Hyperinflation Lesson starter: This is a picture of a man collecting his wages in Germany in 1923! But how long did he have to work to get that much money?

HyperinflationLesson starter:

This is a picture of a man collecting his wages in Germany in 1923! But how long did he have to

work to get that much money?

Today we will…

• Understand why hyperinflation occurred in Germany

• Identify the problems it created

• Understand the solution to hyperinflation

• As we know, Germany was forced to pay the allies £6.6. Billion pounds in goods or gold, this was called Reparations.

• In 1923 when Germany was late sending its payments the French and Belgians invaded a border area called The Ruhr.

• The French tried to force German workers to work for them, they refused and went on strike.

• The Ruhr Crisis left shortages in Germany this made prices rise (inflation)

• The Weimar Government printed off more money to try and help this

• This was disastrous for Germany

Ebert

1 US DOLLAR ($) Deutschemarks (DM)

1922 400

Feb 1923 7000

August 1923 1,000,000

November 1923 130,000,000,000

This table shows how much a US dollar could be purchased for in Germany

Observation skills

• You will see some pictures which show the effects of hyperinflation in Germany

• Write down what you see in each picture

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• A German story from 1923:• “ a man rushed out with a wheelbarrow to spend

his wages and left it outside a shop loaded with money. When he came back out the shop the wheelbarrow was gone and the wages had been dumped on the ground.

Effects of Hyperinflation• Savings and pensions became worthless• One German businessman saved for 20 years in

1913 he could have bought a mansion with his savings but by 1923 he had enough for a box of matches!. yet by 1923 only had enough

• Prices went up a few times a day so workers had to be paid twice a day and rushed out to spend their wages immediately

• People physically couldn’t carry enough money about to buy goods

• Shops began to refuse to take German money, many Germans had to barter (swap) goods

Who was to blame?• Imagine you were a

war veteran or war widow in 1923.

• Your set wage is now worthless and you are left with nothing

• How would you feel? Who would you hold responsible?

Vote for me and I will return Germany to a booming economy. We will be a financial superpower again.

How did Hyperinflation end?1. America gave

Germany loans through the Dawes Plan to rebuild their economy

2. The French left the Ruhr in 1924

3. A new currency, the Rentenmark, was introduced

Today we will…

• Understand why hyperinflation occurred in Germany

• Identify the problems it created

• Understand the solution to hyperinflation