Who or what would you blame for hyperinflation in Germany, during the 1920s?
Basically, the French were to blame. Their insistence on reparations within the 1919 Treaty of Versailles made Germany into a bankrupt state. Article 231 of the Treaty (known as the ‘war guilt clause’) declared Germany and its allies responsible for all loss and damage suffered by the Allies during the war and provided the basis for reparations. It was a revenge process on the part of the French, to “pay back” their defeat in the Franco-Prussian War of 1870. The French seemed to forget that Germany did not exist as a country in 1870, not did the Kaiser rule over anywhere at that date. The French lost that war to a small principality in the north of what was later to become Germany, and they couldn’t stomach the shame of it. John Maynard Keynes, the British economic advisor resigned from Government service because of the predictable consequences of the reparations requirement insisted upon by the French. Later in 1919, he wrote his famous short book “The Economic Consequences of the Pea
