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Is Ben Bernanke The Second Coming Of Rudolf von Havenstein, The Central Banker Responsible For Germany's Hyperinflationary Collapse (And Ostensibly WWII)?
SocGen's Dylan Grice provides a gripping account of Germany's hyperinflationary episode, in which he charts the extended parallels between not just the precursor economy that lead to a 16,579,999% inflation in 1923 Weimar Germany, and modern day developed (and highly leveraged) countries, but between Germany's then central banker Rudolf von Havenstein, and the Greenspan-Bernanke duo. And while we know how "der Geld Marschall's" Weimar experiment ended, the future before the U.S., as a result of the Maestro's (both Senior and Junior) almost identical policy response is still open-ended. As the future of America is now exclusively in the hands of insidious economists, the following insight from Grice into the utility of economic models and decision-making should be sufficient to dash the hopes of any optimist for a favorable outcome.
"Is anything more dangerous than a nonsensical idea taken seriously? The esteem of economists has been dented by the financial crisis, though not so severely that the financial community treat economists? views with anything approaching the derision they deserve. The macroeconomic meme is resilient indeed! Sadly, the situation isn?t new. Macroeconomic theory has a long and
distinguished history of seducing policymakers into thinking utopia is
just around the corner, a trick brought about by untested hypotheses
masquerading as empirical knowledge. Believe it or not, a school of
economic thought that was prominent in Weimar Germany during the
hyperinflation ? and particularly at the Reichsbank as it was
aggressively monetising the government deficit ? held that the
escalating money supply had nothing to do with the exploding rate of
inflation! More on that later. For now, in this new world of policymaking experimentation, it?s worth recalling the British Ambassador to Germany?s observation on the hyperinflation that ?'no one could anticipate such an ingenious revelation of extreme folly to which ignorance and false theory could lead.'"
Hopefully, once the true span of the Great Depression v2 is grasped, once all extend and pretend measures are exhausted, modern society will do away with economists once and for all.
For those unfamiliar with the greatest failed experiment in developed world monetary policy, here is a brief primer.
For all the ink spilled analysing two of the 20th century’s greatest economic tragedies - the Great Depression and Japan’s lost decade(s) - little has been spent on arguably the greatest of them all: Germany’s hyperinflation. It may be because we’re confident we understand it. Everyone knows that unfettered money printing eventually leads to explosive inflation, don’t they? The thing is, economists knew that then! So what was going through the mind of the central bank head who presided over history’s most pathological currency debasement?
It is often said that the Great Depression so thoroughly destroyed the social fabric of the industrialised world in the 1930s that WW2 became inevitable. But this overlooks the role of Germany'?s hyperinflation, the horror of which seems underappreciated in the Anglo-Saxon world. At the height of the crisis in 1923, for example, industrial production fell by the staggering annual rate of 37%. In roughly the same single year, the unionised unemployment rate rose from under 1% in late 1922 to nearly 30%! (and according to Frank Graham, almost half of the total workforce became unemployed at this time). This, remember, is at a time when the rest of the world economy was booming.
As far as economic pain goes, this probably surpasses the Great Depression yet to come. But it only tells a part of the story: the nation?s wealth, held largely in German government bonds was completely wiped out. We can only imagine the nationwide psychological devastation of a proud Germany already feeling victimised and humiliated in the aftermath of WW1. In his ?'Ascent of Money’, Niall Ferguson quotes Elias Canetti?s recounting of his hyperinflation experience as a young man in Frankfurt, “It is a witches’ sabbath of devaluation, where men and the units of their money have the strongest effects on each other. The one stands for the other, men feeling themselves as ‘bad’ as their money; and this becomes worse and worse. Together they are all at its mercy and all feel equally worthless”. Such was the condition of Germany before the Great Depression had even begun.
Indeed, it is a tantalising counterfactual: would Germany have fallen under the Nazi spell which would ultimately lead the world to a second World War had she not borne the grave burdens of the Great Depression already exhausted, despairing and with ruptured social cohesion? We?ll never know, of course, and anyway such events are never so simplistically mono-causal. Nevertheless, it is possible that German hyperinflation played a decisive role in the build-up to WW2 and therefore logical to conjecture that the central banker who presided over that hyperinflation is the most influential figure in history you?'ve never heard of.
Next - presenting Ben Bernanke ideological father: Rudolf von Havenstein, after whom came the flood.
That central banker was a certain Rudolf von Havenstein. Born in 1857 into an aristocratic Prussian family, he trained as a lawyer and rose to become a county court judge before joining the Prussian Finance Ministry in 1890 and being appointed president of the Reichsbank in 1908. Steeped in the Wilhelmine tradition of devotion to his Kaiser and a passionate believer in the virtue of public duty, he seems to have been liked by all ? a true gentleman of the old school. Montagu Norman - then governor of the BoE - found him to be a “quiet, modest, convincing, and a very attractive man.?" [For more on the treasonous actions undertaken by Norman as head of the BOE in the 1930's click here]
Just how could such a decent, hard-working, intelligent and well-intentioned pubic servant have given birth to the uncontrollable monster of hyperinflation? How could such a paragon of public integrity preside over the largest currency debasement in financial history, quite possibly sowing the seeds for the most destructive war in the history of civilization?
He first seems to have developed the habit of monetizing government debt during WW1. With a complacency arguably similar to today?s policymakers in justifying their variously creative schemes for monetary and fiscal experimentation, the monetary expansion was justified as merely a stop-gap measure. The war was expected to be short and in any case the losers would be made to foot the bill. No one really anticipated the long and protracted conflict which occurred, or the financial burden it would impose. So by the end of the War - only 10% of which was financed by taxes - the money supply had ballooned and prices had quadrupled. Nevertheless, Von Havenstein was lauded as a public hero, decorated with honours and even nicknamed "der Geld Marschall", which sounds a bit like the ?the Maestro? but in fact translates as the ?Money General?.
