WI no German hyper inflation

No, marks were not paid for those. Dollars were received via loans:
http://en.wikipedia.org/wiki/Dawes_Plan
Those loans were a response to hyperinflation to stabilize Germany's currency and thus the European economy.

Exactly. They were A RESPONSE to hyperinflation. They did not precede it. The Dawes Plan was agreed upon in 1924, after hyperinflation had already hit. Prior to that, Germany DID buy foreign currency in paper marks (see below)


Germany couldn't use her currency to buy foreign currency and gold once hyperinflation hit.

But we're talking about the pre-hyperinflation period here, and how to prevent it.



sure, and british pound owners were just twiddling their thumbs...

dream on.

If you ever heard of german "Erfüllungspolitik", good job.
If not, now is the time to look it up, mate.

http://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic
Because reparations were required to be repaid in hard currency and not the rapidly depreciating Papiermark, one strategy Germany employed was the mass printing of bank notes to buy foreign currency which was in turn used to pay reparations. This greatly exacerbated the inflation rates of the paper mark.[8][9]

In the future, I wouldn't be so cocky any more, mate.
 

tenthring

Banned
Have the French not occupy the Ruhr region. German government doesn't print money to pay workers not working and you could avert the harshest parts of hyper inflation.

Bingo.

Not saying it will stop it, but occupation of the Ruhr was a huge misstep. If you wanted to invade Germany just invade in 1918. Instead they did a little mini invasion that didn't even work and they had to leave.
 
But we're talking about the pre-hyperinflation period here, and how to prevent it.





http://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic


In the future, I wouldn't be so cocky any more, mate.

Really? your link just proves my point:

"Because reparations were required to be repaid in hard currency and not the rapidly depreciating Papiermark, one strategy Germany employed was the mass printing of bank notes to buy foreign currency which was in turn used to pay reparations. This greatly exacerbated the inflation rates of the paper mark"

Germany couldnt´ pay off the reparations by just "printing money".

Erfüllungspolitik, did you look it up/know about it?

"During the first half of 1922, the Mark stabilized at about 320 Marks per Dollar. This was accompanied by international reparations conferences, including one in June 1922 organized by U.S. investment banker J. P. Morgan, Jr.[10] When these meetings produced no workable solution, the inflation changed to hyperinflation and the Mark fell to 800 Marks per Dollar by December 1922. The cost-of-living index was 41 in June 1922 and 685 in December, a 15-fold increase."

In January 1923 French and Belgian troops occupied the Ruhr, the industrial region of Germany in the Ruhr valley to ensure that the reparations were paid in goods, such as coal from the Ruhr and other industrial zones of Germany. Because the Mark was practically worthless, it became impossible for Germany to buy foreign exchange or gold using paper Marks. Instead, reparations were paid in goods.
 

Deleted member 1487

Exactly. They were A RESPONSE to hyperinflation. They did not precede it. The Dawes Plan was agreed upon in 1924, after hyperinflation had already hit. Prior to that, Germany DID buy foreign currency in paper marks (see below)




But we're talking about the pre-hyperinflation period here, and how to prevent it.





http://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic


In the future, I wouldn't be so cocky any more, mate.
Hyperinflation cut off the ability to use marks to buy anything abroad, but that was at the start of hyperinflation, so things got much worse after they lost the ability to use marks externally. Hyperinflation started as a result of the first payment of hard currency in 1921 cutting into the gold backing the currency; with less of the gold on hand they couldn't maintain the value of their currency so reacted by trying to use marks to buy foreign currency, which was quickly cut off after it was attempted. It worked briefly, but was recognized for what it was and no one would take marks.

However the issue started pre-TOV with the German decision to finance the war through borrowing and later printing money, so that Germany was already on the brink of hyperinflation when the ToV payments were demanded and those shoved Germany into hyperinflation immediately.

If you want to prevent hyperinflation then you need Germany to win the war or the ToV to not be imposed; Germany will still be on the brink of hyperinflation after the war and may still go into it regardless, just not as quickly or as hard as IOTL. However with the ToV its impossible to avoid. In fact even if the German government during the war had decided to finance the war by income tax instead of printing money and borrowing (or a combination of methods) it would still have had serious inflation issues by the end of it and the ToV would have still caused hyperinflation, again probably not to the extreme extent as IOTL, but unacceptable nonetheless.

I think its nearly impossible to get an Entente victory and no ToV, so that IMHO is not a route to prevent hyperinflation. You would need a German victory or negotiated peace sans reparations to avoid hyperinflation.
 
Hyperinflation cut off the ability to use marks to buy anything abroad, but that was at the start of hyperinflation, so things got much worse after they lost the ability to use marks externally. Hyperinflation started as a result of the first payment of hard currency in 1921 cutting into the gold backing the currency; with less of the gold on hand they couldn't maintain the value of their currency so reacted by trying to use marks to buy foreign currency, which was quickly cut off after it was attempted. It worked briefly, but was recognized for what it was and no one would take marks.

However the issue started pre-TOV with the German decision to finance the war through borrowing and later printing money, so that Germany was already on the brink of hyperinflation when the ToV payments were demanded and those shoved Germany into hyperinflation immediately.

