ABSTRACT
The crisis had blown up suddenly in the wake of the Korean War which broke out towards the end of June 1950. It was feared that hostilities would spread and produce a confrontation between the Western Allies and the Communist countries, leading to a cataclysm of world-wide proportions. Consumers in many countries, including Germany, rushed to buy what they could; manufacturers and traders also sought to lay in stocks, especially as wholesale prices, which had been falling, started to turn upwards; and governments from the autumn onwards embarked on an all-out effort of rearmament which strained and distorted their domestic economies and created new international imbalance.
