Talk:Hyperinflation in the Weimar Republic

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Wiki Education Foundation-supported course assignment

This article is or was the subject of a Wiki Education Foundation-supported course assignment. Further details are available on the course page. Student editor(s): Brooklynsweney.

Above undated message substituted from Template:Dashboard.wikiedu.org assignment by PrimeBOT (talk) 00:08, 17 January 2022 (UTC)[reply]

Dawes Plan and Young Plan

I think that the Dawes Planand Young Plan should at least be mentioned in this page, since it did help the economic recovery in Germany to a certain extent. — Preceding unsigned comment added by User89243 (talk • contribs) 09:29, 31 May 2020 (UTC)[reply]


Milliard

I would suggest to change the description of the picture that shows the bank note; I am aware that milliard is a perfectly valid term for the number 1,000,000,000 (at least in GB), however, "billion" would be a lot more common in other parts of the anglosphere and on the internet. --Mr.Mister (talk) 18:07, 27 May 2009 (UTC)[reply]

Your objection is appropriate for the translation of the round medal caption where milliarden (plural of milliard) should be translated as billion, and I have done so. However, the words "over-stamped in red with a one milliard, ([long scale], so 1,000,000,000) mark" requires an exact quote from the note, followed by the translation. It should not say "over-stamped in red with one billion". Greensburger (talk) 21:02, 27 May 2009 (UTC)[reply]

LitwinP

A critical element to the root cause of inflation and hyperinflation in general that your article seems to have overlooked is the central bank and its main-staple appetite, i.e., printing phony money against no real assets to pay off governmental debt, and inundating our currency with this counterfeit money, which dilutes our money's buying power and conversely cause goods and services to increase in price. —Preceding unsigned comment added by Litwinp (talk • contribs) 18:57, 11 January 2010 (UTC)[reply]

Long term effects

Could the independence of the German Central Bank, the strong West German Mark and the German suspicions against Euro be linked to traumatic memories of the inflation? --Error (talk) 02:12, 21 January 2010 (UTC)[reply]

Cause

Amazing there is still confusion about this, Erich Remarque in his excellent book "the black Obelisk" clearly spells the main cause of the inflation. Businessmen would make out promissory notes to each other, take them to their bank for full payment, then the bank would take the notes to the German central bank for payment to them. 

No interest was charged, the notes were payable in 30, 60 or 90 days.

By which time the face value of the note was of trivial value. The government couldn't print money fast enough to meet the demands of the businessmen.

Clearly the printing of paper money came after the demand for it was created by this private creation of credit. 

When the rentenmark came out,  this practice was ended.

 This has relevance for the US,  during the 2008 crisis,  for the first time, I believe,

the FED allowed businesses other than member banks of the FED reserve system to access the discount window. 

Dodgy paper of all sorts were presented by General electric, AIG,  Goldman sachs, morgan stanley,

and god only knows who else. They got good hard cash for their flaky paper. 

Very little has been written about this.

When we have the next crisis,  I suspect all sorts of businesses will demand similar benefit.
A precedent has been made.

The FED is only now trying to unload this junk, there seems to be a news blackout as exactly how this is working out, and what the likely final cost to the bottom 99% of americans will be.

==

The "History" section says there's a perception that reparations were the cause of hyperinflation, and unhelpfully only says that this perception is misleading. Could a knowledgeable editor actually write a section about the fundamental and ongoing causes? Comet Tuttle (talk) 17:01, 12 April 2010 (UTC)[reply]

The cause of the inflation was the government's choice to print money to solve its problems, rather than taxing or borrowing. The Keynes quotation in the Importance section says exactly this. As far as a "knowledgeable editor" goes, try Dr. Sennholz's article for the Mises Instituted for further detail: [1]. --StringRay (talk) 14:02, 15 April 2010 (UTC)[reply]

I read the article by Dr. Sennholz very carefully, and I don't feel like it is a good explanation, or at least, it is far from complete. It claims that the cause was that almost all government revenues in the period from 1914 to 1923 were from selling debt to the central bank. However, the actual inflation experienced doesn't seem to track with that theory very well. In the first four years of the policy (ie, during the war, from 1914 to 1918) there was a drop in the value of the mark to 1/4 of it's value. However, over the ENTIRE nine years of the policy, there was a drop in the value of the mark to 1 trillionth of it's value. By simple division this implies that the yearly spending of the government in the 5 years AFTER the war was 250 BILLION times the yearly spending in the war years. This strains credulity to the breaking point. Worse, the vast majority of the hyperinflation took place in about 18 months in 1922 and 1923. The wikipedia article needs an explanation of WHY the hyperinflation occurred. — Preceding unsigned comment added by 74.38.236.157 (talk) 00:18, 31 May 2011 (UTC)[reply]

Yeah, this sentence makes no sense. "It is sometimes argued that Germany had to inflate its currency to pay the war reparations required under the Treaty of Versailles, but this is misleading, because the Reparations Commission required payment to be in gold marks or in foreign currency, not in the rapidly depreciating paper mark."

