The World’s Most Famous Case Of Hyperinflation (Part 1)
The Great War ended on the 11th hour of November 11th, 1918, when the signed armistice came into effect.
Though this peace would signal the end of the war, it would also help lead to a series of further destruction: this time the destruction of wealth and savings.
The world’s most famous hyperinflation event, which took place in Germany from 1921 and 1924, was a financial calamity that led millions of people to have their savings erased.
Courtesy of: The Money Project
The Treaty of Versailles
Five years after the assassination of Archduke Franz Ferdinand, the Treaty of Versailles was signed, officially ending the state of war between Germany and the Allies.
The terms of the agreement, which were essentially forced upon Germany, made the country:
- Accept blame for the war
- Agree to pay £6.6 billion in reparations (equal to $442 billion in USD today)
- Forfeit territory in Europe as well as its colonies
- Forbid Germany to have submarines or an air force, as well as a limited army and navy
- Accept the Rhineland, a strategic area bordering France and other countries, to be fully demilitarized.
“I believe that the campaign for securing out of Germany the general costs of the war was one of the most serious acts of political unwisdom for which our statesmen have ever been responsible.”
– John Maynard Keynes, representative of the British Treasury
Keynes believed the sums being asked of Germany in reparations were many times more than it was possible for Germany to pay. He thought that this could create large amounts of instability with the global financial system.
The Catalysts
1. Germany had suspended the Mark’s convertibility into gold at the beginning of war.
This created two separate versions of the same currency:
Goldmark: The Goldmark refers to the version on the gold standard, with 2790 Mark equal to 1 kg of pure gold. This meant: 1 USD = 4 Goldmarks, £1 = 20.43 Goldmarks
Papiermark: The Papiermark refers to the version printed on paper. These were used to finance the war.
In fear that Germany would run the printing presses, the Allies specified that reparations must be paid in the Goldmarks and raw materials of equivalent value.
2. Heavy Debt
Even before reparations, Germany was already in significant debt. The country had borrowed heavily during the war with expectations that it would be won, leaving the losers repay the loans.
Adding together previous debts with the reparations, debt exceeded Germany’s GDP.
3. Inability to Pay
The burden of payments was high. The country’s economy had been damaged by the war, and the loss of Germany’s richest farmland (West Prussia) and the Saar coalfields did not help either.
Foreign speculators began to lose confidence in Germany’s ability to pay, and started betting against the Mark.
Foreign banks and businesses expected increasingly large amounts of German money in exchange for their own currency. It became very expensive for Germany to buy food and raw materials from other countries.
Germany began mass printing bank notes to buy foreign currency, which was in turn used to pay reparations.
4. Invasion of The Ruhr
After multiple defaults on payments of coal and timber, the Reparation Commission voted to occupy Germany’s most important industrial lands (The Ruhr) to enforce the payment of reparations.
French and Belgian troops invaded in January 1923 and began The Occupation of The Ruhr.
German authorities promoted the spirit of passive resistance, and told workers to “do nothing” to help the invaders. In other words, The Ruhr was in a general strike, and income from one of Germany’s most important industrial areas was gone.
On top of that, more and more banknotes had to be printed to pay striking workers.
Hyperinflation
Just two calendar years after the end of the war, the Papiermark was worth 10% of its original value. By the end of 1923, it took 1 trillion Papiermarks to buy a single Goldmark.
All cash savings had lost their value, and the prudent German middleclass savers were inexplicably punished.
Learn about the effects of German hyperinflation, how it was curtailed, and about other famous hyperinflations in Part 2 (released sometime the week of Jan 18-22, 2016).
Source: The Money Project via VisualCapitalist.com
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The GREAT WAR???? There's NO such thing.
ALL wars are EVIL. Period => http://wp.me/p4OZ4v-2e
or
Jesus & the Sword >> http://wp.me/p4OZ4v-3FW
seems like holding physical gold side stepped this destruction.
There's plenty of rope and lampposts to satisfy the over-glut of banksters and their ilk.
Got Balls?
All that need be gleaned from this piece is that the National Socialists - who rose from the depredations of the Weimar Republic - were justified in their condemnation and vilification of the international Jewish financiers. These world-conspirators brought about the great inflation and ruination of that country's economy. The same thing is happening today in the U.S. - slowly but surely. The ramifications have not yet been made manifest (with the dollar's priveleged "world currency" status), but it is nigh upon the horizon - and woe be upon those who do not see the counterfeit dollar's coming demise.
The weimar history stories are interesting, but INCOMPLETE. What happened afterwards?