Once embarked upon this path though, it became difficult to stop, especially since the early stages of inflation didn?t seem too bad. Although inflation rose by 60% in 1921, real industrial production rose by 26% and unemployment stood at only 1% of the unionized workforce. The following chart shows that at one point during this period, real share prices rose by over 100%. But then the inflation intensified. In 1922 it reached 5,300% and on the eve of currency reform in late 1923, the annual rate was 16,579,999%. How did this happen?
To call the political climate of the time merely difficult would be a gross understatement. The country was on the brink of civil war: on the far right was the vast and humiliated ex-military which, having been forcibly demobilized by the victorious Allies, had become a seething and vengeful nationalist militia; on the far left were the anti-war workers and communists, the latter inspired by the 1917 Bolshevik Revolution and aiming to achieve the same end in Germany. Meanwhile, with revolution in the air and violent street battles between these polar political opposites playing out nightly, deep-felt resentment towards the foreign powers was fermented by the issue of war time reparations, whereby Germany was required to hand over 4-7% of GDP each year until full compensation for the war-time devastation had been paid.
It?s worth noting that there has been much debate over the extent to which reparations were in fact a primary cause of the hyperinflation. Some have argued that the 4-7% budgetary burden was bearable and that the hyperinflation was actually a bluff gone wrong. The German authorities were actually trying to demonstrate just how desperate their situation was as a way to lower their reparation payments. I?m no expert, but I?m not completely convinced by this argument. In passing, it?s worth noting that we?re about to see how politically feasible such a budgetary burden is since the 4-7% of GDP range is roughly what Cecchetti et al at the BIS calculate is required to stabilise debt levels at 2007 levels (see chart below).
I personally think the 4-7% reparations was the last straw for the German authorities facing capital flight in response to the tax measures they?d introduced to shore up the government?s budget position (as we?re seeing in Greece today), with the monetization habit now very firmly entrenched and fearful of what might happen should painful deflationist policies be pursued. As Liaquat Ahamed writes in his masterful book on the Great Depression “Were he to refuse to print the money necessary to finance the deficit, he risked causing a sharp rise in interest rates as the government scrambled to borrow from every source. The mass unemployment that would ensue, he believed, would bring on a domestic economic and political crisis, which in Germany’s [then] fragile state might precipitate a real political convulsion.” Facing a dilemma orders of magnitude higher but nevertheless familiar to observers of today?s situation, faced with the terrifying prospect of even more economic pain should he slam on the brakes, he opted to press his foot further on the accelerator.
Another lesson: blaming speculators for economists' endless blunders and flawed outlook on everything, is nothing new. Somehow, CDS traders did not exist the last time countries were going bankrupt: but how is that possible?
Less well known though is that, as always, economic theory was on hand to furnish Von Havenstein with a ?scientific? justification for his playing for time. The consensus in Germany was actually that the cause of inflation was external because both the Reichsmark and import prices had moved disproportionately more than the rise in the money supply. Since the external value was caused by the balance of payments, which was largely caused by the reparations, it was foreigners and not budget deficits which caused the inflation. Indeed, Von Havenstein was so enamoured with this theory that he blocked attempts at monetary reform arguing that any measures would be pointless without settlement of the reparations issue. According to Ludvig von Mises, “Herr Havenstein honestly believed that the continued issue of new notes had nothing to do with the rise of commodity prices, wages and foreign exchanges. This rise he attributed to the machinations of speculators …” Speculators always get the blame don?t they?
But 1922 is so long ago. There is no way out "advanced" economy can in any way compare, is there? Read on:
I don?t want to overplay the parallels. In fact, there is one very clear difference between the hand Von Havenstein had to play then and those today?s central bankers have to play now, namely the stability of today?s political climate. Clearly this can change, but the class warfare, nationalistic xenophobia and revolutionary spirit poisoning the political atmosphere of 1920s Germany is at the very least dormant today, and certainly not meaningfully visible across the political landscape. But let’s not ignore the parallels either: as is the case for today’s central bankers, Von Havenstein was faced with horrible fiscal problems; as is the case for today’s central bankers, the distinction between fiscal and monetary policy had blurred; as is the case for today’s central bankers, the political difficulty of deflating was daunting; and as is the case for today’s QE-enthralled central bankers, apparently respectable economic theory reassured him that he was doing the right thing.
Let's not forget that without much fanfare, the Greeks and Germans are doing all they can to bring xenophobia back to the core.
One might think that the big difference is that today we have a greater expertise. Surely we understand what happens when deficits are financed with printed money, and that it is only backward and corrupt states that don?t know any better, like Bolivia and Zimbabwe? But just a few years ago didn?t we think that it was only backward and corrupt states that suffered banking crises too?
And anyway, how could Von Havenstein not have known that the continued and escalating printing of money to fund government deficits would cause inflation? The United States experience of unrestrained money printing during the Civil War had been well documented, as had the hyperinflation of revolutionary France in the late 18th century. Isn?t it possible that, like today, he was overconfident in his ability to control his creation and in the economic theory which told him such control was possible? Certainly, in an article in the New York Times on the eve of the First World War, again from Liaquat Ahamed?s book, there seems to have been evidence of the general optimism that there would be no "?unlimited issue of paper money and its steady depreciation … since monetary science is better understood at the present time than in those days.?"
