Inflation in Nazi Germany - Revision history

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	==Links==		==Links==
	* [[Wikipedia:Economy of Nazi Germany\|Economy of Nazi Germany]] on Wikipedia		* [[Wikipedia:Economy of Nazi Germany\|Economy of Nazi Germany]] on Wikipedia
	* [~~http~~://~~mises~~.org/~~document~~/~~3080~~ The Vampire Economy] by Guenter Reimann, 1939		* [https://freecapitalists.org/books/the-vampire-economy/ The Vampire Economy] by Guenter Reimann, 1939
	* [~~http~~://mises.org/freemarket_detail.aspx?control=507 Nazism is Socialism] by Adam Young, September 2001		* [https://mises.freecapitalists.org/freemarket_detail.aspx?control=507 Nazism is Socialism] by Adam Young, September 2001
	* [~~http~~://mises.org/daily/1935 The Vampire Economy: Italy, Germany, and the US] by Jeffrey M. Herbener, October 2005		* [https://mises.freecapitalists.org/daily/1935 The Vampire Economy: Italy, Germany, and the US] by Jeffrey M. Herbener, October 2005
	* {{md\|5963\|The Vampire Economy and the Market\|Ben O'Neill\|March 2012}}		* {{md\|5963\|The Vampire Economy and the Market\|Ben O'Neill\|March 2012}}
	* [http://reason.com/archives/1999/08/01/nazi-economics Nazi Economics] by Michael McMenamin, August 1999		* [http://reason.com/archives/1999/08/01/nazi-economics Nazi Economics] by Michael McMenamin, August 1999
	* {{md\|3274\|Nazi Economic Policy\|David Gordon\|January 2009}}		* {{md\|3274\|Nazi Economic Policy\|David Gordon\|January 2009}}
	* [https://mises.org/freemarket_detail.aspx?control=54 Business Under Nazis] by Ralph R. Reiland, October 1998		* [https://mises.freecapitalists.org/freemarket_detail.aspx?control=54 Business Under Nazis] by Ralph R. Reiland, October 1998
	* [[Omnipotent Government]] by Ludwig von Mises		* [[Omnipotent Government]] by Ludwig von Mises

	[[Category:Inflations\|Nazi Germany]]		[[Category:Inflations\|Nazi Germany]]
	[[Category:History of Germany]]		[[Category:History of Germany]]

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	* {{md\|5963\|The Vampire Economy and the Market\|Ben O'Neill\|March 2012}}		* {{md\|5963\|The Vampire Economy and the Market\|Ben O'Neill\|March 2012}}
	* [http://reason.com/archives/1999/08/01/nazi-economics Nazi Economics] by Michael McMenamin, August 1999		* [http://reason.com/archives/1999/08/01/nazi-economics Nazi Economics] by Michael McMenamin, August 1999
			* {{md\|3274\|Nazi Economic Policy\|David Gordon\|January 2009}}
			* [https://mises.org/freemarket_detail.aspx?control=54 Business Under Nazis] by Ralph R. Reiland, October 1998
			* [[Omnipotent Government]] by Ludwig von Mises

	[[Category:Inflations\|Nazi Germany]]		[[Category:Inflations\|Nazi Germany]]
	[[Category:History of Germany]]		[[Category:History of Germany]]

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	This inflation was remarkable for the success in suppressing an increase in prices, but its effects were not less severe. It was clear to Hitler and the other potentates of the Nazi Germany, that another massive price inflation, like the one in [[Inflation in the Weimar Republic\|Weimar Republic]] (1914-1923), was not acceptable to the German people. To finance the coming [[World War II\|wars]], the prices had to be kept down.<ref name="Gaettens_Price">Richard Gaettens. ''Geschichte der Inflationen Von Altertum bis zum Gegenwart'' (German: History of Inflations from Old Ages to the Present), ''Die preisgestoppte Deutsche Inflation von 1936 bis 1948'' (The Price-Stopped German Inflation from 1936 to 1948) p. 279-298. ISBN: ISBN 3-87045-211-0. Referenced 2010-11-28.</ref>		This period of [[inflation]] was remarkable for the success in suppressing an increase in prices, but its effects were not less severe. It was clear to Hitler and the other potentates of the Nazi Germany, that another massive price inflation, like the one in [[Inflation in the Weimar Republic\|Weimar Republic]] (1914-1923), was not acceptable to the German people. To finance the coming [[World War II\|wars]], the prices had to be kept down.<ref name="Gaettens_Price">Richard Gaettens. ''Geschichte der Inflationen Von Altertum bis zum Gegenwart'' (German: History of Inflations from Old Ages to the Present), ''Die preisgestoppte Deutsche Inflation von 1936 bis 1948'' (The Price-Stopped German Inflation from 1936 to 1948) p. 279-298. ISBN: ISBN 3-87045-211-0. Referenced 2010-11-28.</ref>

