The Starving Trillionaires of Germany By Darryl LeBeau Mech 3460 Engineering Economics April 22,2010 Introduction cerebrate you had trillions of dollars but were so poor you could not afford to expel? That is exactly what happened to Germany in the early 1920s. In less than tailfin years Germanys form of gold known as the Papiermark depreciated to one trillionth the value. This great tragedy was caused by a phenomenon known as hyper flash. This essay will rationalise some of the main causes and do of the worst case of hyperinflation that a modern industrialized sparing has ever experienced. Background forrader the outbreak of World War One, Germany was atomic number 63s dominating economic power and the cosmeas second largest exporter after the British Empire (Streb, 2006). Germany was at the top teacher of science and technology having more Nobel Prizes than all other nations feature (Nobelprize.com). Germany was so prosperous it was able to develop the worlds low social insurance program. At the fourth dimension the currency was known as the Goldmark and its value was tied promptly to the encumbrance of gold. 2790 Goldmarks equaled 1 kilogram of gold (Wikipedia). The German intention at this time was worth one quarter of a US dollar.
Germanys economy seemed unstoppable, what could go wrong? As struggle broke out across Europe Germany had to reckon a way to pay for it. Unlike France which just created its first income tax, the German disposal decided to borrow. They believed that Germany would be victorious and assume they could go the Western Allies p ay back their loans at wars end. The governm! ent decided to loan itself the money by simply imprint more money. The only way they could do this was by faux pas the link of their currency to gold. They suspended the Goldmark and created the Papiermark, which was printed in gigantic excess. This caused inflation and by wars end the Papiermark was worth only one-half of its current value (Fergusson, 1975). Eventually...
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