The fact is we do understand the economics of inflation. Despite what economists everywhere say about being in ?uncharted territory? with QE, we know that if you keep monetizing deficits eventually you get inflation, and we know that once you'?re on that path it can be extremely difficult to get off it. But we knew that then. The real problem is that inflation is an inherently political variable and that concern over debt sustainability and unfunded welfare obligations leaves us more dependent on politicians than we have been in many decades. Frank Graham concluded his 1930 study of the Weimar hyperinflation with the following observation, which I think is as ominous as it is apt today:
"?The mills of international finance grind slowly but their capacity is great. It is also flexible. The one condition is that the hoppers be not unduly loaded in the effort to get the whole grist from a single grinding. So much for the economics of the question. What politics has in store is, however, an inscrutable mystery. It can only be said that such financial difficulties as may occur will almost certainly arise from political rather than from economic sources.?"
How many more parallels do we need: escalating geopolitical tensions across the world, an Eastern European powder keg, Quantitave Easing masking as just economic doctrine, and, on top of it all, a deranged money printer. Just as von Havenstein set the foundations for the most destructive war in world history, is his modern reincarnation currently doing the same, as yet another, much more destructive military conflict possibly approaches?
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Mois fois.
you guys need to stop talking to me using these romance languages. 'cept i might have an APP for that!
i know it's french.
Riddle: Why do the French have all those trees lining their country boulevards?
Q: Why do the French have trees on both sides of the street?
A: So the Germans can march in the shade.
i know i am showing my blond.
Close enough. They hate to march in the sun. I like your answer. I implies evey more French passivity.
Je suis tres enchante pour votre addicion.
***junk***ed bc they can't read french?
Splendor in the Grass,
If you look at French history, they seem to have a knack of winning wars and battles when others fight for them: Legion etranger, US, UK, Australian and NZ in WWI, same for WWII, though deGaulle had to be at the head of the troop marching into Paris. When they fight alone, they do seem to get their butts kicked.
The ultimate passive aggressive. Legion etranger, what other country had to come up with such notion?
no, no, no, you had me at
Cui bono? I have yet to see my new oil stocks arriving following our conquests of the oil fields of Iraq. Could it be that the war was not fought for me? Or to provide me with a new woman? I guess the war was fought for someone else. Perhaps ExxonMobil or the owners of ExxonMobile or Royal Dutch Shell, or BP...? Follow the money and the money leads, not to my house, but to the house of the investment banker.
Excerpt from Fiat Money: The Fuel of Government, an HBD review of END THE FED by Ron Paul:
The Federal Reserve and the Warfare State
The scariest power that the Federal Reserve gives government is that to wage war.
Under a regime of sound money government would have to pay for war, or anything else it did, by taxation. Since war is costly, heads of state tried to avoid it. If war did start, governments would try to settle as quickly as possible. With the ability to print money, the state could finance ambitious projects and scapegoat others when it wrecked the economy. As Paul puts it, “It is no coincidence that the century of total war coincided with the century of central banking.”
The US Federal Reserve was founded in 1913 and allowed America to enter World War I four years later. It has been estimated that only 21 percent of the war effort was funded through taxation. 56 percent of the spending came from Fed-backed borrowing and 23 percent of the money was created out of thin air. Without centralized banking there would’ve been no World War I, Treaty of Versailles, Russian Revolution, Nazism, or World War II.
Lew Rockwell explained that centralized banking funded Russia’s efforts in the First World War. It “turned a relatively benign monarchy into a war machine. A country that had long been integrated into the worldwide division of labor and was under a gold standard became a killing machine.” The inflation led to massive unrest and eventually, Communism.
Today, the Federal Reserve funds the American empire as it has the wars in Iraq, Haiti, Korea, Vietnam, Afghanistan, Serbia, the Dominican Republic, and Nicaragua, and bases on every continent but Antarctica. If the American people had to make the connection between the taxes they pay and bases in Kazakhstan or women’s rights workshops in Iraq the beast may be reigned in. This principle not only applies to wars, but everything else that the government spends its money on.
http://hbdbooks.com/2009/10/what-powers-government-fiat-money/
French responsible for "CIA" drug trafficking in Vietnam '47-'51.
CIA founded by the Head of Security for the Nazis Party; founded and backed by scull and bones, as well.
Great posts above.
I propose that when this mess comes to a conclusion,
or otherwise experiences a "break" event,that
we all get together for live music, barbeque and "corn squeezings"
I will even offer to host at my "retreat"
Chicken,beef,pork and drinks on the house!
Y'all can bring the salad and fixins...
Will it be DisasterFest 2010, 2011 or 2012?
Printfaster, if wars are fought for territory and "women" what the hell are we doing in Iraq and Afghanistan??
It ain't the women. It is the other one. If you don't believe it, think more slowly.
The "and" was a list "and", not a both. Kind of like, I eat soup, vegetables, and meat. You might not eat them all at one meal.
Besides, both are not really wars, insomuch as they more resemble the taming of the west by the US Cavalry. The US Cavalry is just going out a bit more. Gary Owen.
funny, you mean our original homeland security?
Ben, Go to Hell. Go directly to Hell. Do not pass Goldman. Do not collect $20 million.
AIG Loss of $9B in 90 days = 2/3 of the $15B Jobs Bill that congress voted on to save 300 million americans.
AIG $9B loss is only dwarfed by Bonuses of Banksters from AIG and other Banksters at $165B / year, for coming up with these losses.
AIG $9B loss = 1/2 the debt of Dubai = 1/3 the debt of Greece.
In 90 days AIG is running losses as much as countries.
And AIG did better than expected.
