2. What were the economic, political, and social effects of the German Hyperinflation?
In 1923, as inflation in Germany proceeded, German people were desperately eager to throw away their depreciated Marks by buying goods and businessmen speculated raw materials, machinery, and other resources. Those who had access to credit borrowed heavily for these purposes, and hyperinflation wiped out their debt. There was a tremendous conversion of working capital into fixed investments. Once Lenin said to have proclaimed that the best way to collapse the Capitalist System was to debauch the currency, as hyperinflation occurred, and the real value of Marks fluctuated severely from month to month, all enduring relations between debtors and creditors, which from decisive foundation of Capitalism, became crippled.
From bad to worse, the productivity of economy as a whole got deteriorated; Multiplied numbers of middlemen who fully enjoyed the arbitrage profits, huge amount of speculation and endless paperwork generated by currency fluctuations, new tax law regulations, labor inefficiency and overloaded banking system. In a nutshell, German hyperinflation is seen as a catalyst that led the country into tremendously dire strait.
Even the symbol of ultimate and abundant source of credit, the German central bank, Reichsbank had an ill effect to the whole economy; there were growing scarcity of credence in the society. Retailers could not get goods or else could not sell at a profit. The money they got was depreciating extremely fast. Farmers quitted selling their produce. Stores got empty. Unemployment hiked. Everybody devastated. The collapse of Economy generated social destabilization, chronic frustration and anxiety. People no longer pinned their faith on governmental policies, regulations and moreover the government itself. This also spurred political turmoil, while set the stage for the most vicious dictator in history, Adolf Hitler and Nazism that is highly but...