Hyperinflation

Hyperinflation

In 1923, inflation in Germany spiralled out of control and became hyperinflation. Prices began to increase rapidly as the amount of money in circulation increased: the German government had begun to print more notes in order to pay off the interest on its debts.

Causes:

• Long term - The military demands of WW! led to an enormous increase in financial costs.
• Middle term - The acceptance of Reparations, set at £6.6 Billion, in 1921.
• Short term - The adoption of 'passive resistance'…