Wheelbarrows of Money

After reading my post about the “Depression Pocketbook,” my husband asked if I actually had any verifiable proof that anyone in Germany (or anywhere else) bought bread (or anything else) with a wheelbarrow full of money. It’s something we’ve both heard people say, but I must admit, I couldn’t quote a source.

Is it an urban legend? Is it something historians have invented because it sounds good? God knows when I was in school, I was told medieval people believed the world was flat. Not only was that never true (and there’s evidence from their maps and writings to prove it), but the idea can actually be traced back to a writer (I believe it was Nathaniel Hawthorne) who first used it in his popular biography of Christopher Columbus. It was taken for truth and repeated until it became reality and the truth became lost.

Is that what happened with the wheelbarrow-full-of-money story?

True Tales from Weimar

Figures showing the horrible hyperinflation in the Weimar Republic. (From SodaHead)

The story of hyperinflation in Germany during the Weimar Republic is easily verifiable. A bad economy coupled with an incompetent government was one of the reasons that Hitler was able to take over. (His first attempted takeover, the Beer Hall Putsch, was in 1923. But even though it failed, the National Socialists won a number of seats in the next election and even more in the following one. When he had enough people in power, he was able to take over rather easily.)

Paper Money by “Adam Smith” (George J.W. Goodman) has a few tales of people who lived through the Weimar hyperinflationary period:

“My father was a lawyer,” says Walter Levy, an internationally known German-born oil consultant in New York, “and he had taken out an insurance policy in 1903, and every month he had made the payments faithfully. It was a 20-year policy, and when it came due, he cashed it in and bought a single loaf of bread.”

The Berlin publisher Leopold Ullstein wrote that an American visitor tipped their cook one dollar. The family convened, and it was decided that a trust fund should be set up in a Berlin bank with the cook as beneficiary, the bank to administer and invest the dollar. [By 1923, one dollar was worth one trillion marks.]

Menus in cafes could not be revised quickly enough. A student at Freiburg University ordered a cup of coffee at a cafe. The price on the menu was 5,000 Marks. He had two cups. When the bill came, it was for 14,000 Marks. “If you want to save money,” he was told, “and you want two cups of coffee, you should order them both at the same time.”

A factory worker described payday, which was every day at 11:00 a.m.: “At 11:00 in the morning a siren sounded, and everybody gathered in the factory forecourt, where a five-ton lorry was drawn up loaded brimful with paper money. The chief cashier and his assistants climbed up on top. They read out names and just threw out bundles of notes. As soon as you had caught one you made a dash for the nearest shop and bought just anything that was going.”

Another quote about the situation, this time provided by Robert Blueman:

Melchior Palyi, a college instructor who saw his pay go from 10,000 marks per month to 10 million marks paid twice per day in less than two years’ time tells the story of how another professor asked him on the way out of their offices, “‘Are you taking the streetcar?’ he asked. ‘Yes,’ I said. ‘Let’s hurry. The fare will be raised by 6 pm. We may not be able to pay it.'”

So, while there was definitely a point where you would need a wheelbarrow full of money to buy a loaf of bread, did anyone actually do that?

Bartering and Denominations

The first little girl in line looks like she may be holding a brick of marks (see picture below of children playing with them) with something else--a trade item?--on top.

The first little girl in line looks like she may be holding a brick of marks (see picture below of children playing with them) with something else–a trade item?–on top.

Before I go any farther into my investigation, let me stop for a moment to note a couple of important things. One, physical goods were the only thing that had any real value. When people were paid, they made a run to stores not just to buy staples, like food, but to buy anything they could get. I came across one story of a woman buying all the bedpans in one store, because that was all that was left. She didn’t need a bunch of beadpans, but somewhere, someone surely needed them. Having bought them, it would then be her task to hock the bedpans to her neighbors, at a hospital, or just to strangers on the street. People who needed them would trade  food or clothing or anything else that was needed.

It was a good thing most women didn’t work, because converting a brick of money into something that was actually useful could be its own full-time job.

The German mint had to run continuously to print enough money everyday. They stopped printing the backs of the money to save time. (The same thing happened with Confederate currency during the latter part of the Civil War.)

