Weimar Inflation in America

[formercia]

http://www.kitco.com/ind/Turk/turk_may262008.html

May 26 2008 10:00AM James Turk

The newly formed German government, named for the city where their constitution was drafted after the Kaiser’s abdication in 1918, kept pumping up the money supply. The process started relatively slowly, but quickly the pace of money creation accelerated.

The Weimar government was paying its bills on credit – just like Zimbabwe is now doing. The Weimar government was issuing currency in exchange for valuable goods and services that it was receiving, and the vendors of those goods and services accepted the newly issued currency in the expectation that they would be able to exchange it for goods and services of like value. However, they soon realized that they were deluding themselves. Prices were rising rapidly, with the consequence that a flight from the currency into commodities and other tangibles began.
--snip--

For example, in his classic book, “Paper Money”, penned three decades ago under the pen name of Adam Smith, George J.W. Goodman recounts the story of Walter Levy, an internationally known German-born oil consultant in New York. Levy told him: “My father was a lawyer, and he had taken out an insurance policy in 1903. Every month he had made the payments faithfully. It was a 20-year policy, and when it came due, he cashed it in and bought a single loaf of bread.”

--snip--

[mac2]

1. And we aren't supposed to call them Nazis?

The young may recover but the older, hard working all their lives seniors will not. That is a large part of our population today. The Baby Boomers have been robbed of their life long savings and promise of old age pensions by Greenspan and the Bush gang.

[formercia]

2. The collapse of the Weimar Republic and resulting Depression

provided the environment for the NAZI takeover. It was an engineered collapse, just like the one that is occurring in this country today.

[mac2]

16. Same Bush crime gang.

[no_hypocrisy]

3. The Weimar Republic was motivated to take the inflationary steps due to the

draconian terms of the Versailles Treaty that Germany was forced to accept. The main financial goal of the Treaty was for Germany to pay restitution to England and France and Belgium for "destroying" their infrastructures through the prosecution of war. But behind the restitution were American bankers who loaned the money to France and England to fight Germany and they wanted their money back and guaranteed.

The Weimar Republic certainly didn't have that kind of money in reserve, the economy was in shambles, and the Allies didn't want to renegoiate payment terms. Rock and hard place.

So when Weimar began to print Deutschmarks that had no value, they technically were honoring their promise to the Treaty, only thing was that the money had a lessened value until the paper meant nothing.

And BTW, it was the American financiers who wouldn't let Germany pay less or have more time to come up with the money it had to repay.

[Jim__]

4. I agree. I think the editorial is mostly bullshit.

Yes the US has serious financial problems now, and those problems are going to get worse in the near future. But, those problems are nowhere near the problems of Weimar Germany. And, the underlying cause of the Weimar Republic was not a "fiat" currency, but war reparations that it could not possibly pay. To ignore the war reparations when talking about the Weimar inflation is ridiculous. Keynes walked out of the Versailles Peace Conference because he knew what those war reparations meant.

[formercia]

5. War reparations

The money that was lent to us by China and others to prosecute an illegal War of Aggression. Treaty, bonds, contracts, it doesn't matter what the vehicle, it has to get paid.

[Jim__]

6. You're completely missing the point.

The point is that the editorial claims that the Weimar inflation is due to a "fiat" currency. Actually, the Weimar inflation is due to war reparations imposed from outside of Germany. The currency decisions were not actually in the hands of the German government.

Is the Iraq War responsible for much of current US financial troubles? Yes. But, it's not in the same league as the problem in Weimar Germany. And, the US currency is in no where near the trouble that the German currency was. The US will experience serious financial problems. But, the US will probably be able to address those problems. Our problems are under our control. The problems in the Weimar Republic were not under Germany's control. Huge difference.

[Doctor_J]

7. It's not yet where the Deutschemark was, but could easily be driven

to that level. the Nazis deliberately ruined the dm just so they could pay their Versailles settlement in worthless paper. I am 99% certain that the inner circle of the BFEE have all completely divested themselves of dollars, and non-death-related stocks (war and health (non-) care are the only two growth industries when the Repukes are in charge). By printing/borrowing more money, they'll wiping out the last of the assets of the rest of us, while making our debt worthless to those whom we owe.

