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0 pointswqaatwt5mo ago0 comments

Inflation like that doesn’t just happen. It can only be the outcome of explicit government policy. Like in post WW1 Germany they wanted to wipe the value of all domestic government debt they accumulated during the war.

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ericd5mo ago

Eh my understanding was more that they had to cover fiscal deficits with printing, because they had heavy WW1 war reps (only payable in gold, so they couldn’t inflate it away).

There are times when it’s politically infeasible to defend the currency, even if they technically could. See the response in France to trying to raise the retirement age a bit, because their budget is in trouble.

wqaatwtOP5mo ago

Supposedly Germany was spending around 80% of its tax revenue on interest payments alone. They pretty much had to finance the war through domestic bonds.

So yes, pretty they didn’t have any money to spend on anything else. Of course bonds became worthless well before the peak in inflation.

ericd5mo ago

Eesh thanks for that detail, didn’t realize it was so crushingly high.

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ericd5mo ago

Eh my understanding was more that they had to cover fiscal deficits with printing, because they had heavy WW1 war reps (only payable in gold, so they couldn’t inflate it away).

wqaatwtOP5mo ago

Supposedly Germany was spending around 80% of its tax revenue on interest payments alone. They pretty much had to finance the war through domestic bonds.

So yes, pretty they didn’t have any money to spend on anything else. Of course bonds became worthless well before the peak in inflation.

ericd5mo ago

Eesh thanks for that detail, didn’t realize it was so crushingly high.

j / k navigate · click thread line to collapse