I'll bet a lot of the war debt and reparations were cancelled. Even this story says germany printed marks and converted them to foreign currency to pay the debts. Yes, some german savers got screwed, but who really had anything after such a destructive war? Probably just a few rich fucks (ie MIC/criminals) and gov parasites.
My guess is germany benefited greatly from the hyperinflation, at the cost of a few so-called savers, who had ill gotten gains anyway.
If hyperinflation is such a good idea, why don't we try it out for ourselves?
Answer: we will and we won't like it either.
Tarabel, you've been right here on ZH thru the Greece problem. What happend there? Not hyperinflation, forced austerity.
At some point the banksters say no mas to financing socialism. The US can still balance the budget pretty easily. There is no need for a trillion $ military, trillion $ free health care, etc...
I believe "going Greece" is the future.
obviously if Greece is using the €uro for money then the €uro would have to hyperinflate for Greece to suffer a hyperinflation. Unless Greece left the €uro and went back to the Drachma. The chosenite bankers were never going to allow that, just like they wouldn't let the South secede in 1861. So the wealth of the Greek middle class is not being stolen through chosenite hyperinflation, but through chosenite blood rituals through the manipulation of their vampire-based credit money. Think of Greece as William of Norwich. No hyperinflation is neccessary to drain the goyim of their life blood.
Argument is a FAIL and a LIE.
Blood rituals??? WTF you talking 'bout? Greece CHOSE socialism and free shit for decades, then not paying their bills. Creditors said no mas.
I guess you are a socialist who thinks everything should be free.
MKKBY "The US can still balance the budget pretty easily. "
How can that be balanced? We are insolvent. The debt cannot ever be repaid. EVER.
It was never intended to be repaid. It was intended to be inflated away. But the politicians and bankers and their rulers got carried away with greed and now nearly every econoomy on the planet is insolvent. Fiat money must have expansion all the time to pay the ever increasing debt that it represents. Its a system of debt. It will never be repaid and the so called budget will never be balanced. This is collectivism at its finest. The waking hordes of pissed off citizens will have their voices heard or there will be civil war and world war.
Fail. I already explained how the budget can be EASILY balanced. Your "feelings" are not a counter argument.
Afterwards, Germany continued paying that 'debt' until October 3 of 2010.
http://www.spiegel.de/international/germany/legacy-of-versailles-germany...
The Great Inflation was caused by the Rothschild led private banking cabal. They gave themselves control of the German central bank after WW1 and used this to deliberately cause the Weimar hyperinflation. Hopefully Germany will someday make them pay for what they did because it was akin to genocide and was the driving force behind the anti-semitism that soon followed.
Anti-semitism was present before that even.
The members of the tribe were not loved in Europe for a very long time.
I believe it says something about you if you're perpetually vilified for over two millennia... But that's me.
I put this on another thread but here is a good video that outs the US and Israeli "Rothschild Zionist" organization behind all of these crimes. Quite fascinating in that is names the names of the folks in the administration in charge of carrying out the syndicate orders.
https://www.youtube.com/watch?v=ynPeru8qbV4
Thats right, how can you talk about this episode of HI and ignore the stab in the back by the Jewish bankers running the German banking system that caused Germany to lose the war. Or fail to mention that those same Jewish bankers are the ones who profited from the HI. Or mention the blocade in 1919 and the first German genocide through starvation by the anglo-zionists. Also, Germany had also been invaded by Poland in 1919 and was over run with eastern european ashkenazi vermin fleeing their bolschevic brethren.
That ashkenazi vermin originally went east from german lands. Being vermin they always look for better feeding ground but run away when there is hostility. That is because they are not native to the land and hold no allegiance to it or its people.
If one were to take a look at the 10 year chart for gold, one would find that it looks earily similar to the chart posted above for the years 1918-1920...... http://goldprice.org/gold-price-chart.html By the looks of things 2016 is the new 1920.
History may not repeat itself but it does rhyme
No need to panic. We have another two, maybe two and a half, years.
German never paid compensation for destruction done to Poland in WW2. It would be moer than 2-3 trillions of euro. This thing will return in the future...
Why don't you call on the Soviets to repay for decades of Communist rule?
Or is it because you can't browbeat Russians into giving a shit?
Germany lost the war not the Soviet Union.
Germany actually did pay some reparations to Poland. The street cars in many Polish cities were manufactured in East Germany and given to Poland.
Some time after the war Polish government forgave the remaining reparations...in the spirit of socialist brotherhood. ..or some crap like that.
No the Russians do not give a crap nor should they. Soviet Union is gone and the majority of psychopaths that did most of the harm were not Russian.
Stalin Georgian.the biggest one by far was Georgian.
