Effects of hyperinflation
Effects and reasons of hyperinflation
During 1923 to 1929, Germany suffered from a serious economic problem----HYPERINFLATION.
There are several reasons of the hyperinflation:
*The general strike which was led by the Weimar Republic to against The Kapp Putsch made the amount of the goods is much less than the amount of currency. So they have to produce more money to chasing the goods.
*The weak economic of Germany since it was just suffered from the First World War.
*The Weimar Republic have to pay money for the reparations which were incredibly harsh and Germany had a hard time keeping up with payments, so they started to produce more money.
*Then in January 1923, France took over a key industrial district of Germany putting even greater strain on the German government. The Government didn't have the revenue to pay it's own employees so started printing money to pay them.
We can imagine situation in Germany at that time through this things.
A popular joke in 1923:
‘Two women were carring a laundry basket filled to the brim with banknotes. Seeing a crowd standing round a shop window, they put down the basket for a moment to see if there was anything they could buy. When they turned round a few moments later, they found the money there untouched. But the basket was gone.’
Also some exchange ratio between marks and dollars:
In 1914 –- 4 marks to the dollar.
In November 1923 –- 4.2 billion marks to the dollar.
Effects of hyperinflation
Massive price rises
Busineswsmen
The rich
Germany money became worthless
Fixed incomes
Farmers
Workers
The middle class
During 1923 to 1929, Germany suffered from a serious economic problem----HYPERINFLATION.
There are several reasons of the hyperinflation:
*The general strike which was led by the Weimar Republic to against The Kapp Putsch made the amount of the goods is much less than the amount of currency. So they have to produce more money to chasing the goods.
*The weak economic of Germany since it was just suffered from the First World War.
*The Weimar Republic have to pay money for the reparations which were incredibly harsh and Germany had a hard time keeping up with payments, so they started to produce more money.
*Then in January 1923, France took over a key industrial district of Germany putting even greater strain on the German government. The Government didn't have the revenue to pay it's own employees so started printing money to pay them.
We can imagine situation in Germany at that time through this things.
A popular joke in 1923:
‘Two women were carring a laundry basket filled to the brim with banknotes. Seeing a crowd standing round a shop window, they put down the basket for a moment to see if there was anything they could buy. When they turned round a few moments later, they found the money there untouched. But the basket was gone.’
Also some exchange ratio between marks and dollars:
In 1914 –- 4 marks to the dollar.
In November 1923 –- 4.2 billion marks to the dollar.
Effects of hyperinflation
Massive price rises
Busineswsmen
The rich
Germany money became worthless
Fixed incomes
Farmers
Workers
The middle class