Up until Hitler took over, Germany was in terrible shape. How did they go from a country in one of the worst depressions in the world to a military super-power in less than 10 years?
Basically:
Hitler sacrificed everything, including hard currency reserves, to build military infrastructure in the hopes that the war would pay off.
Hitler hoped to seize tons of gold from Austria and Czechoslovakia (which he did).
They miscounted unemployment numbers to make it look like unemployment was dropping, and removed soldiers from the list (where most of the people went for jobs). Basically, a lot of unemployment went down because people were "employed" into paramilitary groups and the army.
Schacht was competent, but after his removal the German economy continued to burn itself out building a war industry.
Some advancements were made in the economy thanks to the building of public projects, but it wasn't substantial enough to suspend military expenditures.
That about sums it up.
Adrian Tooze's The Wages of Destruction provides an excellent overview of the Nazi economic 'miracle'.