If the paper mark is losing value, then the fact that Germany had to pay its debts in gold or foreign currency does require it to print an ever increasing amount in order to pay off those debts220.191.53.137 (talk) 05:54, 27 March 2011 (UTC)[reply]

It is true that "the fact that Germany had to pay its debts in gold or foreign currency does require it to print an ever increasing amount in order to pay off those debts". But the point of the disputed sentence is to correct a common misunderstanding that Germany tried to pay reparations in rapidly depreciating paper marks. What they did was to try to buy foreign exchange with rapidly depreciating paper marks, which caused the paper mark to depreciate even faster. Greensburger (talk) 13:56, 27 March 2011 (UTC)[reply]

Yes, but the current sentence is much more confusing & misleading than the basically true and undisputed statement which it calls "misleading". Is there really such a common misunderstanding about directly paying reparations in rapidly depreciating marks? I don't think there is. Not being argumentative and weaselwordy in the text but just saying something like your last sentence just above would be a great improvement over the problematic quoted phrase, and more consistent with the rest of the article. Something like "Under the Treaty of Versailles, Germany had to pay reparations in gold marks or foreign currency, and the government's attempt to purchase the necessary foreign exchange with depreciating paper marks only made the marks depreciate faster."John Z (talk) 06:55, 18 November 2011 (UTC)[reply]

All the fault belongs to Germany?

This article does use sources that are considered reliable but economists cannot predict the economy and they have a hard time interpreting the economies of the past so it should be pointed out that the economists sited as references in this article are only guessing and that they do not actually truely know what caused the hyperinflation. Also it should be pointed out that there is alot of anti-german sentiment in the sources sited.

To a certain extent I would agree. The article organization has historical facts mixed in with traditional American and British views on the events. Like "zero stroke" being introduced in the History section. Such weasel sentences like "An attempt was made by Germany to buy foreign exchange with Marks backed by treasury bills and commercial debts, but that only increased the speed of devaluation" where opinions like this, that this event "increased the speed of devaluation", are pervasive. This, like you say, seems dubious and opinionated. I will reorganize and tag such sentences. Int21h (talk) 03:14, 12 July 2011 (UTC)[reply]

I supplied the needed reference for the sentence you objected to. Greensburger (talk) 05:55, 12 July 2011 (UTC)[reply]
Not so much that I object to them. They just need references that can be checked against, as the writing style mixes facts ("U.S. government reports currently cite 1 November 1955, as the commencement date of the 'Vietnam Conflict'") with opinions ("which was to protect Freedom") in the same sentence causes issues on many levels, which are not immediately clear without extreme examples like I have tried to give. In general, it is best to separate out the what are more likely facts ("An attempt was made by Germany to buy foreign exchange with Marks backed by treasury bills and commercial debts") from the opinion and/or analysis ("but that only increased the speed of devaluation") and give citations for both. It may not look as good, but in the end it makes it easier to spot what is opinion and analysis from what is fact, and to add contradicting or alternate interpretations of the events, which are likely to turn up. The citations are a start though. Int21h (talk) 08:50, 12 July 2011 (UTC)[reply]

The biggest "fault" was Germany refusing offers of loans in New York when the war started. They refused because the war would be over in 40 days or so.78.16.126.83 (talk) 18:38, 9 April 2015 (UTC)[reply]

What "offers of loans" were these? And who thought "the war would be over in 40 days or so"? Martinevans123 (talk) 18:45, 9 April 2015 (UTC)[reply]

Analysis

"Although reparations accounted for about one third of the German deficit from 1920 to 1923,[2] the government found reparations a convenient scapegoat. Other scapegoats included bankers and speculators (particularly foreign). The inflation reached its peak by November 1923 but ended when a new currency (the Rentenmark) was introduced. In order to make way for the new currency, banks "turned the marks over to junk dealers by the ton"[3] to be recycled as paper."

This part is obviously biased and should be rewritten. Someone with a more impartial and learned background should rewrite this section. Mr-Encyclopedia-Man (talk) 22:49, 4 September 2011 (UTC)[reply]

Yes, they should be removed, or at least separated, as I argued above. Though I can give one subject for which the Germans used the reparations, or alternatively the hyperinflation, as a scapegoat: the Emminger Decree. The Emminger Decree was, and I quote the source on this, "presented as an emergency, money-saving device in a period of acute financial stringency." (This was passed towards the peak of the crisis, on 4 January 1924.) But this is POV, because any good educated German can tell you (they likely would not get far with "disrespects authority" written in their evaluations) how bad jury trials were ("in perjury cases [they] tended to [give] objectively unfounded acquittals", for example). Keep the interpretations to a minimum, and properly attribute any such interpretations. Int21h (talk) 06:14, 27 June 2013 (UTC)[reply]

London ultimatum?

This article records a 'London ultimatum' of May 1921, but the article to which those words link has nothing to say on the subject. So is it true? — Preceding unsigned comment added by 88.97.11.54 (talk) 15:22, 26 June 2013 (UTC)[reply]

I have added a reference for the information (the likely source). Int21h (talk) 06:41, 27 June 2013 (UTC)[reply]

"further accelerated the decline" from 0.11 to 0.15?

