Economic Problems Leading to Hyperinflation:
.Prices in Germany had been rising during the First World War, and continued to do so afterwards.
.However, after the announcement by the allies of the reparations bill in April 1921, panic set in, leading to hyperinflation.
The Invasion of the Ruhr:
.The first installment of reparations payments were made in 1921, but nothing was paid the year later in 1922.
.In December 1922, the German government argued that, with hyperinflation causing economic chaos, it could not afford to pay in 1923.
.The French thought that the Germans were exaggerating their economic difficulties to avoid paying altogether.
.Therefore, in January 1923, French and Belgian troops invaded the Ruhr (Germany's main industrial area) with the intention of collecting the reparations payments in kind.
.The people of Germany were outraged; they were united against the invaders.
.The government ordered the workers in the Ruhr to go on strike - "passive resistance".
.The French responded by sending in…