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The Weimar hyper inflation was caused primarily by reparations Germany had to make to France and the Weimar government's decision to pay those reparations by printing money.

This happened as follows: Germany didn't have the real resources to to pay. They were supposed to pay in either gold or foreign currency (can't remember which). So, Weimar says, no problem, I'll print some reichsmarks, go over to the exchange counter and get the gold or foreign currency I need and pay it to France. This worked once (sort of) but you know, fool me once shame on you, and France (and the markets) weren't stupid; next time Weimar tried this, everyone was on to this and no amount of reichmarks were enough to pay on exchange markets to pay the reparations, and hyperinflation was born while France occupied Germany to get its reparations in-kind.

All of this in the early 1920's, way before the Nazis.

The solution to the hyperinflation crisis also had nothing to do with the Nazis, though I think Schachtcwas involved. A new mark was introduced. This one pegged more or less to gold (reichmark wasn't ever since WW1) and circulation limited, so for awhile Germany had two currencies with a fluctuating exchange between the two.

No doubt savvy currency speculators made money during this time but saying they caused the inflation is like saying mice caused the crumbs on the floor. And no doubt it was harder to short sell the new marks, but only because there were less of them...you don't need to borrow from the central bank to short a currency... You just need to borrow it from someone, anyone.

This stuff you got here sounds like goldbuggism and pro-nazi propaganda...where did you get it?

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Fri Mar 22nd, 2013 at 05:03:27 AM EST
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Minor nitpick: the new Mark after the hyperinflation, the Rentenmark, was pegged to rents, not gold.
by Katrin on Fri Mar 22nd, 2013 at 05:24:11 AM EST
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thanks ETers for the info. i should have known...


'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Fri Mar 22nd, 2013 at 05:33:37 AM EST
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