Roman Empire
The Roman Empire was an empire that was keen on expanding its land and population by war. When the empire continues to wage war against others, it requires money to support. However, silver and gold are scarce precious materials; therefore, a limited amount of coins could be minted.
So, there is a question. How could the Roman Empire continue its plan as usual to wage war?
Initially, the roman coin is a high-quality coin that weighs 4.5 grams of pure silver. They figure it out to devalue its coin by decreasing their purity, making value from nowhere, leading to a decline of purchasing power and distrust of Roman-made coins.
As a result, the government getting poorer to raise more taxes to their people, the whole society experiencing hyperinflation loses the medium to trade.
Weimar Republic
After the end of the 1st world war in 1918, Germany has lost. They have to accept and agree to the implementation of the treaty of Versailles. The allies set the terms, and they don’t have the right to give any opinion.
Do you know what terms did the Weimar Republic have to accept, leading to a financial crisis?
According to the treaty of Versailles (Article 231), I Quote.
“The Allied and Associated Governments affirm and Germany accepts the responsibility of Germany and her allies for causing all the loss and damage to which the Allied and Associated Governments and their nationals have been subjected as a consequence of the war imposed upon them by the aggression of Germany and her allies.”
Treaty of Versailles, Article 231
Meaning that the Weimar Republic is responsible for mandatory compensation for the loss and damage of the invasion. A heavy burden suddenly falls to the country and their people, including the massive debt, loss of farmland, coalmine, and timberland, etc.
The government of the Weimar Republic acknowledges that they could not afford to pay for the allies’ compensation and start losing the faith of the foreign investor to invest in their economy. Therefore, the authority chose to enforce a quantitative easing policy (Print money) and reduced the purchasing power of the Mark. Consequently, leading to hyperinflation, the people getting much poorer.
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Quite a nice article, describe the hyperinflation history!!!