War and inflation

Our money values are impacted and changed by the two world wars. However, we had so many wars in the past, but not a single one had more impacts on our money values like these two did. In the ancient age, especially the Medieval Age, we can see wars as business activities run by monarchies, as they fought wars based on their own interests and benefits. More importantly, they were using their own resources and abilities to fight their wars. Sometimes when they did not have enough resources, they could borrow money from bankers and businessmen at the time, then the bankers and businessmen would make their lending decisions based on how likely the lords could win their wars, as when the lords won the wars, they could take resources from their opponents. Due to the technologies at the time, the resources, including arms, spent on wars could often be recycled and the losses in sum were relatively very limited. These wars could be considered as zero-sum games.

However, in the modern era, wars are no longer individual matters, they are the activities that influence every single individual in the society; therefore, wars must be fought to the end. When a full scale war takes place, all citizens have the duties to fight for their country, then the economy is no longer in a sustainable state, as all productions of the economy are actually inputs that input into the war and there is no outputs that really makes any profits. The production is pushed beyond the limit and as long as the war continues, all available resources are put into the war and there is no sense of cost and benefit analysis. Once the war ends, resources become very limited, and cashes having in people's pockets devalues as cash was possibly the least useful resources during the war and now it is flooded in the markets. Moreover, even the winners do not often benefit from the wars, as they use all possible resources and there are not many resources left their opponents have for them to take if the wars' scales are large. Therefore, following a world war, we always see a sharp increase in the price levels on a worldwide scale.