In the previous part of our series, we dealt with a topic particularly close to us in these times – the Great Depression of the 1930s. If you haven’t read this article, we refer you to this place. However, we ended that text with news that the world was heading for war …
A “piece” of land for Germany
To fully understand the reasons for the outbreak of World War II, it is not enough for us to have a naive narrative about the fact that Germany was headed by “crazy” Adolf Hitler. Anyway, making a mentally ill Nazi leader shallow the whole story of what happened in the 1930s and 1940s.
Many rightly believe that World War II was even a kind of “extra time” for World War I. And so it really was. The first global conflict ended in the defeat of Germany, which, however, did not want to give up so easily. Despite the economic crisis, hyperinflation and reduction of the army of this fallen power, our Western neighbors still had unbridled appetite for expansion. It must not have been liked by Great Britain, which at that time was still a colossus, but already unsteady on clay legs. In the background also loomed slightly dormant power of the US, which after World War I ceased to interfere in the situation in Europe.
Poverty and poor inflation led to the fact that in Germany extreme movements began to gain popularity. We are not only thinking about the Nazis, but also the communists. It should not surprise us, then, that big industry became interested in Hitler as a politician who might be worth supporting and who will stop the communist procession with his charisma.
The very phenomenon of NSDAP and “Chief” is a subject for an article. In any case, among others thanks to favorable macroeconomic events (deterioration of the economic situation in the early 1930s) or modern marketing methods (in election campaigns, the Nazis began to use, for example, the plane, which helped Hitler spend more efficiently every day fighting for votes, and also applied for the first time a modern poster design a politician – he only depicted Fuhrer’s face on a black background), the Nazis took power in the country.
Activities that were supposed to start the economy were quickly started. They focused on extensive social policy and the expansion of the army and roads, which reduced unemployment, but also led to a jump in Hitler’s popularity. A colorful comparison to the Beatles, which we see in the movie “Jojo Rabit”, did not come from nowhere …
Added to this were Mefo bills of exchange. It was with their help that these reinforcements were financed. They also paid workers who worked in companies that produced weapons. Bills of exchange were not a type of currency, but they were accepted in banks. They actually helped in the quiet printing of money.
Fear of inflation reason for war?
In order for war to break out, several factors must converge. In the case of World War II, we can talk, for example, about further rivalry between the powers. Due to the fact that this cycle is about money spoilage, let’s focus on this aspect.
Well, the Nazis with their social and bill-related policies of Mefo led to a situation where the country was again threatened by the specter of hyperinflation. How to avoid such a tragedy? One could, for example, start a war.
Of course, armed conflict was at that time in the hands of many other countries. The USSR wanted Germany to attack capitalist countries. Great Britain – already drowning in debt – made concessions to Hitler by devouring Czechoslovakia to devour him. Everything to avoid war. However, when this proved impossible, Albion’s diplomacy did a lot to make the Wehrmacht’s impetus go east instead of west.
In any case, on September 1, 1939, the Third Reich crossed Rubicon and attacked Poland. After our country, it’s time to master Western Europe. Each conquered state was looted in such a way as to prevent the German economy from falling into the same trouble as in the 1920s and early 1930s.
World War II and Germany in the occupied territories
The Germans did not introduce their currency in the occupied territories. They kept local money or created new ones. In practice, the occupation meant such a policy that the trade balance between the Third Reich and the occupied country would be favorable for the victorious power. In other words, the Germans were supposed to take more from the conquered state than to bring there. Paradoxically, looking at the matter with accounting criteria, the Third Reich was in a way indebted to the subordinate countries, but – which is probably obvious – it did not intend to pay it back. This one was a kind of coverage of currency emissions in subordinate countries.
Another issue is the Reich Credit Unions tickets, which were paid by Wehrmacht soldiers in the occupied territories. They hit the markets during war campaigns, then they were pulled from the market and again tried to use during subsequent military operations in another area.
However, the overall circulation of money increased. inflation Efforts have been made to hide maximum prices and pay blocking. Effect? It’s probably clear – the black market was flourishing, and some people tried not to work because of the latter factor. Hence, the Germans introduced forced labor. Paradoxically, such drastic measures saved the occupied countries from outbreaks of hyperinflation. The only exception was Greece.
Banking supervision authorities were also established to manage the credit market in such a way that it would be subordinated to the occupier’s policy. Private banking belonging to Jews was liquidated.
Who financed all this?
On the occasion of the article about World War I, we mentioned that the war was financed differently by Germany and its allies, and the United Kingdom with allies. In the case of World War II, the war on the side of the latter was financed by the US.
The US Congress passed, for example, the Lend-Lease Act, under which the United States rented war equipment to “peace-loving countries.” After the war, it was to be returned to the power or destroyed.
However, the US elites knew that the conflict was a great opportunity for their country. The growing and necessary debt of Great Britain was to lead to the practical fall of this country from the league of powers. The scale of the economic defeat of the Kingdom can be demonstrated by the fact that in 1939 it had gold reserves worth approximately USD 4.5 billion. Thanks to the extraction of ore in Africa, it has managed to accumulate resources worth around USD 2 billion. However, after only a year these stocks were running out. This is best reflected by how expensive the war was
The latter came to an end in 1945. Effects? The US and USSR have grown into the roles of world powers. Great Britain remained an empire, but only on paper. Although its politicians sat at the table on the powers’ side, the country itself ceased to be the power it had before. The world was moving towards political and economic bipolarity.
The US has decided to take full advantage of its new position. Therefore, even before the official end of the war, work began to create a new financial order. This was to prove a period over “and” in the matter of building power by the US. We’re talking about the famous Bretton Woods system. However, we will write more about this in a week …