The german inflation too many claims to too few goods
This presentation is the property of its rightful owner.
Sponsored Links
1 / 9

The German Inflation: Too many claims to too few goods PowerPoint PPT Presentation


  • 102 Views
  • Uploaded on
  • Presentation posted in: General

The German Inflation: Too many claims to too few goods. The claims German labor…an 8-hour day German households…money holdings German rentiers …war bonds Victorious allies…reparations Disruptions to output Strikes … 8-hour day Altered borders  reorganized production

Download Presentation

The German Inflation: Too many claims to too few goods

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


The german inflation too many claims to too few goods

The German Inflation: Too many claims to too few goods

The claims

  • German labor…an 8-hour day

  • German households…money holdings

  • German rentiers…war bonds

  • Victorious allies…reparations

    Disruptions to output

  • Strikes … 8-hour day

  • Altered borders

     reorganized production

  • Reparations in kind


Jmk europe before the war

JMK: Europe Before the War

From being agricultural and mainly self-supporting, Germany transformed herself into a vast and complicated industrial machine, dependent for its working on the equipoise of many factors outside Germany as well as within. Only by operating this machine, continuously and at full blast, could she find occupation at home for her increasing population and the means of purchasing their subsistence from abroad. The German machine was like a top which to maintain its equilibrium must spin ever faster and faster.

…Round Germany as a central support the rest of the European economic system grouped itself, and on the prosperity and enterprise of Germany the prosperity of the rest of the Continent mainly depended. The increasing pace of Germany gave her neighbors an outlet for their products, in exchange for which the enterprise of the German merchant supplied them with their chief requirements at a low price.


Europe before the war the double bluff

Europe Before the War: The Double Bluff

Thus this remarkable system depended for its growth on a double bluff or deception. On the one hand the labouring classes accepted from ignorance or powerlessness, or were compelled, persuaded, or cajoled by custom, convention, authority, and the well-established order of society into accepting, a situation in which they could call their own very little of the cake that they and nature and the capitalists were co-operating to produce. And on the other hand the capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice.


Jmk the lenin dictum

JMK: The Lenin Dictum

  • Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. … they not only confiscate, but they confiscate arbitrarily… As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.


The german inflation milestones and stages

The German Inflation: Milestones and Stages

  • November 1918: Revolution…armistice

  • July 1919: Acceptance of Versailles Treaty

    • Sharp depreciation of the Mark

    • Export driven expansion…low unemployment

  • February 1920: Kapp Putsch suppressed

     Appreciation of Mark/Relative stabilization

  • May 1921: London Ultimatum

    … Assassination of Erzberger

     Sharp depreciation of mark…renewed inflation

    • Declining real wage…heightened conflict

      • Movement toward fiscal balance

  • July 1922: Assassination of Rathenau

    … withdrawal of J.P. Morgan loan

    … Reichsbank discounts commercial bills

    • Heightened inflation…wage-price instability

    • heightened unemployment

  • January 1923: Occupation of Ruhr

    …passive resistance

     Hyperinflation/halting stabilization

  • June 1923: Monetary chaos

  • December 1923: Stabilization crisis


The german inflation early stages

The German Inflation: Early Stages


German hyperinflation late stages

German Hyperinflation: Late Stages


German inflation deficits and interest

German Inflation: Deficits and Interest


Hyperinflation hall of fame

Hyperinflation Hall of Fame

Contemporary economists

  • Karl Helfferich – balance of payments/depreciation

  • John H. Williams, Jr. – “ “ “ “

  • John Maynard Keynes – quantity theory

  • CostantinoBresciani-Turroni – quantity theory

    Pre-Cagan commentators

  • Frank Graham – depreciation/quantity theory

  • Joan Robinson – Keynesian wage-price spiral

  • RagnarNurkse – depreciation/wage-price spiral

  • Laursen & Pedersen – “ “ “

    Cagan – Monetarist – Rational Expections

  • Phillip CaganThomas Sargent

  • Jacob FrenkelNeil Wallace

  • Rodney Jacobs

  • Mohsin Khan

    Economic historians/Volkswagen project

  • Gerald FeldmanStephen Webb

  • Karl-Ludwig Holtfrerich – rational inflation


  • Login