Unfortunately, the Boardwalk Boys keep letting him print those get out of Hell free cards
Just what would be a transmission mechanism towards a high inflation? As far as I am concerned -deflationary risks are out there as far as the eyes can see
High inflation and hyperinflation are entirely different concepts. Hyperinflation comes from a failure of confidence in the currency. So you can move from deflation to hyperinflation. Most of the deflationists predict exactly that--a deflationary spiral which transforms into a successive currency crisis.
Precisely. mv=py gents. M2 is up a pathetic 1.3% in the past 52 weeks, v has collapsed due to deleveraging/debt repayment. This reeks of deflation. Now if the printing presses were rolling non stop and everyone was attempting to spend their paychecks within two hours of getting it and draining savings to boot since they have lost faith in money as a store of wealth I would buy a hyperinflation argument (ie m and v pushing higher at the same time leading to higher prices due to stagnant output) but this is simply not happening. The moves to stimulate the economy have been nothing more than an attempt to counter a decreasing velocity of money.
Right. Let me say it again, right. What you are refusing to accept is that "deflation as far as the eye can see" should be said in the context of distance, not time. Several, no - many contributors have said "Deflation can go straight to currency crisis if it gets deep enough. Currency crisis skips inflation and goes straight to repudiation, manifested as hyperinflation". That way lies wisdom based on history. "This time is different" to me means that this time could be much worse.
Zero Hedge makes David Weidner’s Ten Wall Street Blogs You Need to bookmark Now at the WSJ.
Says Weidner: “Every addict has to have his or her fix, and for Wall Street junkies obsessed with bonuses, bailouts and beta, the blogosphere has plenty of smack to go around.
“Wall Street blogs have become a serious enterprise of late affirmed by the recent acquisition, for an undisclosed sum, of Footnoted.org by Morningstar Inc., the Chicago-based fund research giant and CBS Corp.'s 2007 acquisition of Wall Strip for a reported $5 million…Said Weidner: ”What follows, in my opinion, is the best of the best. I've limited the list to include sites that combine news and analysis on Wall Street, skipping the stockpickers or pure investing sites. Some in the top 10 are focused on the economy, but include the world of broker/dealers and banks as part of their mission. For purely economic blogs see WSJ.com's piece from July 2009. I've also excluded blogs run by major news organizations such as the Wall Street Journal, New York Times and Financial Times.”
Weidner’s Picks of Wall Street Blogs— llisted alphabetically with reviews and links:
The Big Picture
BusinessInsider/Clusterstock
Calculated Risk
Dealbreaker
The Epicurean Dealmaker
GoldmanSachs666
Macro Man
Naked Capitalism
The Reformed Broker
Zero Hedge.
http://online.wsj.com/article/SB10001424052748704240004575085901098514146.html
Thanks to velobabe for the initial alert.
Phase Shifts, Stick/Slip and the Demise of Our "Socialist" Housing Policy
February 26, 2010
Any of several critical factors could trigger the next phase shift decline in housing prices.
One of the central ironies of the current "housing recovery" is that it is 100% "socialist," that is, funded entirely by the Federal Reserve and the Federal Government. The Fed has purchased quite literally 99% of all the mortgage-backed securities issued in the past year--$1.2 trillion. Without the Fed purchases, there would be no mortgage securities market. It's as simple as that.
The government owns well over half the nation's $10 trillion in mortgages via its defacto ownership of Fannie Mae and Freddie Mac, and it has guaranteed virtually all the mortgages originated in the past year via FHA or VA.
Anyone claiming to be a supporter of free-market capitalism must demand an immediate end to this 100% "socialist" support of the U.S. housing and mortgage markets.
The reason why realtors, bankers, builders and politicos are nervously whispering "we're all socialists now" is simple: were the Fed and Federal government to withdraw their subsidies, guarantees and outright purchases of mortgages, the mortgage market would instantly freeze up or start pricing in the very real risk that housing is not "recovering" and that anyone holding a mortgage could suffer huge losses if real estate continues declining in value.
If hypocrisy was fatal, virtually every realtor, banker, mortgage lender, Fed and Treasury official and craven politico would instantly expire. Housing is the ultimate "too big to fail"--yet it is failing nonetheless. ...
http://www.oftwominds.com/blog.html
Great, Great!!
We are now in uncharted territory for America. We are consumer nation who's economy rests upon us serving one another and consuming the labors of other nations to the tune of 70% of our GDP. Our aging population is huge and poor to boot with the average boomer having a whopping $50,000 for retirement or unemployment, which ever comes first.
We are led by a tax and spend President and Congress and have accumulated more debt than any nation in the history of the world (absolute per capita). We are straddled with a Central Bank who's mission seems to be free rent and ride for all and spending money to boot.
Can someone out there explain to me how we can possibly avoid hyperinflation?
bear makes a nice wrap up. Wish the evening news would report on any part of this in the detail it so richly deserves.
Thank you Bear. There are so many moving parts in this fiasco, watching it crumble day by day is like a fascinating movie. TV is boring compared to this.
this would make for a great movie, all we need now is aliens. Wait... i am one!
LOL
There is no transmission mechanism to hyperinflation. The money supply vaporizes - along with most financial assets as the rents collapse. Real assets hold up on a relative basis, especially those that are useful. Gold is money. But food, booze, cigarettes, water, and fuel are cash.
The Fed will be forced to buy Treasury debt - but that won't put cash in economic circulation. Its a dying / fading star, not a super-nova.
People who are income-independent and who have their own means of producing food, water, and energy will survive. Anyone dependent on some job created to service the state or the global corporate economy and who has no practical, useful skills is in trouble.
God bless.
