hyperinflation

• by 1914: lots of natural resources, advanced industry, well educated population and advanced banking system
• problems by war: loss of resources (territories), reparations, increase in prices, increase in national debt (144,000 million marks in 1919)
• long term causes: Germany had no provisions for long, drawn out war, sold 'war bonds' to public however just increased national debt (84% of expenditure in war borrowed)
• medium term: government used deficit financing (reduce tax and give people more to spend increasing demand for goods), reparations added to economic burden
• short term: July 1922 Weimar gov asked to suspend reparations but allies refused. December 1922 French and Belgium troops occupied Ruhr (industrial area), workers did passive resistance (still paid), French prevented delivery of coal to Germany, Gov printed more money
• winners: mortgage holders as borrowed money easily paid off, exporters as sales to foreign countries attractive as high exchange rate , Hugo Stine's owned 20% of German industry by 1923.
• losers: fixed income as drastically declined, savers money invested becomes worthless
• social consequences: health declined and mortality rate increased, decline in law + order, increased crime, increase in prostitution, growth in suicides and increase in scapegoats (Jews)
• recovery: Stressman chancellor for 100 days and called off passive resistance in Ruhr and resumed reparations payments, gov expenditure cut (over 70,000 public employees sacked), rentenmark introduced, Dawes plan April 1924