	==Before the War==		==Before the War==
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	===Price controls===		===Price controls===
	An office for the oversight of prices was opened at the end of 1931, during the worst of Depression. It forced a decrease of wages, interest rates and related prices. When in 1936 the general level of prices started to rise as a consequence of the military spending, it was replaced with a 'comissar for the creation of prices'. In November of that year was issued a price stop, that forbade any price or wage increases; very few exceptions were granted. Finally, in June, 1938, were the [[cartel]]s given the right to set maximum wages, and the ''Dienstverpflichtung'' ('service duty') was introduced, ending the free choice of a workplace.		An office for the [[Price controls\|oversight of prices]] was opened at the end of 1931, during the worst of Depression. It forced a decrease of wages, interest rates and related prices. When in 1936 the general level of prices started to rise as a consequence of the military spending, it was replaced with a 'comissar for the creation of prices'. In November of that year was issued a price stop, that forbade any price or wage increases; very few exceptions were granted. Finally, in June, 1938, were the [[cartel]]s given the right to set maximum wages, and the ''Dienstverpflichtung'' ('service duty') was introduced, ending the free choice of a workplace.

	The natural interplay of supply and demand has ceased completely and the price mechanism lost its regulating effect on the market. The foundations of the market economy were destroyed and turned into a system of rationing, a pure [[command economy]]. The purchasing power of money seemed to be preserved, but the economy was still doomed. A new wave of inflation was initiated, while the prices were kept low.<ref name="Gaettens_Price" />		The natural interplay of supply and demand has ceased completely and the price mechanism lost its regulating effect on the market. The foundations of the market economy were destroyed and turned into a system of rationing, a pure [[command economy]]. The purchasing power of money seemed to be preserved, but the economy was still doomed. A new wave of inflation was initiated, while the prices were kept low.<ref name="Gaettens_Price" />

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	This inflation was remarkable for the success in suppressing an increase in prices, but its effects were not less severe. It was clear to Hitler and the other potentates of the Nazi Germany, that another massive price inflation, like the one in [[Inflation in the Weimar Republic\|Weimar Republic]] (1914-1923), was not acceptable to the German people. To finance the coming [[World War II\|wars]], the prices had to be kept down.<ref name="Gaettens_Price">Richard Gaettens. ''Geschichte der Inflationen Von Altertum bis zum Gegenwart'' (German: History of Inflations from Old Ages to the Present), ''Die preisgestoppte Deutsche Inflation von 1936 bis ~~1848~~'' (The Price-Stopped German Inflation from 1936 to 1948) p. 279-298. ISBN: ISBN 3-87045-211-0. Referenced 2010-11-28.</ref>		This inflation was remarkable for the success in suppressing an increase in prices, but its effects were not less severe. It was clear to Hitler and the other potentates of the Nazi Germany, that another massive price inflation, like the one in [[Inflation in the Weimar Republic\|Weimar Republic]] (1914-1923), was not acceptable to the German people. To finance the coming [[World War II\|wars]], the prices had to be kept down.<ref name="Gaettens_Price">Richard Gaettens. ''Geschichte der Inflationen Von Altertum bis zum Gegenwart'' (German: History of Inflations from Old Ages to the Present), ''Die preisgestoppte Deutsche Inflation von 1936 bis 1948'' (The Price-Stopped German Inflation from 1936 to 1948) p. 279-298. ISBN: ISBN 3-87045-211-0. Referenced 2010-11-28.</ref>