There is no transmission mechanism to hyperinflation. The money supply vaporizes - along with most financial assets as the rents collapse. Real assets hold up on a relative basis, especially those that are useful. Gold is money. But food, booze, cigarettes, water, and fuel are cash.
The Fed will be forced to buy Treasury debt - but that won't put cash in economic circulation. Its a dying / fading star, not a super-nova.
People who are income-independent and who have their own means of producing food, water, and energy will survive. Anyone dependent on some job created to service the state or the global corporate economy and who has no practical, useful skills is in trouble.
God bless.
Wrong my friend - the Treasural Fedury will capitulate when the pain gets too intense. Those Gummint debit cards that the downtrodden rely on will get visited by the money fairy. The workers with Direct Deposit will get their raises first (paychecks have a nasty habit of being "cashed"). They can manage the physical money shortage if they keep enough transactions in the electronic ether. It will also be a backdoor attack on the underground economy (see Greece, or any urban hellhole in America). Bartering for drugs? I don't think the importers will go for that.
I humbly recommend Webster Tarpley's:
British Financial Warfare: 1929; 1931-33; How The City Of London Created The Great Depression
It's a lengthy, but insightful understanding not only England, but Weimar Germany.
http://tarpley.net/online-books/against-oligarchy/british-financial-warf...
If you want to argue that printing money is guaranteed to cause inflation then you have to explain why it hasn't happened in Japan. They've been printing money like crazy for almost 20 years and the economy is still deflating.
Japan isn't a hungry collective yet. We are attempting to follow Japan's lead in printing money to fill the sinkhole as it maws open - but only that much (well, plus the bankster skim). Think about it, Japan's personal savings rate has been a cushion there. Amazing huh? 20 years they have fought the inevitable, but don't dare speak as if the story is over.
Someone is working really hard to drag this thread off course, and is being damned clever about it.
yes
;-)
Having reviewed the many arguments for a deflationary or an inflationary future, I'm going to bet we get both. Housing, real estate, luxury items, and other maintenance-intensive assets will continue their decline, but the basic necessities of life will cost a lot more, thanks in part to the Fed and in part to China and others who decide to love the US bond market a whole lot less, and commodities (including raw materials) a whole lot more. The people who have just barely been making their mortgage payments will be done in by rising energy costs and taxes, and foreclosures will stay high for many years. The Fed will find a way to average the losers and the gainers into the CPI, assuring us that inflation and deflation are both under control, even as wages stagnate and our standard of living goes into chronic decline. Congress will eventually do the right thing and cut spending, but not until after 80% of them are replaced by neophytes who don't quite catch to the fact that their campaign contributors are expecting to influence their votes. They'll be known collectively as the “one-term wonders”.
Seriously, Tyler, the premise that it was bankers and economists that were to blame for the German hyperinflation is fatally flawed, and more fatally flawed in using hyperinflation as the root of WWII.
The hyperinflation was a political decision ultimately, and bankers were not the ones to create WWII, but carried the water for Hitler, they held little or no influence over him. I am repeating my somewhat droll post above here but it seems to bear repeating: It was Wilson and the treaty of Versailles that created the Hyperinflation, and it was Wilson and Versailles that the created the drum that Hitler beat to march to WWII.
Hey Printfaster... I think you are on the right track but confound a cause and effect pretty quickly... The bankers realized they had little to no influence on Hitler AFTER they had helped get him into power- the thinking having been he was a better alternative to communism- and almost immediately they realized they should have been careful what they wished for.... Without bogging down on the Bush connections an instructive example would be to look at the Frick family and their efforts to De-German the company once Hitler rises to prominence. Cui Bono http://www.economicexpert.com/a/Silesian:American:Corporation.html
What you cite is typical banker egotism, that they somehow influence the tide of history.
Nothing could be further from the truth. They carry water. If they don't carry the water someone else will. The notion that someone evil bankrolled Hitler is fanciful. Tying the Bushes or Harrimans to Nazi rise is like asserting it was the type of beer that Hitler drank that caused WWII.
WWII and Nazism causes were political, and the root of it was 20th century progressivism as expounded by Wilson, Sanger, and those who thought that government could be purified of corruption, and created into a god-like ideal. Well, Hitler did exactly that, creating the ideal, corruption free government that progressives so yearned, ridding itself of all undesireable and defective elements.
If you doubt the connections to Versailles, look at the origins of the appeasement by Chamberlain. Britain, US and France came to become guilt ridden over the Versailles travesty and could not stand up to Hitler.
We need to accept that corruption is part and parcel of government and act accordingly. That means never, ever trusting government. The moment you trust government, it will haul you off.
Chamberlain, that's my last name, what did he do?
soros is evil, and kidding a lot of people his place of honor among them.
Printfaster
Download a picture of Mein Fuhrer drinking a pint; now that would be a rare glimpse for a tea man.
If you want more on the typical banker role, look at George Soros, the ultimate vulture.
George started his career at 15, in the streets of Budapest, pillaging the property of jews taken away to concentration camps. He has not stopped. His financial history is that of pillage, whether it be the British pound or Euro today.
He is not a man to influence politics, he is a man to feed off its dead. That is the role of bankers.
The signature image of the Weimar Republic is that of a man taking a wheelbarrow full of cash to the grocery store.
Here and now in the U.S., most people are so cash-strapped they pay for beer and cigarettes with a Visa card.
Exactly -- we have a debt based economy. 1920's Weimar and 2000's USA/Europe might seem similar, but they cannot be as long as we are talking about CREDIT expansion vs. true inflation of the money supply.
One will ultimately result in a rapid, implosionary deflation. The other in a runaway hyperinflation.
They are both forms of economic collapse, but the mechanism of the final cataclysm will be completely different.
