Effects of hyperinflation
The Hyperinflation effected many issues and people:
People's pensions and savings became worthless, and as they could not work they were affected very badly and could hardly afford to eat.
Workers had very few savings, so they weren't too badly affected, and most jobs stayed mostly secure. People lost faith in the government, though.
Savings were made worthless by the inflation and businessmen could not buy any goods from abroad either as German money was useless! Many started supporting extremists like the Nazi Party.
What is a Hyperinflation, and what caused it?
What is a hyperinflation??
Inflation is where money starts losing it's value, and as this gets worse, we call it hyperinflation.
Why did it happen in Germany?
The passive resistance that took place in Germany in order to be rid of the ally troups, left Germany in an even worse economic situation as nobody was working. So the Weimar Republic government printed more money to help the Ruhr workers continue their strike, and with more money around, the value of the money went down.
The Extent of Hyperinflation.
Hyperinflation got so bad, that in February 1923 you needed 7000 marks to buy one American dollar and in November 1923 you needed 130,000 million marks. So billion mark notes started to be printed and people stopped using money as it was all worthless.
Prices went up incredibly fast and workers had to rush into shops after being paid, as prices would go up by the hour. At one point, a billion marks was barely enough for a loaf of bread.
People who had worked hard all their lives and saved money sensibly turned into beggars as their pensions and savings lost all value! People started using money as fuel, as it was cheaper to burn that coal or oil etc
More Effects of Hyperinflation
Rich people were largely unaffected if their money was in property or overseas. Rich people started to see the government as incompetant.
Hatred of Jews-
Many Jewish families were very clever with their money and kept it in foreign banks or in diamonds so they were often unaffected! This led to hatred of Jews that people like Hitler acted on!