5 ms·

Let's not forget that the hyperinflation of the Weimar Republic was, in large part, intentional. They printed money to pay the Versailles reparations, and to in

Let's not forget that the hyperinflation of the Weimar Republic was, in large part, intentional. They printed money to pay the Versailles reparations, and to inflate them away. Obviously it escalated out of control, but they weren't mere innocent victims of external events.

H8crilA 7y ago
Serious debt crises are always eventually handled by printing money. Or, more precisely, the crises keep on going till the authorities decide to print money. It is only a question of "when". This can happen in a variety of ways, for example in the Great Depression it was handled by devaluing the dollar against the gold (Executive Order 6102 and the follow ups), in 2008 it was handled by QE. There is such a thing as excessive money printing, though. See Ray Dalio's book "Principles for navigating big debt crises" which analyzes 48 debt crises across the world, a few of them in great detail and establishes a general framework of the way those play out.
roenxi 7y ago
In a sense all hyperinflations are voluntary because a key part of the dynamic is governments creating truly vast amount of new money. That being said, the Treaty of Versailles was said to be a pretty obviously punitive treaty. Famously quoted as a "Carthaginian peace" [0]. The Germans needed a party that would stand up and say they weren't going to try and honour the treaty. [0] https://en.wikipedia.org/wiki/Treaty_of_Versailles https://en.wikipedia.org/wiki/Treaty_of_Versailles
- NeedMoreTea 7y ago
  Certainly. It was the French, particularly Foch who insisted on punitive, and later claimed it was too lenient. Keynes wrote a famous book "On the Consequences of Peace" roundly criticising the settlement. Essentially Versailles set in train the events that led to WW2, Nazi party notwithstanding. Ironically toward the end of WW2, the Americans promoted the Morgenthau Plan that would have barred Germany from nearly all industry, putting them back to an agrarian age and made Versailles look relatively trivial. It almost certainly extended the war. Thankfully once it became widely known it was replaced with the Marshall Plan.
  - Fnoord 7y ago
    The German series "Babylon Berlin" [1] is a fictive series about the Weimar Republic before the Nazis got to power. Berlin Alexanderplatz is apparently also about Berlin the 1920s. It is from 1980, by famous director Rainer Werner Fassbinder. The entire miniseries is ~15,5 hours long. I have yet to see it before my death... [1] https://en.wikipedia.org/wiki/Babylon_Berlin https://en.wikipedia.org/wiki/Babylon_Berlin [2] https://en.wikipedia.org/wiki/Berlin_Alexanderplatz_(miniseries) https://en.wikipedia.org/wiki/Berlin_Alexanderplatz_(miniser...
    - sverige 7y ago
      Berlin Alexanderplatz is definitely worth the investment of time if you have any interest in modern German history and culture. Less time than "Breaking Bad" or "The Walking Dead."
      - FabHK 7y ago
        And Babylon Berlin is also well worth it - great mise-en-scène, recreation of the time and place (I think... wasn't there :-) and a captivating police/thriller/extortion/revolution story. And it introduces a bit of the political background (the rise of both the communists and the fascists and their assault on the republic), but not annoyingly so.
Fnoord 7y ago
Germany lost WWI and as part of the peace treaty Germany got the sole blame for it via Treaty of Versailles [1]. I learned at elementary school, if two have a fight, there's two to blame. Never one party. Though the reasoning might not be obvious; it could very well be obfuscated. [1] https://en.wikipedia.org/wiki/Treaty_of_Versailles https://en.wikipedia.org/wiki/Treaty_of_Versailles
- H8crilA 7y ago
  Luckily the WW2 fallout was handled more gracefully by both sides (no huge penalties imposed by the Allies, a full acknowledgement of the responsibility for the crimes by the Germans). And the world prospered.
scoobyyabbadoo 7y ago
>Let's not forget that the hyperinflation of the Weimar Republic was, in large part, intentional. They printed money to pay the Versailles reparations, and to inflate them away. Interestingly there's been a lot of talk of central banks in EU and US encouraging people to anticipate negative interest rates soon (actually these already happen in the EU even in strong economies like Germany). Also, back then you had the punitive Versailles treaty making Germans mad. Though perhaps a uniquely US phenomenon the same sort of bankers have been saddling large swaths of the Millennial generation with six-figure student loan debt that can't be forgiven. Don't get me wrong, my own debt just barely hits 5 figures and I do well for my family, we are saving for a house so I don't want inflation to eat our savings away, but I feel today's society caters to the sort of people that have six figure student loan debt (the emotional support animal generation) and so some type of mass loan forgiveness or massive inflation is inevitable. Coincidentally the social revolutions today are very similar to social innovations going on in the lead up to the rise of the NSDAP. However, I think the state has a lot more surveillance technology to crush any sort of resistance on that front.
greedo 7y ago
Weren't reparations specified in Gold marks to specifically address concerns of inflating away the debt?
- NeedMoreTea 7y ago
  They were specified in gold value, but payment was accepted in gold, cash, commodities, stock and bonds, and even manufactured goods I think. I think cash was only restricted fairly late on in the reparation payments - mid 1920s at a guess, i.e. after the hyperinflation.

