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I believe German reparations were shielded/unaffected from inflation. The allies were smarter then that. Germany did get a pause in reparations payments when hy
by rat87 5y ago
I believe German reparations were shielded/unaffected from inflation. The allies were smarter then that. Germany did get a pause in reparations payments when hyperinflation drove their economy to possible collapse which led to reparations being paused then cancelled. They paid 16% of the reparations agreed to. Then after WW2 they agreed to pay half of the rest.
German hyperinflation was useful for getting rid of internal debts that the government of Germany had borrowed from it's citizens during the war. It also led to collapse of pensions
- imtringued 5y agoUSD were gold backed. Paying USD debts is the same thing as letting gold flow out of the country. If you believe gold is everything, then simply by having less gold the German currency becomes worth less. If Germany has no gold then the currency becomes worthless (=$0).
- wahern 5y ago> I believe German reparations were shielded/unaffected from inflation It was all much more complicated than that. Hyperinflation wasn't intended as a simplistic way to repay reparations. It had a number of motivations. For one thing, Germany also had alot of private debt outstanding. And from the perspective of the exacerbated Allies, the most important motivation behind hyperinflation was to drive the Allies back to the negotiating table; which it did. Except the renegotiations proved a mixed bag for Germany, giving them enough breathing space to standup their economy (not long after hyperinflation, Germany had a surfeit of foreign investments), but nonetheless leaving the political albatross of reparations in place. The basic point is that Germany didn't naively step into hyperinflation. For the most part it was strategic and temporary--it only lasted a few years, after all.
- AniseAbyss 5y agoExcept pensions for the SS. They payed those until well into the 1990s.