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Opinion
Andreas Kluth

What Germans Think They Know About Inflation Is Wrong

Yes, inflation is dangerous, but deflation may be even more so, as the rise of Hitler showed.

Yes, money became worthless in Germany once. But do you really know what happened next?

Yes, money became worthless in Germany once. But do you really know what happened next?

Photographer: FPG/Getty Images

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Germans are known for angst in general, and angst about inflation in particular. After all, hyperinflation during the Weimar Republic led to the rise of Adolf Hitler and the Nazis, right? 

That collective memory has been cited countless times both inside and outside of Germany as the psychological explanation for the country’s hawkish monetary culture, and the long-standing attacks by German conservatives against the European Central Bank for its easy-money policy. Now inflation is rising again, to about 3% this year in the country, well ahead of the euro area’s rate and the 2% target of the ECB. Germans aren’t hysterical yet, but you can expect to hear about the specter of Weimar again before long.