H8crilA 7y ago

Serious debt crises are always eventually handled by printing money. Or, more precisely, the crises keep on going till the authorities decide to print money. It is only a question of "when". This can happen in a variety of ways, for example in the Great Depression it was handled by devaluing the dollar against the gold (Executive Order 6102 and the follow ups), in 2008 it was handled by QE. There is such a thing as excessive money printing, though. See Ray Dalio's book "Principles for navigating big debt crises" which analyzes 48 debt crises across the world, a few of them in great detail and establishes a general framework of the way those play out.

roenxi 7y ago

In a sense all hyperinflations are voluntary because a key part of the dynamic is governments creating truly vast amount of new money. That being said, the Treaty of Versailles was said to be a pretty obviously punitive treaty. Famously quoted as a "Carthaginian peace" [0]. The Germans needed a party that would stand up and say they weren't going to try and honour the treaty. [0] https://en.wikipedia.org/wiki/Treaty_of_Versailles https://en.wikipedia.org/wiki/Treaty_of_Versailles

NeedMoreTea 7y ago
Certainly. It was the French, particularly Foch who insisted on punitive, and later claimed it was too lenient. Keynes wrote a famous book "On the Consequences of Peace" roundly criticising the settlement. Essentially Versailles set in train the events that led to WW2, Nazi party notwithstanding. Ironically toward the end of WW2, the Americans promoted the Morgenthau Plan that would have barred Germany from nearly all industry, putting them back to an agrarian age and made Versailles look relatively trivial. It almost certainly extended the war. Thankfully once it became widely known it was replaced with the Marshall Plan.
- Fnoord 7y ago
  The German series "Babylon Berlin" [1] is a fictive series about the Weimar Republic before the Nazis got to power. Berlin Alexanderplatz is apparently also about Berlin the 1920s. It is from 1980, by famous director Rainer Werner Fassbinder. The entire miniseries is ~15,5 hours long. I have yet to see it before my death... [1] https://en.wikipedia.org/wiki/Babylon_Berlin https://en.wikipedia.org/wiki/Babylon_Berlin [2] https://en.wikipedia.org/wiki/Berlin_Alexanderplatz_(miniseries) https://en.wikipedia.org/wiki/Berlin_Alexanderplatz_(miniser...
  - sverige 7y ago
    Berlin Alexanderplatz is definitely worth the investment of time if you have any interest in modern German history and culture. Less time than "Breaking Bad" or "The Walking Dead."
    - FabHK 7y ago
      And Babylon Berlin is also well worth it - great mise-en-scène, recreation of the time and place (I think... wasn't there :-) and a captivating police/thriller/extortion/revolution story. And it introduces a bit of the political background (the rise of both the communists and the fascists and their assault on the republic), but not annoyingly so.

Fnoord 7y ago

Germany lost WWI and as part of the peace treaty Germany got the sole blame for it via Treaty of Versailles [1]. I learned at elementary school, if two have a fight, there's two to blame. Never one party. Though the reasoning might not be obvious; it could very well be obfuscated. [1] https://en.wikipedia.org/wiki/Treaty_of_Versailles https://en.wikipedia.org/wiki/Treaty_of_Versailles

H8crilA 7y ago
Luckily the WW2 fallout was handled more gracefully by both sides (no huge penalties imposed by the Allies, a full acknowledgement of the responsibility for the crimes by the Germans). And the world prospered.

scoobyyabbadoo 7y ago

>Let's not forget that the hyperinflation of the Weimar Republic was, in large part, intentional. They printed money to pay the Versailles reparations, and to inflate them away. Interestingly there's been a lot of talk of central banks in EU and US encouraging people to anticipate negative interest rates soon (actually these already happen in the EU even in strong economies like Germany). Also, back then you had the punitive Versailles treaty making Germans mad. Though perhaps a uniquely US phenomenon the same sort of bankers have been saddling large swaths of the Millennial generation with six-figure student loan debt that can't be forgiven. Don't get me wrong, my own debt just barely hits 5 figures and I do well for my family, we are saving for a house so I don't want inflation to eat our savings away, but I feel today's society caters to the sort of people that have six figure student loan debt (the emotional support animal generation) and so some type of mass loan forgiveness or massive inflation is inevitable. Coincidentally the social revolutions today are very similar to social innovations going on in the lead up to the rise of the NSDAP. However, I think the state has a lot more surveillance technology to crush any sort of resistance on that front.

greedo 7y ago

Weren't reparations specified in Gold marks to specifically address concerns of inflating away the debt?

NeedMoreTea 7y ago
They were specified in gold value, but payment was accepted in gold, cash, commodities, stock and bonds, and even manufactured goods I think. I think cash was only restricted fairly late on in the reparation payments - mid 1920s at a guess, i.e. after the hyperinflation.