http://www.bbc.co.uk/schools/gcsebitesize/history/mwh/germany/crisis1923rev_print.shtml
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To put the severity of the hyperinflation that existed in Germany around 1923, this article used a few examples of just how bad the situation was. The hyperinflation directly resulted from the frivolous printing of money, while its value began to drop. The following is a list of a few of the outcomes that directly resulted from this:
- People collected their wages in suitcases
- One person, who left their suitcase unattended, found that a thief had stolen the suitcase but not the money (likely because the suitcase was worth much more than the money itself)
- One boy, who was sent to buy two bread buns, stopped to play football and by the time he got to the shop, the price had gone up, so he could only afford to buy one
- One father set out for Berlin to buy a pair of shoes. When he got there, he could only afford a cup of coffee and the bus fare home
- Many people affected by the hyperinflation, found it more efficient to burn the money for heat in their fireplaces rather than buying the wood to place into them, just because of the pure lack of value on the money
All of these examples, along with others that hindered any progress of the people in Germany around this time, show how severe hyperinflation. While not very common, hyperinflation is still a very important economic topic that should not be ignored. The more that people can learn from its effects throughout history, the less likely it is to happen in the future.
Do you think something that severe will ever happen again; could it happen again?? In today's world, i think people don't really understand how bad inflation is. I think inflation is not a solution to anything. If you really think about it, its just the idea of carrying around a lot more money that isn't any more valuable than what you already had.
ReplyDeleteThis kind of event could certainly happen again. In fact, in a way, it is. A similar hyperinflation has taken effect in Zimbabwe, and is arguably even worse. However, in a developed, first world country the the United States, Japan, Germany, etc., I doubt it.
DeleteI agree that hyperinflation is a major issue. Even just regular inflation is a problem! Not everyone quite grasps the idea that the more of something there is, the less valuable it is. When we print money, what we are really printing is slips of paper which just devalue allllll the other slips of paper in circulation. While printing money may be a short-term fix, as they thought it was in the Weimar Reupblic, it is not a sustainable solution for ensuring a strong economy.
ReplyDeleteOne has to wonder what goes through the government's head when they realize they are way too far down a slippery slope such as this. I can only imagine that it is something along the lines of "Oh shoot!". I sure would not want to live in the Weimar Republic!
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