Throughout history there have been two basic types of depressions:
<ol>
<li>Depressions caused by deflation</li>
<li>Depressions caused by inflation</li>
</ol>
The last depression in the United States was caused by deflation. During exactly the same time period, Germany experienced a depression caused by inflation.
One of the reasons the U.S. depression was caused by deflation was because the U.S. dollar technically still had real value. It was money backed by gold and silver: receipt money. Receipt money was basically a paper receipt for gold or silver supposedly held in the vault of the U.S. Treasury.
After the stock market crashed in 1929, fear spread, American people hung on to their dollars, the economy deflated, businesses closed, people lost their jobs, and depression set in. The government did not print money to solve the problem because it was technically illegal to do so—although the government did stretch some rules. Savers were winners in this case because money was scarce and still had tangible value. A depression was caused as deflation set
The reason the German depression was caused by inflation was because Germany's money was no longer real money. It was Monopoly money, IOUs from the government—fiat money created out of thin air.
Since the German Reichsmark was merely Monopoly money—a piece of paper with some ink on it, backed by nothing—the German government just kept the printing presses running. It was the German government's way of solving its financial problems. Savers were losers because money was worth less and less as more and more of it was pumped into the system. A depression was caused as inflation set in.
— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich
