Germany's eagerness to embrace Nazism, and again launch a war is due in major part to the terms of the peace treaty. Keynes correctly predicted that it would cause Germany to take up arms again. The terms imposed left them no chocie. If you give people no hope, then death is an acceptable, if not welcome alternative. And they might well have won.
I was watching a History channel documentary recently during Civil War week. It said that the mortality rate in the Civil War, in today's population, would equate to SIX MILLION dead, with at least an equal numer of casualties, today. Would we be willing to pay such a price today?
If you've ever seen "Chariots of Fire: the opening scenes, which show the impact of the war dead, and the disfigured survivors, is among the most powerful expressions of what England went through.
I disagree with Keynes.
The terms of the surrender were militarily humiliating, but did not necessarily remove hope.
A lot of commentators do not seem to realize exactly what was at work in the Versailles Treaty.
The victorious powers knew that Germany's industrial base was still intact at war's end and that Germany would have a swift economic recovery and be able to rearm in short order, to begin the war again.
They also knew that France's industrial and agricultural base was deeply impaired.
So the goal of the reparations/demilitarization was that Germany would transfer its military budget to industrial output to pay off the reparations - the proceeds from reparations would rebuild France's industrial base (and also its military capability) while the demilitarization would give France the time it needed to regroup.
The goal of the Versailles treaty was primarily to restore the "natural balance" of power between France, Germany and Britain - not to deprive Germans of hope.