	==Before the War==		==Before the War==

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	==Links==		==Links==
	* [[Wikipedia:Economy of Nazi Germany\|Economy of Nazi Germany]] on Wikipedia		* [[Wikipedia:Economy of Nazi Germany\|Economy of Nazi Germany]] on Wikipedia
	* [http://mises.org/~~books~~/~~vampireeconomy.pdf~~ The Vampire Economy] by Guenter Reimann, 1939		* [http://mises.org/document/3080 The Vampire Economy] by Guenter Reimann, 1939
	* [http://mises.org/freemarket_detail.aspx?control=507 Nazism is Socialism] by Adam Young, September 2001		* [http://mises.org/freemarket_detail.aspx?control=507 Nazism is Socialism] by Adam Young, September 2001
	* [http://mises.org/daily/1935 The Vampire Economy: Italy, Germany, and the US] by Jeffrey M. Herbener, October 2005		* [http://mises.org/daily/1935 The Vampire Economy: Italy, Germany, and the US] by Jeffrey M. Herbener, October 2005

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	* [http://mises.org/freemarket_detail.aspx?control=507 Nazism is Socialism] by Adam Young, September 2001		* [http://mises.org/freemarket_detail.aspx?control=507 Nazism is Socialism] by Adam Young, September 2001
	* [http://mises.org/daily/1935 The Vampire Economy: Italy, Germany, and the US] by Jeffrey M. Herbener, October 2005		* [http://mises.org/daily/1935 The Vampire Economy: Italy, Germany, and the US] by Jeffrey M. Herbener, October 2005
			* {{md\|5963\|The Vampire Economy and the Market\|Ben O'Neill\|March 2012}}
			* [http://reason.com/archives/1999/08/01/nazi-economics Nazi Economics] by Michael McMenamin, August 1999

	[[Category:Inflations\|Nazi Germany]]		[[Category:Inflations\|Nazi Germany]]
	[[Category:History of Germany]]		[[Category:History of Germany]]

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	===Export and Import===		===Export and Import===
			{{See also\|Foreign exchange control}}
	The foreign trade was heavily regulated since the outbreak of the [[Great Depression]] in 1931. The first emergency regulations should block the repayment of foreign loans and capital flight. The English [[pound]] has devalued by 40% in 1931, followed by many currencies that were bound to it, the [[U.S. dollar]] devalued as well by 40% in 1933. The [[German mark]] could not be devalued (especially because of the recent hyperinflation), but lost many export markets. The export would be revived by subsidies.		The foreign trade was heavily regulated since the outbreak of the [[Great Depression]] in 1931. The first emergency regulations should block the repayment of foreign loans and capital flight. The English [[pound]] has devalued by 40% in 1931, followed by many currencies that were bound to it, the [[U.S. dollar]] devalued as well by 40% in 1933. The [[German mark]] could not be devalued (especially because of the recent hyperinflation), but lost many export markets. The export would be revived by subsidies.

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	[[Category:Inflations\|Nazi Germany]]		[[Category:Inflations\|Nazi Germany]]
			[[Category:History of Germany]]

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	==World War II, 1939-1945==		==World War II, 1939-1945==
	{{See also\|World War II}}		{{See also\|World War II}}
	While it could finance the whole war with inflation, the German government didn't want to repeat the mistakes of [[World War I]] - at least a part of the cost should be paid with higher taxes and similar measures. One major problem has been the supplying of small change, this was taken care of by the Rentenbank, whose notes have been well known to the public. Another issue was with the monetary needs in occupied territories. Areas, that were made part of the Reich - Poland, Alsace-Lorraine and Austria, had to use the Reichsmark as money. In other areas - Norway, Ukraine, the Baltic, Netherlands etc. - were issued ''Reichskreditkassenscheine'' (Reich's credit treasury notes) to pay the troops.<ref name="Gaettens_Price" />		While it could finance the whole war with inflation, the German government didn't want to repeat the mistakes of [[World War I]] - at least a part of the cost should be paid with higher taxes and similar measures. One major problem has been the supplying of small change, this was taken care of by the Rentenbank, whose notes have been well known to the public. Another issue was with the monetary needs in occupied territories. Areas, that were made part of the Reich - Poland, Alsace-Lorraine and Austria, had to use the Reichsmark as money. In other areas - Norway, Ukraine, the Baltic, Netherlands etc. - were issued ''[[Reichskreditkassenscheine]]'' (Reich's credit treasury notes) to pay the troops.<ref name="Gaettens_Price" />

