To be sure, the Treaty of Versailles was not a Carthaginian peace as many contemporaries, most notably John Maynard Keynes, believed. Germany was not crippled as an economic power. It remained the most populous state in Europe, its industrial potential was largely intact, and with the demise of the Habsburg, Ottoman, and Russian empires Eastern Europe was now populated by small, fragile states. While on the surface reparations seemed to impose a huge burden on Germany’s public finances, Weimar’s inflation and the speculation that came with it led to a substantial net flow of capital into Germany.