The other thing I wanted to point out is that the German government was constantly making new denominations of money. If it cost 14,000 marks to buy two cups of coffee, and all you have are 1 mark notes, you really would need to push around a wheelbarrow full of money for every. single. purchase.  So, to combat that, the government started issuing new denominations. So yesterday you might have had to carry around 14,000 one-mark notes to pay for your coffee break, but today the government has issued 10,000-mark notes, so it only takes two notes to pay for your coffee.

Of course, when inflation rises again, and your two cups of coffee costs 140,000 marks, you’re right back in the same boat: you would need 140 10,000-mark notes to pay for coffee. So the government issues 100,000-mark notes. And so on.

Meanwhile, a single-mark note no longer has any real value because it would take a lot more than wheelbarrow to cart around 140,000 one-mark notes. That’s when you start to see people doing some pretty strange things with their money.

101 Uses for Useless Money

burningmarxforheatOne common claim from this period was that people burned their marks because they were cheaper (and easier to get) than wood or coal. I found at least two pictures that seemed to support that claim.

Another commonly-stated “use” for the money, was as wallpaper. I found a couple of different pictures that seem to support that as well.

I found no less than four images which purport to be German children playing with worthless marks, so that also appears to be a true story.


German children make a kite from marks.

But what about those elusive wheelbarrows?

When Times Get Tough, Break Out the Satire

I got a bit of  a break in this cold (hard cash) case . The history department at the University of California, Santa Barbara, said, “Cartoons of the time depicted people with wheelbarrows full of money who could not buy a loaf of bread.”

Another website said, “There was an old joke that if you left a wheelbarrow full of money sitting around in the Weimar Republic, thieves would take the wheelbarrow and they would leave the money behind.”

So, whether or not people were actually using wheelbarrows to transport money, it seems that the origin of the idea is at least contemporary.

Baskets and Bags of Cash

German-hyperinflation-300x216Then I found a picture that looks like a woman buying vegetables with a basketful of money. And I also found a picture of German bankers (1923) carrying money in suitcases slung across their backs.

We’re getting closer!

Inflation and the Death of a Currency

You may be wondering how we got to this point in the first place. Why would it conceivably take a wheelbarrow of money to buy a loaf of bread? And why did it keep getting worse?

When you get right down to it, what value does a small rectangle of fabric with some ink on it really have? Unlike gold or silver, it can’t be changed into jewelry or something useful, like silverware. Unlike food, it can’t be eaten. Unlike gasoline, it can’t fuel a car or heavy equipment. Unlike a computer or bicycle, it’s not useful. And given its small size, and relative to the price of a bolt of cotton/linen blend fabric, it wouldn’t even make good clothing.

When paper money (I use the term “paper” loosely; dollar bills are

Das Archivbild von 1923 zeigt das Abwiegen der Geldscheine, die während der Inflation nur noch Makulatur waren. Geldscheine waren zur Zeit der großen Inflation von 1919 bis 1923 kaum mehr Wert als Papier. Ein Liter Milch kostete 26 Milliarden Mark, für Brot mußten die Menschen 105 Milliarden Mark zusammentragen. Erst mit Einführung der Rentenmark am 16.11.1923 schöpften die verarmten Menschen wieder Vertrauen in den Wert des Geldes. dpa (zu dpa-Korr: "Vor 75 Jahren - Wunder der Rentenmark beendet Jahre der Inflation" vom 12.11.1998)   nur s/w

Stores, like this one, resorted to weighing people’s money rather than counting it.

actually made from a cotton/linen blend) is not fully backed by something real (like gold or silver), it functions as a trade item only because people believe in it. My boss can pay me for my labor in dollar bills because I have every confidence that I can take those same dollar bills to the grocery story and get a pizza, a Redbox movie, and an unintentionally-hilarious Nora Robert novel. But if I was afraid that by the time I got to the grocery store, my paycheck wouldn’t even rent me a movie, I’d insist she either give me a lot more dollars, or pay me in something useful, like food and gasoline and clothing.

