Last Friday, while many were off for Veteran’s Day, we put in a day at the office, belaboring things portentous to our clients…and by extension ourselves. Nonetheless, we paused a moment to consider the ‘all quiet on the western front’ Armistice and today’s world we live in.
From what we gather ‘the war to end all wars’ brought a new disorder to Europe. By the time it was over, economies were ruined, governments were defeated, and national confidences were crushed. On top of that, the Treaty of Versailles, and its repercussions, prompted Germany to blow up its currency. It was the rational thing to do.
One of the provisions of the treaty required Germany to make reparation payments that were impossible for their economy to cover. To lighten the burden the German government, the Weimar Republic, began printing paper banknotes. The results were disastrous.
Between January 1922 and November 1923 the wholesale price index rocketed from 36.7 percent to 726,000,000,000.0 percent. By late 1923 it took 200 billion marks to buy a loaf of bread. In effect, Germany’s money died…along with its middleclass. Continue reading