	The "RKK-scheine" were designed to place the entire burden of the occupation on the country in which they were issued and to prevent any indirect drain on German stocks or diversion of German production arising from an unrestricted filtering-back of notes into the Reich. In addition, it was anticipated that the influx of the notes into circulation would alleviate the temporary shortage of local currency resulting from panic hoarding and the exodus of refugees from the area. This proved to be the case, particularly in Poland and Belgium, where the central banks followed the established governments into exile and took the note supply with them.<ref name="Trends_Germany">Military Intelligence Division. [http://www.lonesentry.com/articles/ttt/german-currency-occupation-wwii.html "German Currencies in Occupied Countries"] (text, [http://cgsc.cdmhost.com/cgi-bin/showfile.exe?CISOROOT=/p4013coll8&CISOPTR=3096&filename=3085.pdf pdf]), ''Tactical and Technical Trends'', No. 37, November 4, 1943. Referenced 2010-11-28.</ref>		The "RKK-scheine" were designed to place the entire burden of the occupation on the country in which they were issued and to prevent any indirect drain on German stocks or diversion of German production arising from an unrestricted filtering-back of notes into the Reich. In addition, it was anticipated that the influx of the notes into circulation would alleviate the temporary shortage of local currency resulting from panic hoarding and the exodus of refugees from the area. This proved to be the case, particularly in Poland and Belgium, where the central banks followed the established governments into exile and took the note supply with them.<ref name="Trends_Germany">Military Intelligence Division. [http://www.lonesentry.com/articles/ttt/german-currency-occupation-wwii.html "German Currencies in Occupied Countries"] (text, [http://cgsc.cdmhost.com/cgi-bin/showfile.exe?CISOROOT=/p4013coll8&CISOPTR=3096&filename=3085.pdf pdf]), ''Tactical and Technical Trends'', No. 37, November 4, 1943. Referenced 2010-11-28.</ref>

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	The crisis entered its critical phase, when the Austrian ''Kreditanstalt'', the most important bank in Vienna, and one of the major international banks, suspended its payments in May 1932. In Germany, the collapse of the ''Nordwolle'' group led to a run of foreign investors on the ''Darmstädter und Nationalbank'', which was strongly associated with the group. The bank fell after Reichsbank stopped extending further credit to it, and practically the whole German banking industry collapsed, with consequences felt around the whole world.		The crisis entered its critical phase, when the Austrian ''Kreditanstalt'', the most important bank in Vienna, and one of the major international banks, suspended its payments in May 1932. In Germany, the collapse of the ''Nordwolle'' group led to a run of foreign investors on the ''Darmstädter und Nationalbank'', which was strongly associated with the group. The bank fell after Reichsbank stopped extending further credit to it, and practically the whole German banking industry collapsed, with consequences felt around the whole world.

	In January, 1933, has unemployment exceeded 6 millions, helping the NSDAP to victory. Adolf Hitler became the Chancellor. Schacht returned to the positions of the president of the Reichsbank and the minister of finances.		In January, 1933, has unemployment exceeded 6 millions, helping the NSDAP to victory. Adolf Hitler became the Chancellor. [[Hjalmar Schacht]] returned to the positions of the president of the Reichsbank and the minister of finances.

	To finance the public works projects of the Reichsautobahn (Imperial Highway), Reichspost and Reichsbahn, a number of new loan instruments (the 'Wechsel') was created. Accepted by several institutions, the Reich should redeem them out of future incomes, that should increase, when the economy would improve. The unemployment has in fact decreased:		To finance the public works projects of the Reichsautobahn (Imperial Highway), Reichspost and Reichsbahn, a number of new loan instruments (the 'Wechsel') was created. Accepted by several institutions, the Reich should redeem them out of future incomes, that should increase, when the economy would improve. The unemployment has in fact decreased: