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Germany’s Hyperinflation, 1923

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In January 1923, French and Belgian troops occupied the Ruhr Valley to compel repayment of World War I debts—set at 132 billion gold marks—from a wavering Germany. Workers resisted the incursion through absenteeism, supported by German welfare payments. The nation’s fiscal position had already deteriorated as the Socialist government tried to meet foreign obligations and to mend the tattered social fabric by deficit spending. An inflation tax is easy to collect and requires no parliamentary wrangling. Soon after the occupation began, Germany capitulated to the French and Belgians and the deficit ballooned further still.


Suggested citation: “Germany’s Hyperinflation, 1923,” Federal Reserve Bank of Cleveland, Economic Trends, no. 98-09, pp. 19, 09.01.1998.

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