What causes the system to break? Why do people lose confidence in their currency? Old Picture of the Day actually explains how inflation (using Weimar as an example) works:

Germany has a bushel of wheat. If it used the bushel of wheat to pay a creditor nation [Germany owed millions of dollars in war reparations post-WWI], it would have no food to feed its people. If it used it to feed its people, it would default on its national debt. So, it decided to print 10 marks. Five of the marks were sent help pay the national debt (monetization of debt), and five was injected into the economy to try and spur economic activity (stimulus, or quantitative easing).

Also, remember, that somewhere out in Germany was a person with 5 marks that could have used it to buy the bushel of wheat to begin with. Now, this is what happens. That country that received the 5 marks wants something tangible for the 5 marks, so it tries to buy the bushel of wheat from Germany. The person that got the 5 marks through the stimulus program wants to buy the bushel of wheat, and the original person who had 5 marks to begin with wants to buy the bushel of wheat. Notice that even though there is now 15 marks, there is still only ONE bushel of wheat. The person who originally had 5 marks, the saver, finds that he is facing stiff competition for the purchase of the wheat. He finds that his 5 marks will no longer buy the wheat [because the farmer sells to the highest bidder, and someone else may offer 10 marks for it]. The creditor nation that was paid 5 marks finds it was not a very good deal, because it is not enough to buy the bushel of wheat. The person who received the 5 marks through the stimulus program also finds that it will not buy the bushel of wheat. So, in the end, pretty much everyone loses.

So, to continue this example, let’s say the farmer decides to charge 10 marks for his wheat and a miller buys it. The miller then grinds it up and charges twice as much for the bag of flour as he did before because the price of wheat has doubled and he needs to be sure that, at the end of the day, he has enough profit leftover to go back to the farmer and buy some more wheat.

Then along comes a baker, who buys the flour and has to turn around and charge double for a loaf of bread. Now the worker who is on his way to work can’t buy a loaf for lunch, so he demands his employer pay him more. And the farmer who got double the usual price for wheat finds that everything else has doubled as well, so he’s not really any richer than he was yesterday.

Then the government prints out additional money, there’s a bidding-war for commodities, which pushes up the price, and things start all over again.

Which brings us back, once again, to the wheelbarrow.

Wheelbarrows of Cash

I did find two pictures of wheelbarrows full of money that are supposedly from the Weimar Republic.

This image is from The Washington Post (where they also write that Germans were shopping with wheelbarrows full of cash). But one website with a copy of the image says that it’s a banker wheeling money out to his tellers before the start of business, so it doesn’t quite fulfill our hunt for the elusive wheelbarrow-full-of-money-for-shopping.

That’s “Fiest National Bank” on the sign. It does appear to be the name of a bank in Germany.

This tiny picture of an elderly couple in front of a bank with a wheelbarrow is all over the internet as being from the Weimar Republic, too. It’s not shopping, but obviously they were having to cart large sums of money around town–at least to the bank.


A basketful of money being taken to market in Zimbabwe.

I should point out, though, that hyperinflation didn’t only occur in Germany; there have been many outbreaks, even here in America (albeit back in the 18th century).

Vendors in Zimbabwe taking in huge stacks of money (but no one shopping specifically via wheelbarrow).

Add “wiping your ass” to the list of things you can do with useless money. (But you can only flush it at home.)

Don’t worry, guys, I’ve got the tip covered.

The most recent case–and one you might have seen on television–is Zimbabwe. Like Germany, new denominations of notes kept getting printed until they literally ran out of space to put zeros. Entirely new notes were issued, but the government didn’t stop printing too much and the people never gained confidence in it, so the new notes ran up just like the old ones.

Hello, wheelbarrow!

The multi-purpose wheelbarrow allows you to cart your pregnant wife to the nearest clinic while she rides in comfort on the stack of money that will pay for the doctor.

The fourth incarnation of the Zimbabwean one dollar bill was worth 10 trillion trillion original Zimbabwean dollars.


This was labeled as being from Somalia, but I don’t recall hearing about a crash of their currency. I bet it’s really from Zimbabwe.


So, my answer to the question, “Did people actually shop with wheelbarrows full of cash in Germany?” is: maybe.

The inflation rate became so horrible in Germany between 1919 and 1923 that yes, it would have required a wheelbarrow (and later an entire truckload) of small-denomination bills to buy a loaf of bread. (One woman commented on a blog that her mother had lived through the Weimar Republic period, and she had said that wives would go to their husband’s job with wheelbarrows, pick up their daily pay, then hurry into town to buy whatever they could.) Yes, people burned their small denominations, papered their walls with it, and let their kids play with it.

