Political Disorder 1919-23: economic crises and hyper-inflation Flashcards
What is hyperinflation?
- a period of rapid inflation leading a country’s currency losing its value and prices rising dramatically
- has wholly negative consequences on everybody
What is inflation?
- a general increase in prices (when everything gets more valuable other than money)
- Is not so widespread - value of money is progressively falling and prices are rising but it’s more gradual
When and why did inflation/ the economic crisis begin?
- Inflation from 1914 - Germany spent all its gold reserves from the war
- The economic situation became worse at the start of the Weimar period as it’s trying to recover from the cost of war and paying reparations.
Who was affected by hyperinflation?
Everybody is affected but big business were more protected as they could borrow money more cheaply and buy other rival companies eg. Krups. Some trade unions also benefited because they were more able to persuade employers to raise wages than individual employers - start by paying employees by the hour to try and protect themselves from the rocketing prices - as currency could change within an hour
Small Businesses were harmed significantly because it was hard to run their businesses and they could be bought up by bigger companies - had to often lay off employees or their business might go bankrupt and have to close. Other people who weren’t in trade unions eg. casual workers, women and agricultural workers were at a disadvantage disproportionately.
When did hyperinflation start?
Hyperinflation starts in the summer of 1922 but gets significantly worse when the Ruhr occupation starts. The value of currency falls so quickly so it’s impossible to predict the value of currency will be the next day. Prices in shops and restaurants were increasing every 30 minutes.
What were the bread prices like in Germany 1922-1923?
1922 = 163 marks
January 1923 = 250 marks
July 1923 = 3465 marks
September 1923 = 1,512,000 marks
November 1923 = 200,000,000,000 marks