That is because they can't put them on their Assistance Card.
Van Helsing!!!
On the comment earlier about Ron Paul being "used" to misdirect the public ...
I think that's a smart observation. Ron Paul is being used to keep the public worried about and thinking about and focused upon the dangers of "inflation."
If the public believes there's a possibility of significant inflation and money printing, they may continue to buy assets and stock up on supplies and otherwise stimulate the economy.
Once people realize that the future is deflation, economic contraction, default, debt repudiation, and falling prices, they'll stop buying stuff, walk away from their mortgages, pay off their debts and hoard cash.
Ron Paul is the only honest man in Washington, and he's got a better understanding of what's going on than 90% of our elected officials. But he's not right about the end game.
They let him rant and rave because it serves their purposes - to generate a mirage that nominal prices will be higher in the future. The dangerous inflation RP warns of has already happened. What we're looking at now is the "other side of the mountain" - decades long depression, asset contraction, money supply vaporization, lawsuits, congressional hearings, special prosecutors, etc ...
If RP was ranting about our deflationary future, they'd figure out a way to silence his voice.
See my rebuttals above - I think you are right if say, checkers only allowed one jump. But when the board aligns a certain way, the jumps go fast all the way to the other side. You'll get your deflation, it is "what's on the board". But RP can see that too, he just knows that the inevitable response will be disastrous.
Question:
There cannot be a more important question facing the entire planet at this moment. Maybe: What will happen when people realize we are already there?
For the record: the continuing saga of Ron Paul Vs. Bizarre Ben Bernanke… by Ron Paul
Before the US House of Representatives, February 25, 2010
Madame Speaker, I would like to enter into the record the following letter from Professor Robert D. Auerbach, a professor at the LBJ School of Public Affairs at the University of Texas. This letter provides additional information regarding remarks I made at yesterday's Financial Services Committee Humphrey-Hawkins hearing, remarks which Federal Reserve Chairman Bernanke categorized as "bizarre."
_____________________
Thank you Congressman Ron Paul for bringing these important facts to the public's attention.
I thank Congressman Ron Paul for bringing to the public’s attention the Federal Reserve coverup of the source of the Watergate burglars’ source of funding and the defective audit by the Federal Reserve of the bank that transferred $5.5 billion from the U.S. government to Saddam Hussein in the 1980s. Congressman Paul directed these comments to Federal Reserve Chairman Ben Bernanke at the House Financial Services Hearing February 24, 2010. I question Chairman Bernanke’s dismissive response.
BERNANKE: "Well, Congressman, these specific allegations you've made I think are absolutely bizarre, and I have absolutely no knowledge of anything remotely like what you just described."
The evidence Congressman Ron Paul mentioned is well documented in my recent book, Deception and Abuse at the Fed (University of Texas Press: 2008). The head of the Federal Reserve bureaucracy should become familiar with its dismal practices.
First, consider the Fed’s coverup of the source of the $6300 in hundred dollar bills found on the Watergate burglars when they were arrested at approximately 2:30 A.M. on June 17, 1972 after they had broken into the Watergate offices of the Democratic Party. Five days after the break-in, June 22, 2003, at a board of directors’ meeting of officials at the Philadelphia Fed Bank, it was recorded in the minutes [shown on page 23 of my book] that false or misleading information had been provided to a reporter from the Washington Post about the $6,300. Bob Woodward told me he thought he was the Washington Post reporter who had made the phone inquiry. The reporter "had called to verify a rumor that these bills were stolen from this Bank" according to the Philadelphia Fed minutes. The Philadelphia Fed Bank had informed the Board on June 20 that the notes were "shipped from the Reserve Bank to Girard Trust Company in Philadelphia on April 3, 1972." The Washington Post was incorrectly informed of "thefts but told they involved old bills that were ready for destruction."
The Federal Reserve under the chairmanship of Author Burns not only kept the Fed from getting entangled in the Watergate coverup, which the Fed’s actions had assisted, it allowed false statements about bills the Fed knew were issued by the Philadelphia Fed Bank to stand uncorrected. Blocking information from the Senate and House Banking Committees [letters shown in my book, Chapter 2] and issuing false information during a perilous government crisis imposed huge costs on the public that had insufficient information to hold the Fed officials accountable for what they had withheld from the Congress. Had the deception been discovered the Fed chairmen following Burns may have been forced to rapidly implement some real transparency to restore the Fed’s credibility. That would have reduced or eliminated many of the lies, deceptions, and corrupt practices that are described in my book.
The second subject brought up by Congressman Ron Paul is the exposure of faulty examinations of the Federal Reserve of a foreign bank in Atlanta, Georgia through which $5.5 billion was sent to Saddam Hussein that a Federal Judge found to be part of United States active support for Iraq in the 1980s.
On November 9, 1993, several federal marshals brought a prisoner, Christopher Drogoul, into my office at the Rayburn House Office Building of the U.S. House of Representatives. The marshals removed the manacles. Drogoul took off his jump suit and changed into a shirt, tie, and business suit. He immediately looked like the manager of the Atlanta agency with domestic headquarters in New York City of Banca Nazionale. Drogoul had come to testify about "scheme prosecutors said he masterminded that funneled $5.5 billion in loans to Iraq’s Hussein though BNL’s Atlanta operation. Some of the loans allegedly were used to build up Iraq’s military and nuclear arsenals in the years preceding the first Gulf War."1
Drogoul’s "‘off book’ BNL-Atlanta funding to Iraq began in 1986 as financing for products under" Department of Agriculture programs.2 The loans allegedly had been authorized by the U.S. Department of Agriculture. Since Drogoul told the committee he was merely a tool in an ambitious scheme by the United States, Italy, Britain and Germany to secretly arm Iraq in their 1980–88 war, the testimony was politically contentious and unproven. He was sentenced in November 1993 to 37 months in prison and he had already served 20 months awaiting his sentencing hearing.
