The great depression 2 of 6 European front

Farm co-ops acts like how the present day OPEC controlled the price of petroleum. The co-ops would buy large volumes of commodities when prices decline and sells inventories when prices start climbing too high. Because of this, farmers expected prices of wheat to stabilize, so they planted more. However, prices of commodities kept falling regardless on how farm co-ops try to stabilize prizes. Since farmers began planting more, this translated into huge surpluses that the Federal farm board depressed prices further by selling all these unexpected surpluses. The worldwide economy still continues to contract no matter how authorities try to remedy the problem.

The depression was not exclusively started by the USA, It is a worldwide crisis.
Germany suffered as much as the United States as it is burdened by heavy demands from the allies prior to the end of the war. Germany was forced to pay war damages to countries such as the UK, France and Italy. Its ports were blockaded by UK ships and the Ruhr area, one of its major industrial centers was seized by France. This was according to the allies, a way to prevent Germany from waging wars in the future. These demands choked Germany from achieving a smooth recovery. To realize reparations, the allies allowed Germany to postpone payments until her economy is capable to pay. However, during the early 1920s Germany suffered a major inflation that left the mark worthless. It became impractical to carry it since it takes a huge box to house a value that can be exchanged for a cup of coffee. Nobody can truly tell the exact cause for the hyperinflation. One of the causes could be that workers are paid so frequently that as soon as they receive their salary; it is quickly exchanged into something that retains value longer than the paper marks.

This berserk activity increased the rate of demand and pushed prices higher. Another might be that the Government itself could have deliberately inflated its currency so that neither of the allied members gets full reparation money. The hyperinflation can’t be traced purely by saying that the government simply printed more money. There would be a mix of monetary and fiscal policy that favors heavily towards banks to flood the economy with more loans therefore increasing consumer demand. Another is a fiscal or government policy that favors inflationary measures to attain a surplus. Inflation can be used as a government tool to levy a hidden tax to its citizens. As people started receiving more marks, merchants received a flood of demand thereby increasing prices wildly. This would prompt the government to print more money to compensate for newly created value. Germany left the gold standard so their currency is not bound by the limiting printing activity gold can deliver. The out of control inflation was ravaging like wildfire and the government even fed it with more fuel by printing money to keep up with rising commodity value and in return, destroying the value of an individual Mark.

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