The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class

much more relevant to our concerning environment than even is an analysis of our current recession. It is historically accurate, reflecting what happened in Germany, saddled with addictive debt and the lack of discipline. Anyone curious enough to investigate this book will learn a lot from this seriously relevant work. One need not be a history or finance buff to easily understand and relate to its content. The content is presented with no political bias; rather, the author does an excellent job of condensing and simplifying REAL, factually supported, history. We have all heard of the depreciation of the value of the German Mark (from 4.2 Marks to the U.S. dollar to as low as over 25,000,000,000 Marks equalling the buying power of just one dollar). The impact of WW1 on Germany, its economy, eventually Hitler's rise and WW2 is well known, as is the wholesale printing of Marks. All of this and other converging issues are well addressed by the author. I know of no controversy challenging these auditable facts. "Germany wa spending money she did not have;" "She borrowed too much and spent too much;" "resorted to systemic inflationaary behavior as the only way of avoiding....;" "inflation crept up, slowly at first and then gathering speed;" ......does some of this ring with us today??? There can be no disagreement that a lesser but similar printing of dollars has grown dramatically in the U.S. today. The degradation of the U.S. dollar has continued for decades, but the acceleration of this degradation in recent years may well be mirrored by the downfall of the Mark, and in turn of Germany's terrible, and sustained, losses in their living standards and international posture for years, and to where this further led. AN OUTSTANDING BOOK! In my opinion the best and most relevant nonfiction work of the year. I encourage you to read this work.

Almost everyone has heard about the hyper inflation that beset Germany in the years after World War 1 but very few have taken the time to study it in detail. This book does an excellent job of laying out the key steps along the 5 year path from November 11, 1918 to the cresting of the inflationary cycle in November, 1923. The author's style is very readable and even exciting (at least to me), as he brings in several important but not well known personalities. He also covers more technical information in a way that I think most non experts can follow. The discussion at the end attempts to summarize the gap from 1923 to the present but is too sketchy to be of much help. However, notwithstanding the clear differences between then and now, the perspectives to be gained about the dangers of neglecting sound fiscal and monetary policies are very relevant to today's world. Anyone with an interest in current economic and political affairs should read this book for some of the lessons that history can teach!

This was a gift for my husband. He commented that it was very informative.

At a time when America faces a rebellion against taxation, a need for reorganization of a bloated federal bureaucracy, and reform of an overly generous entitlements program, it is indeed timely to review the economic upheaval facing Germany at the end of the first world war, and the lasting impact on modern Europe. For all of what we experienced after the Great Recession, we can find an analog in this history. Germany's attempt to face intolerable war debt with an expansionary fiscal and monetary policy after the war is analogous to quantitative easing practiced by the Federal Reserve, and stimulus spending by the U.S. administration. Inflation in Germany destroyed the wealth of savers, bond holders, and creditors, creating a class structure that pitted the well-to-do against the miserably poor and creating a bifurcated distribution of wealth analogous to American stagnation of income of the working and underprivileged classes even as the wealthy prosper. The bifurcation in Germany fostered the development of extreme social/political movements consisting of Communists on the left and the National Socialist Party on the right, analogous in the United States to the rise of the Tea Party Movement and a federal government increasingly subject to the pressures of private interest groups - a dysfunctional government that appears to function more like a plutocracy than a democracy. The author concludes with a discussion of the effects of this economic upheaval on present-day Europe, the Euro zone, which is apparently willing to endure harsh austerity as a remedy for the economic breakdown of the recession, even if it might lead to higher unemployment. Americans seem content to print money and run a consistent deficit as part of the federal budget. But the trends toward economic inequality and extremist factions in government cannot be ignored. When Congress appears willing to default on government debt and to put 800,000 people out of work in order to achieve what was arguably a minor modification in health law, things have clearly run amuck. The author also explains how the weak government in the Weimar Republic would make decisions that minimized public resistance rather than facing up to the hard tasks that needed to be done: fix the tax system, streamline the government bureaucracy, and reform entitlements. This looks a lot like today's U.S. government. We have a weak government proven to hardly function at all, and all of the problems that accumulate after decades of terrible mistakes: sub-prime mortgages; foolish wars; decisions that favor expansion of government, since in that way, the fewest congressmen might feel offense. It must be said that stupidity ultimately will lead to disaster; we will not survive unless we somehow can find the wherewithal to correct our governmental ways. Frederick Taylor has given us much to think about.

At the worst of the hyper inflation a U.S. dollar was worth 3 billion marks. Workers were paid twice a day and their wives anxiously awaited the payments so they could run out buy whatever could be had. I found the most interesting part was the explanation of why solid middle class Germans followed Hitler. During WW1 they patriotically bought war bonds and invested in real estate, were landlords and had their savings as well as the bonds wiped out after the war. They associated the Weimar Republic and hence Democracy with this along with the "stab in the back" and turned not to the Left for remedy but to the Right where the National Socialists promised a better tomorrow and revenge on those who betrayed the Fatherland. There is a lot of dry economics and many lists of currency rates and prices to get through but it's well worth it. A terrific cautionary tale against an unsound economy.