U.S. District Judge Ernest Tidwell found that the United States had actively supported Iraq in the 1980s by providing it with government-guaranteed loans even though it wasn’t creditworthy. The judge said such policies "clearly facilitated criminal conduct."3
Gonzalez was drawn to Drogoul’s answer about the Fed examiner who had visited his Atlanta operation. Gonzalez said that:
"At the November 9, 1993 Banking Committee hearing I asked Christopher Drogoul, the convicted official of the Banca Nazionale Del Lavoro agency branch in Atlanta, Georgia, how the Federal Reserve Bank examiners could miss billions of dollars of illegal loans, most of which ended up in the hands of Hussein.
Mr. Drogoul stated:
The task of the Fed [bank examiner] was simply to confirm that the State of Georgia audit revealed no major problems. And thus, their audit of BNL usually consisted of a one or two-day review of the state of Georgia’s preliminary results, followed by a cup of espresso in the manager’s office."
Gonzalez was appalled at the of lack of effective examination of a little storefront bank and also appalled by the gifts exchanged by officers of the New York Federal Reserve and the regulated banks in New York City where the main U.S. office of BNL was located. A description of what followed is in my book.
The Fed voted in 1995 to destroy the source transcripts of its policy making committee that had been sent to National Archives and Records Administration. Chairman Alan Greenspan had the committee vote on this destruction, telling the members: "I am not going to record these votes because we do not have to. There is no legal requirement." (p. 104 in my book.) Greenspan thus removed any fingerprints on this act of record destruction. Donald Kohn, who is now Vice Chairman of the Board of Governors at the Federal Reserve, answered some questions I had sent to Chairman Greenspan about this destruction. Kohn replied in a letter on November 1, 2001 to me at the University of Texas that they had destroyed the source records for 1994, 1995 and 1996, they did not believe it to be illegal and there was no plan to end this practice. That is one reason why the Federal Reserve audit supported by Congressman Ron Paul is needed. The Fed must stop destroying its records.
Robert Auerbach is Professor of Public Affairs at the Lyndon Baines Johnson School of Public Affairs, The University of Texas at Austin. He was an economist with the House of Representatives Financial Services Committee during the tenure of four Federal Reserve Chairmen: Arthur Burns, William Miller, Paul Volcker, and Alan Greenspan. Auerbach also served as an economist in the U.S. Treasury's Office of Domestic Monetary Affairs during the first year of the Ronald Reagan administration and as a financial economist with the U.S. Federal Reserve System…
Your vigilance is much appreciated, JR. It is the only way to beat the bastards. Ron Paul is the gold standard of that. Pun intended - I need a laugh in these dark times.
while inflation runs ahead of interest rates... as it already does in China...
If you don't see at least two of these things, you are really missing the point.
Our only hope is that this is history repeating itself as farce, and that the effects of this second round of Depression will be mitigated by some new economic vision. There are reasons why that hope should not be held out, we live at the end of an age, and the slowing rate of new technologies is going to make fixing the problems which old technology created, much more difficult, and may take decades to solve.
Finally one needs to question the independence of the FED, as Bush policy brought it much closer to the Treasury, and Obama policy is a contination of Bush policy. And this problem comes at a time when the forces of 'revolutionary' spirit want to reign in the FED.
Some people tend to disregard the 5 billion GOLD francs France had to pay to Germany after the 1870 war as war reparations(the war was fought in France leaving the french with the cost of rebuilding plus Germany annexed part of then french territory).
WW1 destroyed part of France.
I believe this should at least be taken in account before putting all blame on Versailles and the French.
To Anon 247892
There is a good argument for reparations to France from Germany. There is an equally good offsetting argument that France owed the German states after Napolean raped and pillaged.
Europe was an economic and political quagmire; let us hope the "beggar thy neighbor" thinking is over.
Hoping..... hoping.... hoping......
This post is way off. Reparations were the cause of the hyperinflation. The Allies took part of their force repayments through industrial production. This is one of the reason why France continued to occupy the Rhineland after the war.
Part of the cash payments were made in gold, but Germany convinced the Allies to accept the balance of those cash payments in Papiermarks as their gold reserves were exhausted.
Inflation started in Germany in 1914 as a direct result of the war. The hyperinflation on began after Germany could not convince the Allies to reduce/reschedule their cash payments. It was a deliberate tactic to defraud the Allies and it ended when the Rentenmark was issued to replace the Papiermark in November, 1923.
Hitler took care of the industrial part when he retook the Rhineland in 1936.
Try cracking a Western Civ textbook that covers the 20th century next time.
No this isn't the long awaited Pee-Three Elliot Wave.
The link below will take you to Hilo Bay Web Cam located on top of the Pacific Tsunami Museum. The think tank boys are predicting maybe 12 to 15 foot waves in Hilo bay. If you don't get images right away, hang tight it may just take awhile. The site says you may need to install AxisCam control if you use IE, it is silent on Firefox.
Bays act as amplifiers for long waves like Tsnamis. Hilo was bodyslammed by a large Tsunami in 1946.
Note that the Haiti earthquake happened right on the eclipse which was a no moon.
The current Chile and Japan Earthquakes happened on the approaching full moon.
This is a push me/pull me affect of the large gravitational pull of the moon as it lines up with the sun.
Affects on the markets? Moons have been particularly accurate predictions of turning points this year, although direction is not "known". Massive earthquakes are not a good sign though, for the collective pysche in the current "Mass Global Pychosis" as Daneric has so nicely coined.