What exactly does "the exchange rate of the Mark against the US dollar fell steadily throughout the war from 4.2 to 8.91 Marks per dollar. The Treaty of Versailles, further accelerated the decline in the value of the Mark, so that by the end of 1919 more than 6.7 paper Marks were required to buy one US dollar" mean?

8.91 Marks to 1 $ means 1 Mk = 0.112 $, while 6.7 Marks to 1 $ means it was valid 0.149 $. How is this a "decline"? — Preceding unsigned comment added by 59.41.252.226 (talk) 06:23, 23 March 2014 (UTC)[reply]

I looked up the actual reference page in the source, and nothing in it makes any reference to 6.7 Marks per dollar (which I honestly thought was a typo, given the statement's contradictory nature). I checked both pages 15 and 17, and there is no reference to the exchange rate on any of those pages. I'm going to change the source and number to another source I found for that time period. Blackbird_4 07:51, 28 January 2015 (UTC)[reply]
Just to add, here's the old source's pdf: "http://thirdparadigm.org/doc/45060880-When-Money-Dies.pdf", and the new source I'm using: "http://www.measuringworth.com/exchangeglobal/" Blackbird_4 08:01, 28 January 2015 (UTC)[reply]

"Hyperinflation"

It stand: During the first half of 1922, the Mark stabilized at about 320 Marks per Dollar. This was accompanied by international reparations conferences, including one in June 1922 organized by U.S. investment banker J. P. Morgan, Jr.[11] When these meetings produced no workable solution, the inflation changed to hyperinflation and the Mark fell to 800 Marks per Dollar by December 1922. The cost-of-living index was 41 in June 1922 and 685 in December, a 15-fold increase.

Here the cost increased 15 times, but rate went up only 2.5 times it also stand 8000 in https://en.wikipedia.org/wiki/Zero_stroke. I assume 8000 is correct. — Preceding unsigned comment added by AndersAustegard (talk • contribs) 21:15, 25 April 2015 (UTC)[reply]


Serious Omissions

As an economist who has worked in countries with very high inflation, I am interested in the problems that arise from inflation,how to run a food sector, how to run a business or farm, how to feed the people, in fact the problems that the people of the country face. I am not terribly interested in the cause of the inflation, as I cannot do anything about it. I am also interested in the effects of stopping the inflation, such as the string of famines that followed IMF World Bank restructuring. As the page stands, all that matters is the effect on banknote printers!AidWorker (talk) 10:22, 9 September 2016 (UTC)[reply]

Bibliography http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhyperinflation.html - this tells how much German money was worth in compression to other countries. it also says that there was an assignation of a minister that led to the slow moving way of doing anything for the inflation. https://mises.org/library/hyperinflation-germany-1914-1923 - gives more info on the background of the inflation this is all for my history class Brooklynsweney (talk) 17:49, 12 April 2018 (UTC)[reply]

Revaluation - comment

Under the "Revaluation" section, as of 18-jul-2020, the following paragraph was posted:

"So if there is a hyperinflation scenario again, many argue that the first thing to do is to go to your bank and settle your mortgage and clear any debts one may have, before the governments try to reinstate old debts at inflated values in newly issued currency. Government are allowed to indebt themselves then pay back those loans with devalued money, but the general public is not allowed to benefit from this."

There are multiple problems with this:

  • "Many argue ..." - I have never seen this argument, and I do not believe it is correct. At minimum this needs a citation
  • "reinstate old debts at inflated values" - in the case of 1920s Germany, the debts were reinstated at substantially below their original value, exactly the opposite of "inflated values in newly issued currency"
  • "the general public is not allowed to benefit from this" - generally debtors (the general public) do benefit. It may have been that in the case of Germany the public was not allowed to benefit to the same extent as the government. — Preceding unsigned comment added by Tbrill 013 (talk • contribs) 00:54, 27 July 2020 (UTC)[reply]

Causes

We should not baldly state that hard-cash reparations payments caused hyperinflation. The German government certainly claimed this was the case, but on the other hand virtually no hard-cash reparations payments were made for the entire period of hyper-inflation. Many popular histories include this claim without qualification, but expert histories (e.g., Sally Marks) always qualify it. Reparations obviously did contribute to German problems, but not necessarily in the direct way suggested in some histories. FOARP (talk) 09:08, 28 February 2024 (UTC)[reply]

hard "cash" or hard "money"

"This inflation continued into the post-war period, particularly when in August 1921 the German central bank began buying hard cash with paper currency at any price..." I understand hard cash includes "paper currency". So should the sentence say "hard MONEY" (gold)? Otherwise it reads as a tautology? (I'm not an expert. I'm just trying hard to understand a subject that it seems very hard to believe is not beeing needlessly complicated in order to sew confusion. The more I read on this, the less I know :-) ) SimonCharlesSmith (talk) 09:55, 25 April 2024 (UTC)[reply]

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