German Hyperinflation Crisis
In 1923 Germany's economy collapsed into hyperinflation of catastrophic proportions, with the exchange rate of the mark to the US dollar reaching 4.2 trillion to one by November. The immediate trigger was the French and Belgian occupation of the Ruhr industrial region in January 1923, when Germany defaulted on reparations payments, prompting Berlin to sponsor passive resistance that required massive money-printing to fund. Middle-class savings accumulated over decades were wiped out within months; workers were paid twice daily and rushed to spend wages before prices rose again; wheelbarrows of banknotes became the currency of everyday life. The psychological trauma of watching savings evaporate radicalized Germany's middle classes, destroying their confidence in liberal democratic institutions and making them receptive to nationalist demagogues who blamed the catastrophe on Jews, Marxists, and the 'November criminals' of 1918. Gustav Stresemann's introduction of the Rentenmark in November 1923 stabilised the currency, but the social and political damage endured.
- Year: 1923 CE
- Category: Economic