By the time you publish Part II of Germany's Hyperinflation Saga, we may have our own saga in progress.
Debt must be repaid, and one way to "repay" it is with printed paper, or so thought the Weimar governments. It "works," but destroys the economy. Debt can be cancelled, bankrupting those holding the debt, and again destroying the economy.
How many years will it take to rebuild an economy after such events?
Or one can never repay the debt, and just keep increasing the debt, until the conditions explode. I suspect this scenario is ours, and I also suspect that the damage will be greater and last much longer than in the other two.
What is always left out is how they got wheelbarrows full of money out to the majority of the population enough to cause hyperinflation.
I have yet to see ANYONE explain how that could happen in this day and age.
Total BS!
The saying in the last depression was "there was plenty of everything but no one had any money to buy it". Thats our future BITCHES!!!
"there was plenty of everything but no one had any money to buy it"
Bernanke, the great counterfeiter, said that the FED would never repeat that mistake again. Look at all the debt slaves around now compared to the 30's. Nearly all of them will vote for free money.
Let those bitchez vote all they want. When SHTF, the fed will raise rates and support the dollar -- just like they are now.
The fed knows their entire franchise is based on the US dollar. They have a good thing going. They rule the world. They aren't gonna let it hyperinflate away to shit.
And they aren't gonna let their multi billionaire/trillionaire friends/ownerns get hyperinflated out of their king's stash.
Don't bet in US hyperinflation but hedge yourself just in case with some gold.
I disagree; they are getting ready to ditch the dollar, just as they ditched the Pound Sterling once they had a new host infected. They are all for hyperinflation -at the 'right' time; that is how you get actual, real assets for pennies of paper (or digital) fiat on the dollar. The final stage of the looting is getting private people to sell their gold, silver and other valueta in exchange for paper fiat with which to buy food. We will see a point of simultaneous inflation and deflation, as prices of necessities go up and the value of real or non consumable assets is forced down -a pawnbroker's market.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered" -Thos. Jefferson
Yeah, we have no choice but to outright default or inflate the debt, and future debt, away, I doubt that we'll outright default.
Blue, that narrative is getting old and makes NO SENSE.
Think about what you would do if you could print money. There is nothing you cannot buy. There is no need to play the hyperinflation/deflation game, because you already can have everything. All you would be doing is taking a risk that your game blows up in your face and somebody else comes out on top.
Lower slower, what you said is total bullshit.
It is still easy for the US to balance it's budget. There is really no need for a $ trillion military, a $ trillion in socialized health care, etc... This shit is all welfare. At some point austerity will be forced. You've already seen the playbook -- Greece.
I'll let your votes speak for who makes sense and who doesn't.
Fail. Feelings are not an argument, except of course for women.
You are so cute(!!!) sweetie. Now go to bed before your mommy catches you on the computer past your bed time.
The hyperinflation is baked into the fiat game from the very beginning. It ALWAYS reverts in value to Exactly what the paper it is printed on is worth. The 'money' in your pocket is backed by nothing but 'faith' that it will be accepted at (nearly) face value tomorrow. Eventually, they 2% (compounded yearly) that to death, which is when they look for a new, stronger host to infect; whilst pillaging the corpse of their previous victim.
It happens Every time fiat is used or coinage starts being debased. Sure, 'maybe' it won't here, 'maybe' this time it will be somehow 'different'... 'maybe' history has stopped, and we are in some new golden era of endless fiat... 'maybe' now that it is digital and they do not even have the hassle and expense of printing actual paper they will display some kind of fiscal restraint... Personally I won't bet on it. Within 10 years at the outside, your digital FRN 'dollars' won't be worth $.01010011 01001000 01001001 01010100 (yes, its binary.)
Fail. You described inflation, not HYPER inflation which is the subject of this article.
HYPER inflation HAS NOT happened every time fiat was used. If you are saying that then you are either ignorant of history or a liar.
And look at the shitstorm that's resulting from a mere 25 bps hike. If rates are brought up to a real level, it's lights out. The debt-deflationary vortex will swallow everyone, including those billionaire and trillionaire friends.
If you want to see current day equivalent take a look at the Belarus Ruble to US dollar exchange rate.
Everyone there is a millionaire. ...but that just means you have $100
Hyperinflation happens when people lose confidence in the currency , not when there is too much of it. The loss of confidence causes everyone to demand ridiculous prices for things. If you had a choice of USD vs Zimbabwean Dollars 10 years ago, and someone wanted to pay with the latter - you would be asking for a lot more than the exchange rate indicated. Same for Venezuela recently. This spirals up and out of control.
A debt that can't be repaid won't be repaid.