This is an absolutely excellent book on inflation. The author starts with the fact that the Germans did not pay for the war with more taxes (which the US did mostly during WWII). It just printed money. This meant inflation, but it wasn't crippling. After the War, the Germans were in chaos with an attempted Communist takeover which was defeated followed by an attempted right wing takeover which was defeated by the SPD organized general strike. The SPD lead the government and was generous with social benefits even if it did not have the money to pay them. This meant more inflation. Now it was getting bad. But the clincher was the French/Belgian occupation of the Ruhr and the Ruhr workers going out on strike. The Weimar government continued to pay them. Nice sentiment, but you can't pay people and get no economic work in return. The result was the horrendous 1923 inflation which totally destroyed the German currency and Middle Class savings. One would think we would learn from this historical experience. But Argentina hasn't. It is going down the same inflationary path (without a war to blame it on). The Argentine Peso was 1 to 1 with the Dollar in 2000. It is 12 to the Dollar in Jan 2014......and worse is to come. These two case histories (Germany 1914-1923, Argentina 2000-2014) should be taught in every university economics curriculum. I hope that Frederick Taylor is writing a book about Argentina.

A really wonderful book on Germany after WWI and the impact of the Allied policies on the Weimar Republic. It is a much broader story than simply the rise of the German hyperinflation and goes to the left/right counter revolutions that led to the rise of the Nazi party. My mother was born in the Rhineland in the late 1920's and it really helped to understand what her parents endured. We have million mark notes at home as a reminder of the destruction that bad economic policies can cause.

A solid, basic primer on hyperinflation in the Weimar Republic, and the rationale behind it, particularly the position of the Social Democratic Party, and the occupation of the Rhur by France. There is some padding involving WWI with much that is extraneous to the topic in the title. Some analogies to present day issues involving the Federal Reserve seem strained, but the impact of the hyperinflation on the German Middle Class, and subsequent radicalization of that group leading to support for a more authoritarian system of government are well made using primary sources. More detailed economic analysis would have been welcome.

A must read for anyone who’s interested in finance. Being interested in monetary phenomenas of our times, from the apparently simple question of “what is money” to the understanding of contemporary finance, I found in this book the answers to my questions. This book will certainly be a source of historical references for me when I try to interpret the financial complexity of the modern world.

Excellent insight into the events that kept Germany from becoming a communist country after WW l but at the same time together with its requirement to pay reparations to France, the UK in order that they in turn could repay their loans from the USA which insisted on full repayment of those loans led to massive inflation followed by the coming of Hitler and subsequently WW ll.

The Downfall of Money is a very authoritative and detailed account of how the Hyperinflation in Germany after the First World War effectively destroyed German society and its economy. As we all know this process led directly to the rise of Hitler and Second World War. Of particular interest is the analysis of who was responsible for the catastrophe.Nobody escapes. The implication of Fred Taylor's scholarly conclusions is that there is a danger that the world is headed in exactly the same direction with the reckless printing of money (quantitative easing) and now with Putin's antics in the Ukraine.

This is the author's fourth book on German history. This is a study of the hyperinflation that befell the Weimar Republic in the early 1920s.It is presented in his usual style and was a pleasure to read. He offers a confident analysis without being partisan. He combines the views of experts, such as Keynes, with the diaries of ordinary folk, such as a schoolteacher. For Frederick Taylor history is lived. This is a book for the academic and for the general reader. Economics may not be a science but can be very obscure. I am not an economist. This book offers a clear and credible explanation of why the mark collapsed from an exchange rate of 4.2 to the US dollar in 1913 to 4.2 trillion [just add 12 zeroes] in 1923. To finance the war Germany borrowed from its middle class and printed money; once the war was won the defeated would meet the bill. The problem was that Germany lost and the victors added their costs to Germany's own at Versailles. Thereafter the new German democracy felt a degree of inflation was a good idea - the debt it owed to its own citizens was reduced; additionally, to reward those who had fought for the fatherland money was printed to provide jobs and benefits. It could not meet reparations as demanded in the peace treaties. When an impatient France occupied the Ruhr the system collapsed and the mark ceased to be a viable currency. Germany was saved by Stresemann who essentially introduced a new currency - the Rentenmark - and severely limited the amount in circulation. The effect was that a war debt of 150 billion marks became 15 pfennigs. The savings of the middle class vanished. I am sure there is more to it all than that, but I could get what Taylor was arguing here. The book also describes the political confusion and violence of the period, both cause and consequence of the economic crisis. Much is familiar but I was unaware how close to civil war the country came as Communist Saxony's paramilitaries confronted Bavaria's stormtroopers. Frederick Taylor provides many telling quotes. The most memorable comes from Keynes. Reflecting on the fortune he lost speculating on the mark in 1922 he noted "how little bankers and servant girls know of history and economics".

This book is a brief story of what happens during world war 1 and especially it covers the German side of story. The interesting bit is how and why Germany moves from reischmark to rettenmark and what impact does it have on people is covered very well by the author.