We all know that the rise of Hitler and Nazism in Germany after WWI was mainly due to the unfair terms in Treaty of Versailles. But do you know that rise of Nazism was also partially related to Economics, in particularly, an example of hyperinflation?
Unable to sustain the debt repayment to its creditor countries like France, the Weimar Government decided to be “creative” by turning on its money printing machine 24/7 to pay its creditors with more printed money.
With (much) more printed German Marks available in the Economy, the value of the currency plunged and lead to hyperinflation, a term used to describe a period of where price level increased tremendously.
Can you imagine a piece of bread costing 1 German Mark originally and costing 23,000 German Mark the following year (a horrible 23,000% increase)? And can you also imagine your lifetime savings in German Mark shrinking the same rate in any German Banks in a years time?
Germans gradually lost confidence of the Weimar Government due to their inability to solve hyperinflation, which causes erosion of the value of their currency, lost of their real value of savings and ultimately fall in standard of livings. Utterly disappointed and with the rise of the charismatic Hitler, this began to pave the path for rise of Nazism and World War II.
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