But, as for actually paying someone with a wheelbarrow full of money in Germany, I couldn’t find any pictorial evidence.

All I can say is get that man a wheelbarrow!

What was probably most common is that when denominations became too small to be useful, people took their wheelbarrows full of money to the the bank, cashed them in on larger notes, then took those larger notes shopping. But one website said that many banks closed up around 11:00 AM and some employees went on strike because of the huge lines of people, so in some cases, it may not have been possible for people to cash in their small bills for larger ones. And that’s when you end up going to the store with so much cash, they have to weigh it rather than count it.

As for wheelbarrows of cash in Zimbabwe, I think I’m going to have to say that yes, that definitely happened there. Those wheelbarrows piled high with cash in the public thoroughfare aren’t there for decoration, and money is really not your first opti0n for seat cushioning.


So what happened to the German currency? It took a while, but eventually the government realized that hey,

this inflation thing isn’t good (duh!), and they ended up issuing an entirely new note (the Rentenmark) with a face value of 1 and they said one Rentenmark is equal to one billion old marks. The government did its part by not printing too many, and the people did their part by

believing in it.

“I remember,” said one Frau Barten of East Prussia, “the feeling of having just one Rentenmark to spend. I bought a small tin bread bin. Just to buy something that had a price tag for one Mark was so exciting.”

All money is a matter of belief. Credit derives from Latin, credere, “to believe.” Belief was there, the factories functioned, the farmers delivered their produce. The Central Bank kept the belief alive when it would not let even the government borrow further. (from Paper Money by “Adam Smith,” (George J.W. Goodman))

In a way, it was like the country went bankrupt. The government wiped out the old money and started from scratch, just like debtors wipe out their old debts in bankruptcy and start with a clean slate. Unfortunately, it was like every single person in the country also went through bankruptcy. All savings and investments were in the old currency, so they just vanished. Debts, too, vanished,

and while that may sound like a good thing for the person who is in debt, it’s a bad thing for the people who lent money and expected it to come back (it was an investment for the lender).

With the currency went many of the lifetime plans of average citizens. It was the custom for the bride to bring some money to a marriage; many marriages were called off. Widows dependent on insurance found themselves destitute. People who had worked a lifetime found that their pensions would not buy one cup of coffee.

[A]lthough the country functioned again, the savings were never restored, nor were the values of hard work and decency that had accompanied the savings. There was a different temper in the country, a temper that Hitler would later exploit with diabolical talent. Thomas Mann wrote: “The market woman who without batting an eyelash demanded 100 million for an egg lost the capacity for surprise. And nothing that has happened since has been insane or cruel enough to surprise her.” (from Paper Money by “Adam Smith,” (George J.W. Goodman))

Germans lost confidence in their government thanks to the hyperinflation debacle and eventually turned to Nazism as the answer to their problems.

Just six years after their currency finally stabilized, the stock market crashed and America was plunged into the Great Depression. When Herbert Hoover was not seen to be doing enough to ease the hardship on Americans, he was replaced by FDR, who promised social reforms. Blending socialist ideas (like minimum wage, unemployment pay, and social security) with the capitalistic democracy that already existed appeased the people and possibly saved us from a revolution or fascist takeover, as happened in Russia, Germany, and Italy.

Instead, the American people retained their confidence in the government, and when the government called on them to fight a war in Europe and stop driving their cars and stop taking trips and use ration coupons and grow victory gardens and go without pantyhose and rubber tires and a myriad of other things, they did so, and thus earned the nickname, “The Greatest Generation.”

As for Zimbabwe, in 2012 the people ended up giving up on their currency all together and the government quit printing it. As of today (6/1/13), there is still no national currency in Zimbabwe; people either barter or use foreign money (like U.S. dollars). (From Wikipedia)

Just to add insult to injury, a cholera epidemic struck Zimbabwe and many wheelbarrows were put into use transporting the sick.

