Why did the German Mark collapse
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In January 1923, French and Belgian troops occupied the industrial region of Germany in the Ruhr valley to ensure reparations payments. Inflationwas exacerbated when workers in the Ruhr went on a general strike and theGerman government printed more money to continue paying for their passive resistance.
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Solution:
Germany had to pay war reparation after its defeat in the First World War. But Germany refused to pay the reparation and France occupied Ruhr to claim Germany’s coal. In retaliation Germany printed paper currency recklessly. As a result, the value of German mark collapsed and prices of goods soared.
In December 1923, 1 US dollar was equal to 98,860,000 marks. People had to carry a cart load of currency to buy a loaf of bread. This crisis is known as hyperinflation.
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