As far as the average soldier in the trenches was concerned Germany was absolutely not loosing the war. In fact, the German army had recently made gains on the Western Front due to a surge of troops being transferred from the East after Russia's surrender. As for people in Germany, there would be no reason to see the war as being lost as Germany its self had not even been invaded, the front was in France and Belgum, when the war is so far away and the lines are either not moving, or moving slightly in your favour there would be no reason for many average Germans to believe they "lost" the war.