The document discusses the hyperinflation experienced in Germany after World War 1. It began when Germany decided to fund the war entirely through borrowing rather than taxes. This put Germany deeply in debt to other countries. After losing the war, Germany was required to pay heavy reparations which it could not afford. This caused the value of the German mark to plummet rapidly as the government printed more currency. Eventually the mark was worth almost nothing and people's lifetime savings could only buy a cup of coffee. This hyperinflation devastated the country and contributed to the rise of Adolf Hitler.

1. The Nightmare German Inflation
One day everything was fine.
The next day hell was unleashed.
Julian Pendenza

2. INTRODUCTION

3. HOW IT BEGAN
• World War 1
• Bad Decision

4. CAUSE OF DEBT

5. INFLATION

6. MARK LOSING ALL IT’S VALUE

7. OUTCOME

8. QUESTIONS:
1. What was the reason that lead Germany to deciding to borrow money to pay for their war
expenses?
2. What countries did Germany owe money to after WWI?
3. Was the inflation beneficial for some German citizens, if so who?
4. Why did the value of Mark decreasing rapidly?
5. In your opinion, how did the Inflation lead to the uprising of Adolf Hitler

9. NOTES
• Before World War I Germany was well off country that was in good shape. The German Mark, the German currency at the time, was exchanged four or five to the dollar. That was in
1914. In 1923, at the worst moment of the German hyperinflation, the exchange rate between the dollar and the Mark was one tr illion Marks to one dollar, and a wheelbarrow full of
money would not even buy a newspaper. Most Germans were taken by surprise by the financial tornado.
• In order to pay the large costs of ww1, most countries, imposed its first income tax to pay for the war, but Germany, thinking the war was going to be short decided without opposition
to fund the war entirely by borrowing.
• the "London ultimatum" , payments that Germany were required to pay, in May 1921 demanded reparations in gold or foreign currency to be paid in an nual installments of
2,000,000,000 (2 billion) goldmarks plus 26 percent of the value of Germany's exports.
• The first payment was paid when due in June 1921 that was the beginning of an increasingly rapid devaluation of the Mark which fell to less than one third of a cent by November
1921 (approx. 330 Marks per US Dollar). The total reparations demanded was 132,000,000,000 (132 billion) goldmarks which was far more than the total German gold and foreign
exchange.
• Its easy to see why Germany was in such great debt
• The inflation was triggered by a huge increase in the nation's money supply, caused in part by the heavy demands of the repar ations placed upon Germany following its loss in World
War I. Soon an inflationary mentality set in. Merchants would raise prices automatically. People would hoard goods, figuring the price would go up, thus causing shortages. The vast
quantities of money were issued not only by the German central bank (The Reichsbank), but also by numerous communities, cities, states and companies, only compounded the
inflation.
• Imagine that after a lifelong of hard work and saving, you find that your lifesavings will not buy more than one cup of coffe e.
• Also at the time, the value of the mark just kept on decreasing by the day. The German government felt that it was in their best interest to print more notes, but it only made it
worse.
• Finally Germany decided to fix their financial situation by creating a new type of currency called the rentenmark and the inflation decrease a lot during the year 1924. Although the
inflation diminished, it was believe to be a cause for the power given to Adolf Hitler, but that’s a totally different subjec t.

10. BIBLIOGRAPHY
• http://www.history.ucsb.edu/faculty/marcuse/projects/currency.htm
• http://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic
• http://www.usagold.com/germannightmare.html
• http://www.joelscoins.com/exhibger2.htm