Hyperinflation pre WW2

[John53]

I was watching a show on the causes of WW2 this afternoon and they briefly touched on hyperinflation. They claimed in 1913 20 German Marks = 1 English Pound, in 1923 14 trillion Marks = 1 Pound. In the Wikipedia page I will add at the bottom they claim "A loaf of bread in Berlin that cost around 160 Marks at the end of 1922 cost 200,000,000,000 Marks by late 1923".

It's hard for me to get my head around it.

Hyperinflation in the Weimar Republic - Wikipedia

 

[ImmortalFlame]

I was watching a show on the causes of WW2 this afternoon and they briefly touched on hyperinflation. They claimed in 1913 20 German Marks = 1 English Pound, in 1923 14 trillion Marks = 1 Pound. In the Wikipedia page I will add at the bottom they claim "A loaf of bread in Berlin that cost around 160 Marks at the end of 1922 cost 200,000,000,000 Marks by late 1923".

It's hard for me to get my head around it.

Hyperinflation in the Weimar Republic - Wikipedia

Paper money became so worthless at the time that German children would use wads of cash as toy bricks:

Some got a bit more inventive about it, though:

 

[Stevicus]

I was watching a show on the causes of WW2 this afternoon and they briefly touched on hyperinflation. They claimed in 1913 20 German Marks = 1 English Pound, in 1923 14 trillion Marks = 1 Pound. In the Wikipedia page I will add at the bottom they claim "A loaf of bread in Berlin that cost around 160 Marks at the end of 1922 cost 200,000,000,000 Marks by late 1923".

It's hard for me to get my head around it.

Hyperinflation in the Weimar Republic - Wikipedia

It was definitely a key factor which contributed to the Nazis' rise to power.

 

[Estro Felino]

It was definitely a key factor which contributed to the Nazis' rise to power.

WW1 winners were an indirect cause of the birth of German National Socialism. Aka Nazism.
Because :

Germany loses WW1 -----------→ Reparations Commission in US demand that Germany immediately pays for all war debts and reparations-----------→ Germany needs to buy foreign currency to pay for those debts and reparations -----------→ the German State is forced to print lots of money to buy foreign currency -----------→ Papiermark loses value -----------→ Hyperinflation in Germany -----------→ France and Belgium occupy the Ruhr and demand coal as payment -----------→ Germany prints more and more money to pay the Rurh miners -----------→ Hyperinflation exacerbates -----------→ Schacht becomes president of Reichsbank -----------→ Nationalism and Socialism on the rise.

I meant that there were banking dynasties in the US (we all know who they were) who took advantage of all this and benefitted from Germany's financial crisis.

 

[Stevicus]

WW1 winners were an indirect cause of the birth of German National Socialism. Aka Nazism.
Because :

Germany loses WW1 -----------→ Reparations Commission in US demand that Germany immediately pays for all war debts and reparations-----------→ Germany needs to buy foreign currency to pay for those debts and reparations -----------→ the German State is forced to print lots of money to buy foreign currency -----------→ Papiermark loses value -----------→ Hyperinflation in Germany -----------→ France and Belgium occupy the Ruhr and demand coal as payment -----------→ Germany prints more and more money to pay the Rurh miners -----------→ Hyperinflation exacerbates -----------→ Schacht becomes president of Reichsbank -----------→ Nationalism and Socialism on the rise.

I meant that there were banking dynasties in the US (we all know who they were) who took advantage of all this and benefitted from Germany's financial crisis.

Not sure if it was the U.S., though, since the Senate didn't ratify the Treaty of Versailles. Wilson's 14 Points didn't say much about reparations, as it was Britain and France who pushed for German reparations.

The irony is that a simple declaration in 1917 that the Allies would accept "peace without annexations or indemnities" could have saved the Kerensky regime in Russia and prevented the rise of Bolshevism. A similar approach towards Germany likely would have softened the economic blow, at least enough to forestall the rise of any extremist government in that country.

Public opinion in the U.S. was pushing more towards a more detached attitude towards Europe, at least in the sense of "let Europe handle their own problems." Some people refer to this as "isolationism," although I never really thought that term was entirely accurate. We were never isolated, since we still had free and open communication, commerce, trade, diplomatic relations with most countries of the world. What we didn't have was permanent military alliances.

 

[Twilight Hue]

It was definitely a key factor which contributed to the Nazis' rise to power.

Well time to keep history from repeating itself.

 

[Revoltingest]

I have one of these.
People get a kick out of it's being real.

 

[Estro Felino]

I have one of these.
People get a kick out of it's being real.

The Zulus' land is not exactly the same as the first industrial power in Europe.
It all depends on the GDP, on the produit net, as Quesnay used to say.
If a country produces and even overproduces, they can print any quantity of money.
But unfortunately on nowadays macroeconomics books you read nothing but stereotyped banalities, forgetting about the great economists of the past.

 

[Estro Felino]

Not sure if it was the U.S., though, since the Senate didn't ratify the Treaty of Versailles. Wilson's 14 Points didn't say much about reparations, as it was Britain and France who pushed for German reparations.

The irony is that a simple declaration in 1917 that the Allies would accept "peace without annexations or indemnities" could have saved the Kerensky regime in Russia and prevented the rise of Bolshevism. A similar approach towards Germany likely would have softened the economic blow, at least enough to forestall the rise of any extremist government in that country.

Public opinion in the U.S. was pushing more towards a more detached attitude towards Europe, at least in the sense of "let Europe handle their own problems." Some people refer to this as "isolationism," although I never really thought that term was entirely accurate. We were never isolated, since we still had free and open communication, commerce, trade, diplomatic relations with most countries of the world. What we didn't have was permanent military alliances.

