselves struggling.
  • People with mortgages or loans were able to pay them off quickly as the real value of the loan had fallen. This helped pay of their business loans quickly.
  • Farmers produce could be sold for more however it didn't have that much of an affect as the things the farmers also had to buy rose simultaneously.
  • People who owned land or buildings were okay as the value rose inline with hyperinflation.
  • For working people, their wages rose however slower than the price rises.

Overall summary

Although a small number of Germans benefited, hyperinflation was a DISASTER for Germany. Millions of middle class germans were thrown into poverty. They blamed the Weimar government for their problems. People were desperate and there was a real danger that the government could be overthrown if the countries economic problems were not resolved. 

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