26 comments on “Wheelbarrows of Money

  1. This is fascinating. I studied some of this period at school but never in a way that made me understand it like this article. Through your search for a wheelbarrow you’ve covered a whole term of my A Level studies! Thank you

    • Keri Peardon says:

      Glad you liked it.

      I’m up for suggestions if anyone wants help understanding other parts of history. Or if they want to give me a historical “Myth Busters” research challenge.

  2. I didn’t have time to read this when you first posted it, Keri, but I’m so glad I came back. I’ve known some of this, but not nearly to the extent you shared. Great research. One of the reasons I continue to collect books is, of course, to hopefully read them one day, but also because they are awesome barter material if an economy suffers and there is no expendable money for entertainment. When the Argentina economy collapsed in 2001, most people said they wished they had more food stored up, and books were on the list of highly bartered items.

    • Keri Peardon says:

      How-to books are probably going to be worth their weight in gold if there’s ever an economic collapse, trade embargo, or social unrest. That’s why I have the full set of “Foxfire” books and have started collecting books on gardening, wild plant foods, and herbal medicines. We can survive using just the information in those books.

      My dad said he wanted to print off and bind the full wealth of articles from Texas A&M that identifies common diseases, fungi, and insects that ruin your garden crops and tells you how to combat them (a garden’s not helpful if you can’t get food from it). Books on how to repair everything from clothes and shoes to small appliances and cars will also be valuable if goods ever became too expensive or rare to replace. (If China were to cut off all trade with us, you’d see that happen overnight.)

      • Gail Combs says:

        Check with your ag extension office. Many times they have very useful pamphlets or know where to get more information.

        Great Article BTW. I just posted a link to a blog discussing the Fed printing money here in the USA

  3. Andrew Thompson says:

    Dam good Artical about that time period in Germany… You should turn it into a Book… It would be a best seller.. Dam good pictures too..

  4. Fernando Ortega says:

    Hello. I stumbled upon this article while I was researching another aspect of the Weimar hyperinflation period: specific cases of precious metals use during that time that expose the alleged advantages a PM holder has under such conditions, specifically the incredible increase in buying power. What prompted me to research this subject is a tale I have seen reproduced in several websites in which at the height of the hyperinflation, someone was able to buy a whole block of downtown Berlin prime real estate for 25 gold ounces..
    While I hold no doubts that a PM holder fared far better than a fiat currency holder in that period, the question seems to be if gold was so superior to other hard assets to allow such a exchange.
    Thank you for your work, it was very informative and entertaining.

    • Keri Peardon says:

      I would think so. The list showing how much money to an ounce of gold gives you an idea of how valuable gold was (or how worthless the money; depends on how you look at it). And the story of the woman who was tipped one American dollar–an event that required the family’s input and a decision to carefully invest it–shows how much value things other than Weimar marks had.

      Of course, in the absence of real shortage, things don’t really get more expensive during hyperinflation. If your cup of coffee costs 5 marks today and 10 tomorrow, that’s okay, because your salary also doubled overnight; the cost of coffee is relative. Only in the case of a shortage of coffee would its price rise faster than your wages.

      So, under that premise, the price of real estate should have also matched inflation, so that it stayed relatively the same as it always had been. If it once cost one million marks to buy, and that was the equivalent of 3 pounds of gold, then with hyperinflation, it might take two million marks to equal three pounds of gold, and the real estate should cost two million pounds; its real price is tied to the gold rather than the currency.

      But, during a Depression, a lot of things lose real value. In America, for instance, wages went down. The cost to see a movie also went down. In the case of wages, an over-abundance of workers meant employers could pay less; if you didn’t want to work for that wage, someone else would. With a lot of people unemployed or working for less, they couldn’t afford to buy things like they used to. So, if you wanted to sell a movie (or anything else), you had to lower the price to something people could afford.

      Housing prices also went down in America because the banks repossessed so many. Like our modern Great Recession, a glut of houses caused the prices to fall. A lot of businesses went out of business, too, which meant that commercial real estate also took a hit.