The US did have a detached attitude towards Europe back in the twenties.
It was certain US banking dynasties that did not have a detached attitude towards Europe.
But a predatory attitude towards Europe.
And Washington DC has always rolled red carpets on them, instead of reprimanding them.

 

[Revoltingest]

The Zulus' land is not exactly the same as the first industrial power in Europe.
It all depends on the GDP, on the produit net, as Quesnay used to say.
If a country produces and even overproduces, they can print any quantity of money.
But unfortunately on nowadays macroeconomics books you read nothing but stereotyped banalities, forgetting about the great economists of the past.

Hyper-inflation can happen anywhere in the world.
BTW, modern economics offers better understanding
than earlier works. It's because of rejecting "homo
economicus".
Homo economicus - Wikipedia

 

[Estro Felino]

Hyper-inflation can happen anywhere in the world.
BTW, modern economics offers better understanding
than earlier works. It's because of rejecting "homo
economicus".
Homo economicus - Wikipedia

The subprime loans crisis took place in the US, not in Europe.
So...more evidence of how self-destructive high finance has become.

 

[Revoltingest]

The subprime loans crisis took place in the US, not in Europe.
So...more evidence of how self-destructive high finance has become in the US, and how European economists were right.

The sub-prime loan problem was a creation of
the federal government, eg, subsidized low
interest, requiring high risk loans, creating
PMI to allow too high leveraged loans, tax
treatment of gains that encouraged speculation,
refusing allowing Fannie Mae & Freddy Mac
to re-negotiate troubled loans in favor of
foreclosure.

 

[Estro Felino]

The sub-prime loan problem was a creation of
the federal government, eg, subsidized low
interest, requiring high risk loans, creating
PMI to allow too high leveraged loans, tax
treatment of gains that encouraged speculation,
refusing allowing Fannie Mae & Freddy Mac
to re-negotiate troubled loans in favor of
foreclosure.

In 2012 the District Attorney of NY sued Bear Stearns and Emc Mortgage, on the charges of fraud.
Washington DC has nothing to do with it. Or rather, its guilt has always been pandering those tragic and destructive banking dynasties.

 

[Revoltingest]

In 2012 the District Attorney of NY sued Bear Stearns and Emc Mortgage, on the charges of fraud.
Washington DC has nothing to do with it.

Then you're unfamiliar with the federal policies I mentioned.
And those are just the tip of the iceberg.
Government creates the environment that lead to the
consequences we observe. Fraud, failure, inflation,
recession....they all stem from policies, eg, subsidizing
dysfunctional investment, regulation prohibiting solutions,
regulation requiring risky lending.

I'm a real estate investor, manager, commercial borrower,
& commercial lender (albeit a small fish). I live the things
you only talk about in a far away country that seems to love
socialism & fascist government. We're not likely to share a
perspective.
Thousands commemorate Italy's fascist dictator Mussolini

 

[Estro Felino]

Then you're unfamiliar with the federal policies I mentioned.
And those are just the tip of the iceberg.
Government creates the environment that lead to the
consequences we observe. Fraud, failure, inflation,
recession....they all stem from policies, eg, subsidizing
dysfunctional investment, regulation prohibiting solutions,
regulation requiring risky lending.

I'm a real estate investor, manager, commercial borrower,
& commercial lender (albeit a small fish). I live the things
you only talk about in a far away country that seems to love
socialism & fascist government. We're not likely to share a
perspective.
Thousands commemorate Italy's fascist dictator Mussolini

I do respect your competence in your sector.
But it's not all 100% black and white. It's like you said: Government does nothing but making mistakes, while the privates are flawless.

 

[Revoltingest]

I Government does nothing but mistakes, while the privates are flawless.

That's your straw man.
Not anything I've ever said or even implied.

People run businesses & work in them.
People are highly flawed.
Governmental & economic systems should
take this into account, & be designed to function
well despite flawed players. This I believe.

Big problems arise when government creates
an environment that ignores human flaws.
Encourage people to buy the biggest home they
can qualify for with a 100% financed loan...then
they'll do this. So when there's a recession, they
have negative equity. This is bad policy.
What does government then do? Prevent the
largest lenders from re-negotiating loans so that
the borrowers can stay solvent...just foreclose.
This is bad policy.
I could go on. But I hope you get the picture.
We need better leaders to make better policies.

 

[Estro Felino]

That's your straw man.
Not anything I've ever said or even implied.

People run businesses & work in them.
People are highly flawed.
Governmental & economic systems should
take this into account, & be designed to function
well despite flawed players. This I believe.

Big problems arise when government creates
an environment that ignores human flaws.
Encourage people to buy the biggest home they
can qualify for with a 100% financed loan...then
they'll do this. So when there's a recession, they
have negative equity. This is bad policy.
What does government then do? Prevent the
largest lenders from re-negotiating loans so that
the borrowers can stay solvent...just foreclose.
This is bad policy.
I could go on. But I hope you get the picture.
We need better leaders to make better policies.

With all due respect...I cannot and will not try to understand the complexity of the American macroeconomical system.
I do know how the EU system works, though. And I would like Europe to be separated from the US, culturally. Speaking of the vision of economy, society and politics.
Here socialism is something sacred, to begin with. Inviolable.

 

[Revoltingest]

...I would like Europe to be separated from the US, culturally.

Impossible.
You guys love many aspects of our culture.
In particular, music, TV, & movies.

 

[Estro Felino]

Impossible.
You guys love many aspects of our culture.
In particular, music & movies.

I meant as for economic vision.