[Jim__]

8. Hyper inflation hit the Weimar Republic in 1923 - the Nazis had nothing to do with it.

The war reparations, coupled with a worldwide deflation (aggravating the effects of the war reparations), and then the occupation of much of industrial Germany by France because of Germany's inability to pay were the main causes of the German hyperinflation.

[formercia]

10. Von Papen lobbied Hindenburg in 1933 to appoint Hitler Chancellor

Von Papen was a Synarchist allied with the Industrialists, Church and Bankers. He needed Hitler as a front man, so that when the shit hit the fan, his gang wouldn't be blamed for the mess. It's much the way the same gang is using the Bushes as front men.

[Jim__]

11. Hyper inflation hit Germany in 1923. Hitler had nothing to do with it. - n/t

[formercia]

12. I didn't say the Nazis caused the depression un Weimar Germany.

The chaos caused by the depression and open warfare between the communists and right-wingers created the conditions that allowed the NAZIs to come to power. Until Von Papen promoted Hitler, the NAZIS were just another street gang.

[Jim__]

14. I'm not getting your point.

The German hyperinflation occurred in 1923. From 1924 - 1929 economic stability returned to Germany (its known as the Golden Age of Weimar). Are you saying that the hyper inflation of 1923 led to Hitler's rise to power 10 years later? How did the intervening years of prosperity affect that?

I agree that the US has serious currency and financial problems. I just don't see any real connection to Weimar. Yes, Weimar hyper inflation was an inflationary period for Germany, and our current currency problems are leading to an inflationary period in the US. The 2 period are similar in that way. But, that's a somewhat superficial similarity. The causes of the inflation are largely different. There is no country in the world that can occupy a part of the US today. France's occupation of the Ruhr was one of the main causes of the German hyper inflation.

To my mind, the editorial misrepresents the American currency problem when it connects it to Weimar. I haven't seen anyone legitimize that connection yet.

[mac2]

20. Just another street gang like now.

[formercia]

27. Junior would otherwise be a failed alcoholic businessman.

oh, wait, he is, except on a much grander scale.

I guess if the boys were out to destroy this country, they picked the right guy.

[uberllama42]

9. The government doesn't have direct control over the money supply

The Fed controls how much money is in circulation. I really don't think he's party of any conspiracy to destroy our currency. He may be a crappy Fed Chairman, but he's not going to hyperinflate our currency.

[Doctor_J]

13. I don't believe the Fed is independent from the WH any more

It was when Clinton was president, but the BFEE has corrupted everything that has to do with our government. The Judiciary is supposed to be independent from the Executive too, remember? It seems pretty clear to me that the current group of money men is trying to hand over the financial disaster to the next president (Obama).

[mac2]

19. Obama won't impeach or try them either.

They get to walk out of office with their bag of plunder and big jobs.

[mac2]

21. No the huge debt we have does that.

The feds let that happen under Bush and don't speak out. "Minor recession" my foot.

[mac2]

17. By many generations out just like the Reagan Cold War debt.

[mac2]

18. Not near as bad but headed there none-the-less.

Huge debt, aggressive war, and destruction of freedom for Empire.

[mac2]

15. I have often wondered if WWII would have happened at

all if not for the world bankers. They profitted by finanicing the military industrail complex. Germany and Japan were both broke yet built huge war machines.

The Nazis build huge prisoner of war camps in Poland for the European Jews. It was financed by Bush's grandfather. Roosevelt threatened to deport him if he continued the loans. Why didn't he do it?

As a kid watching the war/news, I wondered where they got all that money. It was upsetting to see all those lives and cities ruined.

[Raster]

22. War is a good business....for some.

Weapons manufacturers, undertakers and politicians. The rest of us just suffer through it all.

[mac2]

23. In the book about American history for the people by Howard Zinn

he talks about the head of GE saying he wished the war(WWII) would last forever because they were making such huge profits. The workers and tax payers certainly weren't. In fact the workers were warned of treason and jail when they protested the huge profits not being shared.

War profiteering is illegal in this country yet they ignore it.

[Raster]

24. Ignore it? War profiteeing in this country IS BEING REWARDED!

[mac2]

25. They ignore it is going on.

Good job Cheney, Rice, Rumsfeld, etc. I agree to the Hague.

[Grinchie]

26. If Anyone Is Interested...

http://video.google.com/videoplay?docid=-515319560256183936

3:50 Hours long, but it covers about everything that you need to know about Money and Power, and why we are doomed.

Curl up in a comfy chair and learn.