Hyperinflation Flashcards
What is hyperinflation?
Hyperinflation is a term to describe rapid, excessive, and out-of-control general price increases in an economy.
What caused the hyperinflation crisis in Weimar Republic?
To pay reparations and the workers striking in the Ruhr, Germany printed more money. This led to hyperinflation.
What were the economic consequences of hyperinflation in Weimar Germany?
1) With prices rising by the hour, people began to buy goods as soon as they were paid.
2) Many people traded items instead of paying with money to get around the problems of hyperinflation.
3) As money became worthless, those with savings lost their money. This especially affected the middle classes.
4) People on fixed incomes could not renegotiate their earnings and the elderly on fixed pensions received no increases. This meant their incomes became almost worthless.
5) Many small business owners went bankrupt.
6) Foreign businesses would not accept the worthless currency which led to shortages of imported goods.
What was the solution to the hyperinflation crisis?
1) Stresemann replaced the worthless currency with a temporary one called the Rentenmark in October 1924. This remained the currency for 25 years.
2) Stresemann signed the Dawes Plan in 1924.
How did Stresemann’s solution to the hyperinflation crisis also fail?
1) People who lost savings never received their money back and they blamed the Weimar Republic for this.
2) People who had suffered during the hyperinflation crisis were bitter about their experience and blamed the Weimar Republic.
3) One of the reasons the Nazi Party organised the Munich Beer Hall Putsch in 1923 was because of the hyperinflation crisis.
