Germany in the early 1920s was a desperate place when prosperity was spreading across the United States. The Allied victory in World War I had forced a tremendous financial burden on the new republic with France and England especially hard on Germany for war reparations. Eventually, the Germans couldn’t meet the ridiculous terms of payment and in order to settle financing obligations in gold, had to start printing – and print they did.
322% to 19,000% Inflation Per Month
The German currency was relatively stable at about 60 marks per U.S. dollar during the first half of 1921. But the “London ultimatum” in May 1921 demanded reparations in gold be paid in annual installments of 2 billion gold marks plus 26 percent of the value of Germany’s exports. The first payment was paid when due in August 1921. It all went downhill from there.
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