Answer:
ExplanThroughout the war, the value of the German currency, the Reichsmark, fell considerably. In 1914, one British pound was equal to twenty German marks. In 1919, one British pound was equal to 250 marks. To try and meet the requirements of government spending and alleviate the post-war situation, the government had little choice but to print more money. This in fact made the inflationary situation worse and again reduced the value of the Reichsmark.
Meanwhile, in the midst of this economic crisis, Germany continued to attempt to pay the reparations as dictated by the Treaty of Versailles. The reparations had to be paid in gold marks, which maintained its value, whilst the German currency declined. This made it more and more expensive to pay.
In 1922, Germany requested permission to suspend their payments whilst their economy recovered. This was refused by the Allies. By 1923, Germany reached breaking point as inflation started to run out of control. They were unable to continue paying reparations.
On the 9 January 1923, in response to the lack of payment of reparations, France and Belgium invaded the Ruhr. The Ruhr was a region of Germany which contained resources such as factories. The French and Belgians intended to use these resources to make up for the unpaid reparations.
German factory workers refused to co-operate with the occupying French and Belgian armies. With the German governments support, the workers went on strike. The French sent in their own workers, and arrested the leaders of the German strikers and the German police. This led to violence on both sides.
With the French and Belgian occupation of the Ruhr, goods in Germany became even more difficult to obtain, and therefore very expensive. To fix this problem and pay the striking Ruhr workers, the government again printed more money. This led to hyperinflation.
By the autumn of 1923 a loaf of bread cost 200,000,000,000 marks. Workers paid by the hour found their wages were worthless, because prices had risen since they began their shifts. The situation was critical.ation:
