Consequences of German Inflation

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How far were the consequences of the German inflation disastrous for Germany in 1923? (30 marks) The impact of hyperinflation was huge and caused havoc all across Germany. It has been claimed that the worst consequence of the inflation was the damage done to the German middle class. Inflation occurred as a result of a number of events including passive resistance, Germany’s debts from war reparations forcing Germany to continue to borrow more and more money. Germany was bankrupted after WW1 and robbed of its ability to feed itself and pay war reparations without printing money. The consequence of this was that old money was wiped out in Germany. The new money borrowed in order to rebuild the German economy came largely from Jewish bankers, who somehow avoided the effects of the hyperinflation. Many who suffered a substantial amount during hyperinflation turned to support a strong party who promised to make a difference. Hitler came to power on a campaign of mass reconstruction of Germany, and building up the military to the extent of having the clout to tear up the hated Versailles agreement and get away with it. In order to finance this, it meant more borrowing from the Jewish bankers. Then it dawned on a lot of people that if you simply got rid of the Jewish bankers, then all the debts would be cancelled overnight. Germany would have no more crippling debts, no more interest to pay, and could therefore become a great power. Consequently, many then supported Hitler making him Fuehrer. Inflation impacted everyone in Germany; people were paid by the hour and rushed to pass money to loved ones so that it could be spent before its value meant it was worthless. Pensioners on fixed incomes suffered as pensions became worthless and the poor became even poorer. Businesses started to close down and unemployment suddenly soared. The economy was collapsing. The
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