If you want to prevent hyperinflation then you need Germany to win the war or the ToV to not be imposed; Germany will still be on the brink of hyperinflation after the war and may still go into it regardless, just not as quickly or as hard as IOTL. However with the ToV its impossible to avoid. In fact even if the German government during the war had decided to finance the war by income tax instead of printing money and borrowing (or a combination of methods) it would still have had serious inflation issues by the end of it and the ToV would have still caused hyperinflation, again probably not to the extreme extent as IOTL, but unacceptable nonetheless.

I think its nearly impossible to get an Entente victory and no ToV, so that IMHO is not a route to prevent hyperinflation. You would need a German victory or negotiated peace sans reparations to avoid hyperinflation.

i couldnt agree more!
 

Deleted member 1487

Bingo.

Not saying it will stop it, but occupation of the Ruhr was a huge misstep. If you wanted to invade Germany just invade in 1918. Instead they did a little mini invasion that didn't even work and they had to leave.
That's not going to stop the hyperinflation though, it just kicked it into overdrive; it was already a fact for over a year by the time the Ruhr Occupation happened.
 
Hyperinflation cut off the ability to use marks to buy anything abroad, but that was at the start of hyperinflation, so things got much worse after they lost the ability to use marks externally. Hyperinflation started as a result of the first payment of hard currency in 1921 cutting into the gold backing the currency; with less of the gold on hand they couldn't maintain the value of their currency so reacted by trying to use marks to buy foreign currency, which was quickly cut off after it was attempted. It worked briefly, but was recognized for what it was and no one would take marks.

However the issue started pre-TOV with the German decision to finance the war through borrowing and later printing money, so that Germany was already on the brink of hyperinflation when the ToV payments were demanded and those shoved Germany into hyperinflation immediately.

If you want to prevent hyperinflation then you need Germany to win the war or the ToV to not be imposed; Germany will still be on the brink of hyperinflation after the war and may still go into it regardless, just not as quickly or as hard as IOTL. However with the ToV its impossible to avoid. In fact even if the German government during the war had decided to finance the war by income tax instead of printing money and borrowing (or a combination of methods) it would still have had serious inflation issues by the end of it and the ToV would have still caused hyperinflation, again probably not to the extreme extent as IOTL, but unacceptable nonetheless.

I think its nearly impossible to get an Entente victory and no ToV, so that IMHO is not a route to prevent hyperinflation. You would need a German victory or negotiated peace sans reparations to avoid hyperinflation.

So basically Germany financed a war on credit with the expectations that they would impose reparations on the losers to pay off the loans.

And the way to avoid hyperinflation is let Germany win the war :D - because even if they draw they can't pay back the loans.

They could have decided not to fight the war of course
 

Deleted member 1487

So basically Germany financed a war on credit with the expectations that they would impose reparations on the losers to pay off the loans.

And the way to avoid hyperinflation is let Germany win the war :D - because even if they draw they can't pay back the loans.

They could have decided not to fight the war of course
Without a war there wouldn't be a discussion, but that is good route to take.
 
That's not going to stop the hyperinflation though, it just kicked it into overdrive; it was already a fact for over a year by the time the Ruhr Occupation happened.

the hyper inflation was already predetermined because the german preww1 economy was expecting a ww1 victory to pay off ww1 debts. Even if after ww1 no reparations were determined AT ALL, a huge debt would have caused a BIG inflation (maybe not hyper-inflation), because the german economy was indebted on this "win" scenario and the loosers paying reparations to germany...

It turns out that BOTH the entente AND the CP were counting on a win AND a looser who has the econimic power to PAY the winner its share so the winner doesnt go bankrupt. Who would have thought the looser would go bankrupt first? (leaving the winners, basically france and GB, waiting for the gold from germany to be delivered so they could deliver it to the USA, who were also waiting to get the loans back from france and GB...)

France crippled germany in the treaty of versaille, the brits were hoping for a continuation of exports to the german market and werent too pleased by the frenche germans for a reason and built up the maginot line despite major political h overemphasized demands. The german market was suddenly dead for the brits. The brits and french (french to a lesser degree, they feared inner political debate about it --- the brits could care less about THAT) had to demobilize and have a "peace economy" the brits were more successful at that than the french, the french having changed their government QUITE alot during the interwar-years AND facing the germans (even though the germans lost ww1, the french lost more in population/available male working/fighting men in % to the germans).

Still the french were basically borrowing from the brits and the brits were borrowing from the USA and the french were expecting the germans to pay it all, it just didnt happen all like that, which caused all a lot of troubles... :D
 
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So basically Germany financed a war on credit with the expectations that they would impose reparations on the losers to pay off the loans.

And the way to avoid hyperinflation is let Germany win the war :D - because even if they draw they can't pay back the loans.

They could have decided not to fight the war of course

That is a correct analysis. It should be noted though, that ALL major ww1 combatants counted on the loosers to pay for the loans via imposed reparations, this was not a german-only phenomena.

Its just that the Entente had the USA to give loans and germany had not.

Otherwise the ww1 might have ended in 1916 when the Entente had run out of cash in a ceasefire and a deal between the ww1 combatants (who after all, were family to each other, to some degree...;))

The problem of the versailles treaty was that germany was NOT able to pay for all the reparations that were imposed on it (leading to unfullfilled claims for France, leading to unfulfilled claims from GB, leading to unfulfilled claims from USA who were the ultimate creditor...
 
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