Post WWI Germany is the classic example of hyperinflation. The woman above is literally burning money to light her stove. We need to know the perils of inflation in this class.
Sunday, October 08, 2006
How Bad Could A Little Inflation Be?
Post WWI Germany is the classic example of hyperinflation. The woman above is literally burning money to light her stove. We need to know the perils of inflation in this class.
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6 comments:
Even though inflation rates were rising at a fast rate it seems rediculous to burn money. I wouldent ever burn money just because it is losing value and it also is against the law. And im not a criminal so i wouldent ever burn money. (placeholder blog)
first of all, i think it's rediculous that out of all the intelligent (or so you would hope) people in the german government, no one realized that this hyperinflation would not be the best thing for their post-war economy. is it possible that if the punishment inflicted on germany after WWI hadn't been so harsh, this never would have happened? what is the trend with a losing countries post-war economy? does hypoinflation work the same way?
p.s.-mr rood, i heard you make fun of my comments in the other class. that makes me sad. :'(
In America today we're used to minor inflation and it's not necessarily a bad thing, especially when considering mortgages. But what happened in Germany proved that if inflation gets out of hand the effects are disastrous, and when the economy is left on its own it turns into a destructive cycle that's hard to recover from. What happened in Germany was definitely a lesson to all economists.
As Sonya said, minor inflation isn't always a bad thing. But when it gets out of control, that's when everyone should be worried. The problem in Germany started even before the war; the government thought the war would have been short, and I bet that no one in the country thought the reparations were going to be so high. Always expect the unexpected. Countries need to learn from the mistakes Germany made in the post WWI era and hope that they will never experience hyperinflation to that effect.
I now see the major problem in printing too much money. If you just start printing like its nothing more than ordanary paper than really thats all it is if its not backed up by gold. I see how this could lead to such a problem as it did in Germany after the war
yes, while i have always understood that hyperinflation is very troublesome for the economy, i never realized that it could go to such an extreme degree. to see this picture, makes hyperinflation a reality, as opposed to just a definition. but as sean said, i wouldnt ever burn money. not becuase im not a criminal (i mean, im not a criminal, but thats not the reason that i wouldnt burn money)i wouldnt burn it because doesn the hyperinflation have to come down at some point? at some point, wont that money be valuable again? or maybe, the only way to bring it down again is to burn the surplus money? hmm
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