      I’m not familiar with the full effects of the German Depression, but it’s quite likely the same thing happened there. You have four factors at work: one, who wants to live in Germany during this period? If people are selling off and fleeing to other countries, that can cause the price of real estate to drop. Two, that once-prime block of real estate may now consist of mostly empty buildings–say, in a financial district–where the businesses have closed up shop. That can depress the real estate value further. Three, no one whose money was in marks can invest in anything because this million dollars you have today may only buy you a cup of coffee and a newspaper tomorrow; you have to spend your money just trying to survive. So, as an outside investor, you would have no competition. Four, the price of gold (and even other currencies) may have been artificially high simply because German people put a lot of value in it. Their German mark was so crappy and untrustworthy, they’d be willing to part with a lot just to get some gold or a stable currency that will still have the same value tomorrow that it has today. Even if you pay too much for it, you can at least be confident that it will have a set value tomorrow. And for people who are seeing their life savings and other investments vanish before their eyes, they want the gold.

    • I can ensure you that gold and silver are money.

      Look up ‘Dutch Hungerwinter’ in Wikipedia, you will understand.

      I was 10 years of age.

      The bread ration was 1 pound per WEEK.

      People in cities were starving and went to farms with bed and table linen to exchange for something to eat.

      That lasted about a week and farmers were loaded up with all kinds of goods.

      So they took only gold, silver, rare stamps and collector coins.

      As an aside: after the German hyperinflation many men still wore cardboard collars because they did not want to throw them away.

      And in France, a creditor nation, there was social unrest because the money from Germany bought nothing and Germany had to send young people to France to work for little.

      But that created unemployment for French workers so the inflation had unexpected and unwanted side effects in other countries.

  5. Jay says:

    It was Washington Irving who popularized the notion that the medieval world believed the earth was flat. Not Nathaniel Hawthorne. I’m not trying to nitpick, because I agree with your larger points, I just hoped someone might find it interesting.

    Yes, monks and scholars and literate people knew the earth was a globe throughout the middle ages. There are a number of people that often demonize the past in order to glorify their own culture by a false comparison.

  6. Reblogged this on Alexander Riccio and commented:
    The idea of just “printing money” to pay off the US Federal government debt is back in the news. Here’s a reminder of what that entails.

  7. Great pictures! This NPR audio only story that got me researching for the wheelbarrow full of cash which led me to this site.
    I always thought of Bitcoin as of a pseudo-currency that only criminals use. But when a government’s currency becomes worthless bitcoin could find it’s self as welcome alternative.

    Keep up the great work!
    Bobby Gallagher

    • Keri Peardon says:

      Bitcoin is certainly a curious creature. It’s been really unstable, but now that more places are starting to accept it as legitimate currency, it’s starting to stabilize. One thing in its favor is, since it’s not part of any particular government, it’s not subject to the abuses of politics, like quantitative easing (i.e. printing more money) or keeping the value artificially low in order to manipulate trade (e.g. China). It can’t, in theory, be subject to inflation, since there’s no way to artificially manipulate it. That means it could, in the future, be a value benchmark (the way the dollar is today).

      The thing going against it is that it has no precious metal backing, and since there is no government backing it (like everywhere else in the world that has no precious metal standard), there’s no reason to be confident that it will still exist next year, much less 10 or 100 years from now. Not exactly the sort of thing you want to be investing your life savings into. After all, look what happened to the Wiemar Germans (and the people of the South who invested in Confederate dollars, etc.) This is the reason why Bitcoin’s value has been so volatile. However, the longer it’s around, the more people will grow confident in it, which is why it’s starting to stabilize and gain legitimacy.

      The other drawback that I see in Bitcoin is that there is (to the best of my knowledge) no tangible currency–no dollar bills or coins. For Millennials and Generation Z, this means nothing since they probably rarely handle cash anyway; money is just a number on a bank statement and you just exchange numbers with someone else when you buy online or with a mobile app. Even paying with a debit or credit card comes down to your bank sending the merchant’s bank some of your numbers. And I admit that I rarely carry cash and I live by my debit card. But I like knowing that I can pull physical money out of the bank any time I want and stick it into a coffee can and bury it in an undisclosed location in my yard. Or I can use it to buy gold, which I can then bury in a coffee can in an undisclosed location in my yard.

      During my formative teen years, I read Margaret Atwood’s The Handmaid’s Tale, and one of the things that I took away from that book is that since there was no physical money in that future America, it was really easy for the government, in a “time of crisis,” to freeze the flow of money and seize bank accounts. There was no physical form of currency for people to fall back on.

