Economics: Germans and Inflation

The German experience is two-pronged. Most Germans do have a cultural aversion to inflation because of those folk memories of the 1920s. But it's not quite true that the hyperinflation ushered Hitler to power. Berlin brought it under control by the late '20s and found a disciplined way in the '30s to print money without causing inflation. Offensive as it sounds, that's one thing the Nazis did right.

Largely because of a central banker named Hjalmar Schacht, who served before Hitler as well as under him, the German economy recovered briskly after 1933. Hitler combined a policy of government-printed money (through Schacht) with a feverish public-works program that provided both jobs and new infrastructure, like a modern Autobahn.

“Within two years, Germany's unemployment problem had been solved and the country was back on its feet,” writes Ellen Hodgson Brown, a lawyer and author of Web of Debt. “It had a solid, stable currency, and no inflation, at a time when millions of people in the United States and other Western countries were still out of work and living on welfare.”

Schacht argued that the difference between the growth of the 1930s and the hyperinflation of the 1920s was the use to which the printed money was put. In the '30s, it was productive stimulus. In the '20s, it paid for speculation and debt. [Emphasis added].

From Germans and Inflation by Michael Scott Moore, July 28, 2010, at Miller-McCune.