Why did the German government print large amounts of money during hyperinflation?
The German government printed large amounts of money during the Weimar Republic primarily to meet its mounting financial obligations and cover budgetary deficits.12
Following World War I, the government faced severe economic pressure from the Treaty of Versailles, which required substantial reparation payments in gold-backed currency. Lacking sufficient revenue and facing an adverse balance of payments, the government resorted to the wartime practice of issuing more currency to fund its expenses.132
The situation escalated significantly in 1923 during the occupation of the Ruhr by French and Belgian troops. To support its policy of passive resistance—which involved ordering workers and employers to shut down factories—the government continued to print money to pay the idle workforce. This massive increase in the money supply, combined with a scarcity of goods, triggered hyperinflation, rendering the mark virtually worthless.241