How did inflation make the economic situation in post-WW1 Germany worse?

Answer 1

In the era following World War I, Germany suffered from severe economic inflation due to several factors. First, its economy had been weakened by the war-effort. Second, it could not achieve stability in its political administration, thus no consistent (or successful) economic policies could be effected. Third, it was saddled with heavy reparation-payments to the victors of the war, mainly Great Britain and France.

Answer 2

Inflation became so bad in the Weimar republic in 1923, it has been labelled a period of 'hyperinflation.'

This was a result of the occupation of the Ruhr valley by the french following terms laid down by the Treaty of Versailles after WW1. It became the Weimar governments policy of passive resistance to the French, so told German Ruhr workers not to work for the French. However, they still had to pay the workers, so they were paying out trillions of marks (the German currency at the time) to pay them. However, the workers were not working in the coal mines in the area, so the government had to buy and import coal also.

To combat this and pay the debt, they decided to print more money. but according to supply and demand, more money, makes the money less valuable. therefore prices started to rise.

in 1913, a loaf of bread would cost you 0.29 marks. in the summer of 1923, it cost 1,200 marks. by November 1923, it had risen to a ridiculous 428,000,000,000 marks. this is the extent of the inflation.

Answer 3

Runaway inflation in any economy causes problems.

When the prices for staples like food, gas, electricity et.c go up, the workers need more money to pay for them, this in turn increases the cost of everything which in turn means the workers cannot afford the staples of life.

The treasury will then start to print money as the cost of everything becomes so expensive that they start running out of it. Between WWI and WWII Germany's inflation rate was so high that it would take a pram full of paper money just to buy a loaf of bread. The net result of this was that the money was seen as worthless and making more of it devalued it even more.

Much of the economic problems in Germany were blamed on the Wiemar Republic. This gave the Nazi party the opportunity to take advantage of the economic situation and make promises to fix Germany's bad economy.