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In January of 1921 the average monthly exchange rate was 64 marks per dollar. This meant Germany owed 2.112 trillion marks. Despite the extent of its debt, Germany never increased taxes above 35% of expenditure from 1919 to 1923. Instead, the German government printed more money. In November of 1918 there were 29.2 billion (29,200,000,000) notes in circulation. Within five years the number of notes in circulation had increased to 497 quintillion. With this amount in circulation, the quantity of money fell off a cliff, and with the interest rate decreased, if not eliminated, people's desire to save became almost non-existent...
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Common topics in this essay:
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