Why was the lack of foreign currency a big problem for the Third Reich?

by UnderwoodF
white_light-king

To put it simply, the Third Reich wanted to buy things from foreign economies, like oil, chrome, manganese, rubber and food.

A state with totalitarian powers doesn't need "real" money to acquire resources or manufactured goods on it's own territory. It has many means to compel (or persuade) their production or acquisition, including printing money and setting prices by law. However, anything that is required from outside a state's territory needs to be paid for in something of real value. The economy of Nazi Germany did not produce a lot of goods that would be exported for foreign currency, they generally needed all goods produced domestically for domestic consumption or military preparedness.

In occupied territories (i.e. France 1940-44) the Germans could get around this for a while by setting an unfair exchange rate backed up with the threat of force. This exchange rate insured goods would flow mostly from France to Germany. In effect, setting up a "legal" mechanism for plundering occupied territory. In the east, no pretense of legalism was typically employed, especially after 1941.

For sorta friendly states like the Soviet Union between 1939-41, the Germans and Soviets bypassed the currency exchange issue in effect by reverting to a barter system, in which precise exchanges (the Germans sent specified quantities of machine tools and finished goods and the Soviets sent raw materials.) were worked out by diplomats according to a schedule. Of course, the Germans ended up not delivering many goods on schedule.

Germany's raw material shortages caused immense difficulties during the war. Producing synthetic rubber for example, took huge amounts of extra labor, factory space and energy compared to importing it.

Germany's lack of foreign currency was a serious problem in the build up to the war, and in it's early stages. By the end of the war, the Allied blockade and encirclement became so intense that it wasn't as relevant. Germany could not expect to receive any resources from areas outside it's immediate control.