The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class Paperback – March 3, 2015

Purchased this book expecting to understand the underlying conditions and economics that led to the infamous hyperinflation of Weimar Germany. Through ~125-150 pages there was nothing but politics and history of the WWI. If this is what I wanted, I would have bought a WWI book instead. Stopped reading around 125-150 pages.

Frederick Taylor is a historian, not an economist. In "The Downfall of Money" he writes a history of Germany from 1914 to 1925 through the lens of the great inflation that befell that country. For example the German Mark falls from 4.2 to the dollar in August 1914 to nearly 7 trillion to the dollar by the end of 1923. He tells the story of how an ordinary wartime inflation which occurred in all of the major combatants turned into a hyperinflation in the postwar era as Germany was weighed down by reparations payments along with a social democratic imperative to fund the welfare state.He tells the story as to how the inflation impacted various stratas of society with big winners and big losers. The losers were well represented in the German middle-class who patriotically bought war bonds that were to become worthless and for many of them their wages failed to keep up with the inflation. The winners were farmers who held real assets and saw their debts erased by inflation along with the great industrialists who witnessed a stock market boom and the elimination of corporate indebtedness. By the end of the inflation the entire domestic debt of Germany was eliminated. To be sure the external debt was enormous.Along the way we witness the rise of the Freikorps, the killing of Rosa Luxemburg and Karl Liebknecht and the assasination of Walter Rathenau, a Jewish industrialist who served as foreign minister. There is also a cameo appearance of a demobilized corporal who would one day rule all of Germany.Harris certainly has a feel for the history of the period. However, I only wish he would have integrated charts and tables in the text in order to get a better understanding of what was going on in the macroeconomy. Further he should have spent more time discussing the stabilization program that came in 1924 that broke the inflation and of its consequences. Nevertheless the book is well worth the read.

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.

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.

Most readers are aware of the hyper inflation that ravaged post World War I Germany but few understand the causes. This book does an excellent job explaining the government policies that resulted in this economic calamity. The book is also written in terms that readers unfamiliar with economics are able to understand.

Frederick Taylor has done a fine job of explaining the hyperinflation of Germany after WWI with historical facts that led to the Nazi era. there are also many sidebars showing the impact of the inflation on average Germans. I like especially the reference to John Maynard Keynes and his earlier prediction of what the peace treaty's impact would have on Germany.

this book was an insightfull and a really good read!I was a child, growing up in Germany after the 2nd world war and could identify with a lot of stuff in this book, especially the loss or exchange of money. It also gave me an insight of how and why Hitler came to power at that time in Germany and how the German people suffered after the 1st world war. After the 2nd world war (which in my view was a continuation of the 1st) the German people continued to suffer. My family were refugees from the East (now Ukraine) into Germany and were very very poor .and had to beg for food, mostly from the farmers

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".

Anyone who wants an insight in to the machinations of central banks and currency manipulation should read this book. It is very relevant today when we are witnessing ever desperate central banks maipulating fiat currencies in ever more dubious ways. Nobody ever seems to learn - lets hope messers Yellen and Carney have read it.The writing style is clear and makes the twists and turns of the markets and political events very accessible, complex though they were. Fredrick Taylor is a first rate narrator.

Good insight into the troubles in Germany during and after the first world war. What was attempted then by Germany to ensure that most European countries were totally dependent on Germany seems to have come true in the 21st century without another conflict. A good read though, highlighting some interesting historical facts about Germany its people. Recommended

This reader has always been interested in the period between the two world wars. Having read Erik Larson’s ‘In the Garden of Beasts’, Christopher Isherwood’s ‘Goodbye to Berlin’ and several books on Hitler, the true history of the period was still as indecipherable as the Bayeux Tapestry from 100 yards and I was none the wiser as to the REAL reasons why a second World War could have followed on so quickly from its predecessor. The Downfall of Money allowed me to walk up close and examine each thread of the tapestry in fine detail.It’s not an easy story to tell, but Frederick Taylor has done a masterful job. The depth and breadth of research required to make sense of the unfathomable takes a keen eye. And the ability to make it palatable to someone who is neither an economist nor an historian takes the skill of a good storyteller. The result is a Schwarzwälder Kirschtorte of rich delights. This isn’t a book that can be read in large helpings, because there’s a lot to take in and process. I dipped in and out of it over a four month period, but thoroughly enjoyed every slice.My particular interest is Hitler’s rise to power. Those elements that brought this about were as random as the roulette table. It was the perfect storm. Hyperinflation followed by depression. The wrong people getting assassinated. The right people getting assassinated. Leniency shown where it shouldn’t have been. Given a longer prison sentence in 1924, Hitler never could have gotten his snowball rolling. But this book isn’t really about Hitler. During the crucial period between the Armistice and 1923, a cast of characters previously unknown to me (Rathenau, Stinnes, Stresemann, Ebert, Ludendorff, Helfferich etc) tried in vain to steer their defeated nation through the economic fallout caused by impossible reparation demands, political jockeying between right and left, dire food shortages and, not least of all, galloping inflation that saw the value of the Mark against the dollar rise from 4.9 in 1914 to 4.2 trillion at the end of 1923.The Downfall of Money isn’t light reading but I’d recommend it to anyone.

a superb an exceptionally well researched and written history, of why hyperinflation occurred in Germany the aftermath of the first world war set against the world political backdrop of the time. thought provoking and informative, anyone interested in social history when money becomes worthless should read this book. in fact, anyone should read it who has an interest in their personal wealth and how it can disappear in a flash when the perfect "economic storm" occurs.