Ruhr and hyperinflation
The hyperinflation crisis explained:
The Weimar government's main crisis occurred in 1923 after the Germans missed a
reparations payment late in 1922. This set off a chain of events that included occupation,
hyperinflation and rebellions.
Ruhr invasion explained:
The French believed Germany could make the repayment but were choosing not to, in
response, France and Belgium sent troops into Germany’s main industrial area, the Ruhr
Valley. Their aim was to confiscate industrial goods as reparations payments as they didn’t
believe Germany was unable to pay the second instalment.
Ruhr invasion:
1. Why did France and Belgium invade the Ruhr region?
The action was provoked by German deficiencies in the coal and coke deliveries to France
required by the reparations agreement after World War I.
2. What was the German response to the occupation?
Germany could not respond with force as its military was too weak, so the German
government ordered workers to resist the occupation using passive resistance.
3. What economic steps did Germany take to deal with the occupation?
The Reichsbank, the German central bank, stopped monetizing government debt, and a
new means of exchange, the Rentenmark, was issued next to the Paper mark.
Hyperinflation:
4. What is inflation?
Inflation refers to a general rise in the level of prices. Its opposite is deflation, a general fall
in the price level. Inflation is when everything gets more expensive.
5. What is hyperinflation?
Hyperinflation is a term to describe rapid, excessive, and out-of-control general price
increases in an economy.
The hyperinflation crisis explained:
The Weimar government's main crisis occurred in 1923 after the Germans missed a
reparations payment late in 1922. This set off a chain of events that included occupation,
hyperinflation and rebellions.
Ruhr invasion explained:
The French believed Germany could make the repayment but were choosing not to, in
response, France and Belgium sent troops into Germany’s main industrial area, the Ruhr
Valley. Their aim was to confiscate industrial goods as reparations payments as they didn’t
believe Germany was unable to pay the second instalment.
Ruhr invasion:
1. Why did France and Belgium invade the Ruhr region?
The action was provoked by German deficiencies in the coal and coke deliveries to France
required by the reparations agreement after World War I.
2. What was the German response to the occupation?
Germany could not respond with force as its military was too weak, so the German
government ordered workers to resist the occupation using passive resistance.
3. What economic steps did Germany take to deal with the occupation?
The Reichsbank, the German central bank, stopped monetizing government debt, and a
new means of exchange, the Rentenmark, was issued next to the Paper mark.
Hyperinflation:
4. What is inflation?
Inflation refers to a general rise in the level of prices. Its opposite is deflation, a general fall
in the price level. Inflation is when everything gets more expensive.
5. What is hyperinflation?
Hyperinflation is a term to describe rapid, excessive, and out-of-control general price
increases in an economy.
