Why did Germany suffer from hyper- inflation in 1923?
1. Germany fought the war largely on loans and had to pay war reparations in gold. This heightened the economic crises of 1923.
2. The economic crises of 1923 created a situation when the prices of goods and services were very high.
3. Germany retaliated with passive resistance and printed paper currency recklessly. With too much printed money in circulation the value of the German Mark fell.
4. This crisis came to known as hyperinflation, a situation when prices rise phenomenally high.
