Germany After WWI
Ok, so the biggest concept that you should get on this page is hyperinflation. Yes, it can be super complicated but I will get you through this.
Hyperinflation (and its consequences) is perhaps THE reason why Hitler was able to rise to power.
Banker counting enormous stacks of money. While this looks awesome, it is a terrible sign of what's to come.
Concept #1: Supply and Demand
In the video, nobody is selling bananas. since a ton of people REALLY wants bananas, the hero guy gets bananas and starts selling them at a high price.
This is because the DEMAND for bananas is HIGH.
Scenario:
"I just want bananas! I'm willing to pay a crazy amount of money just to get one!"
In today's stores, you can buy a single banana for like 25 cents. However, if we didn't have bananas available and there was a high demand for them, someone could then sell them for much more.
If there are a low supply and a high demand, prices go up (This is why diamonds are expensive).
If there is a high supply and low demand, prices go down (this is why popular sodas and candy are affordable and super easy to find and buy).
In this video, we see that Spongebob is trying to sell a rare Pretty Patty. He does not have any customers (yet) and since he is the only one making them, the supply is low.
Scenario:
Once he does get a customer (after he laughs at him), the customer enjoys it so much that he tells everyone around him that the Pretty Patty is a MUST, and that everyone should experience it.
You notice quickly that there is a low supply but a high demand. This is when Spongebob and Patrick can decide how much they should sell the Pretty Patty. They made so much money that they were giving customers some!
However, Mr. Crabs was hurting. This is because there was a high supply for Krabby Patties, but low demand. Therefore, Krabby Patties now have less value than Pretty Patties.
Concept #2: Printing Money
Video Breakdown:
"Uh, why are we watching these videos?" Great question. Germany printed an unbelievable amount of money to pay off the enormous debt they had. Remember, the Treaty of Versailles required Germany to admit 100 percent responsibility for the war. Know what that means? They are expected to pay back 100 percent of all the damage they admitted to creating.
To put it simply, that's... not good. It took 91 years for Germany to fully pay off their World War I debt.
This leads me to the main point of why you watched the printing money video. As you noticed, the scenario highlighted is a person getting more money than before. Therefore, he went to Walmart to purchase a super nice iPad.
However, everyone (remember the Spongebob video?) wanted an iPad too! Walmart can no longer keep up with selling the iPad at the cost they originally had (because everyone could easily afford it). Sounds awesome, right? Not quite.
Walmart then would decide to raise the price so that it could match the new demand for the product. This means that the value of the dollar is significantly lessened. Let me break this down for you:
An iPad Pro right now costs $800. That is with how much money we have right now. However, if our country printed a ton more money and gave every working citizen a raise, everyone would now be able to easily afford to buy an $800 iPad. Since everyone can, most people would go and purchase one. That means Walmart would be expected to sell an unbelievable amount of iPads, which is not sustainable. High demand, and (eventually) a low supply. <--- This would naturally raise the cost.
Therefore, Walmart would then make the price higher to meet the demand for how many people can then afford them. That means that the $800 iPad that you can buy right now would be significantly more expensive after printing more money. This means that while you make more money, the cost of everything goes way up too. Which leads me to the largest reason why Germany was enamored with Adolf Hitler.