      That’s always made me leery of the idea of 100% non-tangible currency: it’s too easy for someone else to seize control of it (whether that’s a government or a hacker).

  8. John says:

    You state beneath a photo that the “Fiest National Bank” is in Germany ! It is in fact the First National Bank” and is in the USA. It would read “Zuerst” for “Fiest or First” if it was German.

  9. Ms. Peardon, thanks so much for this post! I just cited it in my own blog: “The non-fiat money that stopped Hitler (almost)” https://medium.com/@WilliamFreedman/the-non-fiat-money-that-stopped-hitler-almost-1569f1f99a47

  10. Hestal says:

    I think that the victorious Allies anticipated that the Germans might print money to pay off the debt so they wrote the treaty to say the Germans could only use non-German currency or gold as payment.
    Plus this whole story here is upside down. Hyperinflation is the result of government failure, never the cause. The Weimar Republic collapsed because it could not meet the terms of the treaty and it could not feed its people so it desperately tried to print money. Paul Krugman in the past week chastised Michael Bloomberg for saying that printing money caused the disaster in Venezuela. Krugman went on to say that anyone who used Valenzuela as a tool to win an argument should be kicked out of the discussion. And J M Keynes resigned from the British team at Versailles and wrote a worldwide best seller called, “The Economic Consequences of the Peace” in which he said that the German people would be impoverished and would create an entire generation of German youth who would hate the allies and want revenge. This story about printing money would lead to government is nonsense.

    • Keri Peardon says:

      I agree with you in part, and disagree in part. (That sounds like I’m responding to a legal Complaint.)

      I agree that healthy governments don’t wind up in hyperinflation situations (at least none that I know of have); over-printing money is a desperate measure engaged in by governments that are in real trouble. However, all governments that have unchecked hyperinflation fall, whereas governments that are troubled but don’t resort to hyperinflation may survive. In other words, hyperinflation causes *troubled* governments to fail.

      Venezuela’s problems began with price-fixing, which led to businesses shutting down because they wouldn’t operate with no profit or at a loss. (The dairy industry was a prime example.) Then the government started seizing these businesses and tried to keep them going. Not only was the government less efficient at running the businesses than the experts who left them–meaning there was less product to go around–but the government adhered to its own price rules and operated the businesses at a huge loss. This caused the government to get into (worse) debt very quickly. Between that and trying to pay people more in benefits to keep them from rioting over a lack of things like milk and toilet paper, the government started to print money. (I was also reading an article today about Venezuela selling off its gold reserves or forfeiting them when they defaulted on loans; losing gold like that–even if you’re not on a gold standard–has the same effect as printing more money or adulterating the precious metal content of your coins: inflation.)

      Last I checked, I think the inflation rate was scheduled to hit a million percent or something crazy like that before the end of the year. Needless to say, hyperinflation on top of things like job loss and shortages is making the situation infinitely worse (having no milk for sale is bad, having piles of money that won’t buy a meal of rice for your kid is even worse) and will definitely cause Maduro to fall. If he had reversed course before the hyperinflation debacle, he probably would have survived. But now, he’s going down. Even the Wiemar Republic, which reversed its hyperinflation before society broke down completely (I think they are the only example of that?) didn’t long survive.

  11. Mark H says:

    I really enjoyed your explanation and research results. Your writing flowed easily and I read it all. I am an old guy. Born in 1943. When I was in high school I read quite a bit about this period in German history.
    There was one picture I saw then and can’t find now of a woman in 1923 burning money for heat in her bread oven because it was cheaper to burn deutchmarks to bake bread than it was to burn coal. That made quite an impression on me then and people have a tendency not to believe me.
    You are probably done with this explanation, however, I thought it might make a good addition to this if you could find it.

    • Keri Peardon says:

      Yes, I have seen pictures of people burning bundles of marks in their stoves.

      The fact that people don’t believe that things like that can happen is how we end up with Zimbabwe and Venezuela.

  12. […] with unchecked inflation you get situations, where a society’s purchasing power has been completely destroyed due to devaluation of the currency to the point where you need a wheelbarrow of money just to buy goods at […]

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