While the Constituent Assembly of 1919 approved the constitution of the nascent Weimar Republic, the victorious powers of World War I, enjoying strong economic growth in the 1920s, imposed extremely harsh and oppressive conditions on Germany in the Treaty of Versailles.

In addition to the obligation to cede parts of its territory to Allied occupation and the imposition of almost total disarmament, there was the punitive desire of many governments, especially France and, to a lesser extent, Great Britain, to impose sanctions and unsustainable war reparations on Germany, the amount of which was set in 1921 at 132 billion gold marks, or 33 billion U.S. dollars, to be paid over 60 years at 5% interest. The potential consequences of this situation were not lost on the young economist John Keynes, who was present at the negotiations as an advisor, resigned from the British delegation, and upon his return wrote a book accusing the leaders of the victorious countries of serious short-sightedness. Keynes argued that the economic and financial problems associated with reparations had been underestimated and concluded that the imposition of such heavy reparations was neither reasonable nor realistic and would ruin not only Germany but much of Europe, whose prosperity depended on trade and commerce. Faced with the victors' intransigence, German negotiators found themselves on the defensive. After further attempts to renegotiate the terms imposed, Germany chose not to cooperate and suspended the payment of reparations in kind, in the form of coal and iron from the rich mines of the Ruhr.

While these obligations and impositions strengthened German nationalism and the spirit of revenge among the most reactionary forces, German resentment was exacerbated when French troops occupied the Ruhr, the source of coal for German industry, in January 1923. Germans in the region responded with passive resistance and work stoppages. The lack of coal and the cost of the heavy expenditures to help their compatriots, finance passive resistance, or continue to pay their salaries led the German government to authorize the printing of large quantities of paper money, with the result that the mark quickly became worthless. Inflation spiraled out of control that same year, when it took 4 trillion marks to buy one dollar, leading to exponential price increases. At the most critical moments, workers received their wages daily and rushed to spend them immediately before inflation devoured their value. With such inflation, the war debt was virtually wiped out in the public finances, but millions of families saw their savings go up in smoke, with inevitable social consequences. Unemployment reached 20% of the workforce.

The German ruling class tried to respond, and in 1923 Chancellor Gustav Stresemann implemented a reform to revalue the mark then in circulation, replacing the old Papiermark with the new Rentenmark, whose value was guaranteed by Germany's agricultural and industrial assets. At the time of the changeover, one new Rentenmark was worth one billion old marks.

Thanks to the new and cautious deflationary policy, based on limiting credit and public spending and increasing taxes, an agreement was also reached with the victors on war reparations. Under the plan drawn up in the spring of 1924 by the American politician and financier Charles Dawes, Germany was granted more reasonable terms for the payment of reparations and an international loan, largely subscribed to by American banks attracted by high interest rates.

Within a year, the old marks were replaced by the new Reichsmark, guaranteed by the specially created Reichsbank. A slow recovery began that depended exclusively on foreign financing, but it came to an abrupt end with the crisis of 1929, when the depression in America, caused mainly by overproduction and exacerbated by stock market speculation, put an end to the financing of Germany, causing many to return to the United States.

This led to another serious economic crisis, compounded by strong social unrest and a widespread sense of frustration, which led to the fall of the government and a radicalization of political ideas that paved the way for tendencies inspired by the most extreme nationalism.

The support of big industry, farmers and the army for the National Socialist Party made it the leading party in 1932. In 1933, Adolf Hitler was charged with forming a new government. Between March 23 and July 14, he assumed full power and established a totalitarian, one-party state.

Between 1933 and 1939, Hitler's domestic economic policy was aimed at rearmament and the execution of major public works.
Thanks to the resumption of production by large manufacturing industries and significant economic progress, domestic consumption began to recover, leading to a noticeable drop in unemployment, which helped to maintain and increase support for Nazism.
Beginning in 1933, rearmament spending steadily increased in the national budget until 1936, when it spiraled out of control. The Nazi government forced companies to consolidate, causing small businesses and artisans to suffer and many to close.

Due to the weakness of the mark throughout the 1930s, and to prevent currency from leaving the country, in 1933 Germany began signing agreements with countries with weak economies to export finished goods, such as weapons and machine tools, and import food and raw materials. In effect, it was a barter economy that always had to have a zero balance.
In reality, Germany accumulated heavy debts for imported products, while the quality of its exports steadily declined. This system was also applied to the occupied countries during the Second World War.

When Austria was annexed in 1938, the "barter" system was supplemented by another instrument of financial pressure, since Austrian banks were the main credit intermediaries in Southern Europe.

Despite all these devices, it was impossible to finance the enormous costs of rearmament because Germany had little foreign currency and its gold reserves were almost exhausted by 1936.
At this point, the German government had only two choices: either stop the arms race and return to the global capitalist spirit that had passed from the British to the Americans, or plunder the countries it occupied through rapid conquest.

Bibliography:
The Price of Annihilation: The Rise and Fall of the Nazi Economy by Adam Tooze
Money in Space. The Nazi Planning of European Monetary Integration by Paolo Fonzi
The Economy of Nazi Germany by Charles Bettelheim