PNAC. Hundred year Phony War on Terror. Sounds familiar? Same group of Psychopathic Banksters perpetrating the exact same Rothchilds playbook. Arming, funding & training both sides of a Conflict indebting the Serfs to enrich the 1%.
"All Wars are Bankier Wars."
-Smeldly Butler.
+1. To add the Dulles brothers drafted the Versailles Treaty settlement knowing it would bankrupt Germany.
They would later become director of CIA and Secretary of State in the US.
Where do you guys come up with these ludicrous and utterly unfounded assertions?
So far as I know, John Foster Dulles was indeed a member of the American Reparations Delegation but, like all others in the American contingent, he urged leniency towards the beaten Germans and was outvoted by the rapacious Allies, who wanted to stick it to Germany.
"do you guys come up with these ludicrous and utterly unfounded assertions?
"
Spoken like a true narcissist.
she followed that with a perfectly modest 'so far as i know'
don't sound overly auto-amorous to me
Could we "coin" another word for narcissism. The narcissus is such a pretty flower and Narcissus' only crime was staring at himself in a pool of water. Suggestions?
Obama comes to mind.
I would suggest Obamia as a synonyme for narcissism.
Go back even further and add Edward Mandell House. A true spook.
House wanted to control more than Texas, House wanted to control the country. House would do so by becoming a king maker instead of a king. House learned by controlling two or three men in the Senate; two or three men in the House; and the President -- he could control the country. Edward saw his father, Thomas, become rich and avoid risk by hiring men to run the blockades while observing safely from shore. House would do the same in the political arena. He would find a candidate that he could influence. He would be instrumental in helping that candidate achieve office. He would influence the candidate from behind the scenes. The people would perceive one man was representing them, when in reality, an entirely different man was in control. House could influence that man to betray his constituents with no risk to himself. House had learned a great secret -- how to control a country. House didn't need to influence millions of people, he need only influence a handful of men. The less the people knew about him or what he was doing, the better off he was. House would profit from remaining in the shadows. House would help establish a secret society in America that would operate in the same fashion -- the Council on Foreign Relations.
In 1912, Woodrow Wilson (president of Princeton 1902-1910, governor of New Jersey 1911-13) ran as a Democrat in a three man presidential race. Howard Taft was the incumbent Republican. Former President Theodore Roosevelt ran on the Progressive party ticket. Wilson's main financial genius and support came from a group of directors of the House of Rockefeller's National City Bank including: Cleveland H. Dodge, J. Ogden Armour, James Stillman, and William Rockefeller. Otto Kahn, and Jacob Schiff of the House of Kuhn-Loeb & Co. provided additional financial support. The House of Morgan guided the Progressive campaign of Teddy Roosevelt. Morgan partner George Perkins provided Roosevelt with money, speeches, and men from Wall Street to help his campaign. The House of Morgan also gave money to the Wilson campaign. The republican vote was divided and Wilson was able to beat them both, won by a land slide, and became 28th President of the United States. After the election Wilson's financial backers provided him with their own agents to act as unofficial advisors. Among these advisors was a young lawyer named Felix Frankfurter. Frankfurter worked for the New York "establishment" law firm Hornblower, Byrne, Miller and Potter. Another adviser was Edward Mandell House. Without House, Wilson may never have become president. Wilson was nominated as Democratic candidate because of support from William Jennings Bryan. Colonel House obtained Bryan's support for Wilson. House became Wilson's closest unofficial advisor. The Round Table Group had four pet projects, a graduated income tax, a central bank, creation of a Central Intelligence Agency, and the League of Nations.
http://www.freedom-school.com/truth/house.htm
On May 30, 1919 House participated in a meeting in Paris, which laid the groundwork for establishment of the Council on Foreign Relations (CFR). Throughout 1919, House urged Wilson to work with Senator Henry Cabot Lodge to achieve ratification of the Versailles Treaty, but Wilson refused to deal with Lodge or any other senior Republican.
However, the conference revealed serious policy disagreements between Wilson and House. Even worse were personality conflicts. Wilson had become much more intolerant and systematically broke with one after another of his closest advisors. He would also later dismiss House's own son-in-law, Gordon Auchincloss, from the American peace commission when it became known the young man was making derogatory comments about the President.[12] In February 1919, House took his place on the Council of Ten where he negotiated compromises unacceptable to Wilson. In mid-March 1919, Wilson returned to Paris and lost confidence in House, relegating him to the sidelines. In fact, after they returned to the U.S. later in 1919, the two men never saw or spoke to each other again.[12]
https://en.wikipedia.org/wiki/Edward_M._House
I agree. Its precisely why Hitler wanted to eradicate the Jews