The Treaty of Versailles

in LeoFinancelast year

like pretty much all countries Germany suspended its gold standard during World War one to make funding everything easier with the intention of getting back on track after winning the war and annexing productive regions making the losers pay huge damages and so on however they lost the war so the exact opposite happened after signing the armistice of November 11 1918 which effectively ended World War one Germany retreated to its pre-war borders and on the 28th of June 1919 the Treaty of Versailles imposed debilitating conditions on them strangely enough the treaty didn't really end up pleasing anyone the Germans found the terms too harsh yet the French and Italians wanted even more drastic conditions later on in 1921 it was decided that Germany needed to pay war reparations to the tune of 132 billion gold marks not in its own currency but in an accepted one or in nature by sending goods or commodities the amount represented 30 1.5 billion dollars back then and in today's dollars we'd be looking at roughly 400 billion however only fifty billion of those gold marks had to actually be paid the rest was basically fictional death which was supposed to look good in headlines and please the public unfortunately even so this crippled Germany and the mark before World War one 4.2 Marx bought you one u.s. dollar shortly after the war you would have needed 7.9 and by the end of 1919 or the 8th Marx would have been required despite initially stabilizing at about 90 marks per dollar in early 1921 the 50 billion gold mark payments took their toll on the mark which started 1922 at roughly 320 per dollar as of a certain point Germany could just no longer afford to make those payments and stopped making the French and Belgians decided to occupy their industrialized rural area despite the resistance and general strike of the workers the support destroyed can make various payments Germany kept needing to print currency and things did generate a dramatically with a dollar being worth four point two trillion marks in November of 1923 all in all the Versailles Treaty was definitely responsible to a large degree for this hyper inflationary mess and in the end it can even be considered one of the main causes of World War two