Most events in Hawaii have been cancelled, shorelines are being evacuated. People are filling up their gas tanks and water jugs. Just in case.
I'll post some still photos from Kunia Oahu, about 400 feet up, safe viewing of the ocean off Oahu. It's about 8:30AM local time, tsunami expected starting 11:00AM or a little later, and maybe waves coming for several hours.
http://oahutrading.blogspot.com/2010/02/tsunami-in-hawaii.html
The years of the Weimar Republic imprinted on the western world a devastating future. But were the key culprits the citizens of Germany or the privateers of the Reichbank?
Wrote economist Morgan Ibarra in his article Vampire banker$ published recently in The Humanist:: “[W]hat happened to Germany in 1923--overlooks the fact that the Reichsbank (made independent of the government in May 1922) went way overboard, running the presses round the clock.
”Lord D'Abernon, the British Ambassador to the Weimar Republic from 1923-1926, wrote that the situation was ‘like giving maniacs control of the asylum.’
“There is a spot on the lending curve where the Rule of 72 kicks in with an exponential vengeance. Remember that the Weimar Republic's mark was worth one-trillionth of its 1922 value at the end of 1923, the year of hyperinflation. Writers like Ellen Brown (whose latest book is Web of Debt) have theorized that the hyperinflation was caused by short-selling. But that was merely part of the problem. I would argue that even though usury laws were in place in the Weimar Republic, bankers ignored them and issued adjustable-rate loans, which not only edged out the runaway inflation, except when the rate of inflation/interest was so high (say, a billion percent) that bankers offered borrowers a discounted rate. The short-selling was merely the delicious icing on the structural cake of compounding interest.
”Using the Rule of 72, a loan of 10,000 Papiermarks, at 10,000,000 percent interest, would double in less than two minutes. If we divide 72 by 10 percent, we get 7.2 years. If we divide it by 10,000,000, we get 0.0000072 years. Convert this from years to seconds and the answer is 113.5 seconds--less than two minutes. Now, let's double the 10,000 Papiermarks an arbitrary nine times. (113.5 times 9 equals 1,021.5 seconds; divide by 60 seconds = 17.02 minutes.)
“So, in seventeen minutes the German banker had earned 5,120,000 Papiermarks through compound interest. Combined with the flat money the banker created by issuing loans, the Rule of 72 kicks in making the Reichsbank's presses run at a ferocious pace and jacking up the denominations to astronomical levels to cover the hyperinflation caused by the banks' turbo-compounding. These bankers were entrepreneurs, short-selling the crisis they created during the window of opportunity before the government converted the Papiermark to Rentenmarks.
”If our private bankers aren't reined in, this is what may be in store for us. The awesome shock of Naomi Klein's Shock Doctrine that takes us down the road to dictatorship may just be depression combined with hyperinflation--not hyperinflation followed nine or ten years later by depression.”
http://www.thefreelibrary.com/Vampire+banker$+(or+the+nuts+and+bolts+of+the+scam):+do+we+define...-a0207350183
More than 70,000,000 people, mainly innocents, died in WWII—a war in which a defeated Germany, Prime Minister Winston Churchill was confident, would help save his vast British Empire--a war in whose aftermath the boot of Joseph Stalin, the Butcher of Moscow, would press more squarely upon the face of the U.S.S.R.
Can the innocent peoples of nations be collectively condemned over and over for the crimes of tryants without condemning all of mankind? Can the people of America be collectively condemned for the sins of the Clintons and the Bushes and Obamas and their unprovoked killings of the innocents in Bosnia, Palestine, Iraq, Afghanistan…? Then let he who is without the sin of silence in the on-going Palestianian Holocaust cast the first stone.
Consider the price already paid. Consider the developments after WWII:
In 1947, a defeated, divided, truncated, occupied Germany was a mass of rubble, its economy a desperate scratching for subsistence.
Although the Marshall Plan enabled Germany’s people to rebuild a free society and a free economy, a predecessor blueprint for genocide became the on-going principal occupation policy directive – a policy that aimed at the destruction of a nation’s people. It was the Morganthau Plan, drawn up by America’s wartime Secretary of the Treasury, Henry Morganthau (the grandson of German Jewish immigrants) and his closest advisory, Harry Dexter White (later revealed by the FBI as a high-ranking Communist).
It aimed at the permanent destruction of Germany’s industrial heart and the consequent death through starvation and disease of millions and tens of millions of Germans.
“Time” magazine has aptly called it “history’s most terrifying peace.”
“Since the end of the war about 3,000,000 people, mostly women and children and overaged men, have been killed in eastern Germany and south-eastern Europe; about 15,000,000 people have been deported or had to flee from their homesteads and are on the road. About 25 per cent of these people, over 3,000,000, have perished. About 4,000,000 men and women have been deported to eastern Europe and Russia as slaves….” Quoted by Sen. Homer Capehart in speech before U.S. Senate, Feb. 5, 1946.
And, now, Israel is erecting a memorial commemorating The Butcher of Moscow’s Red Army.
http://www.jpost.com/Israel/Article.aspx?id=168866
The players know what is going on, why would they hide information? e.g. M3 money supply, GATA reported CFTC hiding the banks monopolizing silver. What was a naturally occurring business cycle is now a nuclear blast of unknown proportions!
Tyler, I have not read the 320 preceeding comments, but von Havenstein was NOT responsible "for Germany's Hyperinflationary Collapse (And Ostensibly WWII)?"
The Reichsbank was NOT independent !
It was bound by the instructions of the socialist government !!!
Grüsse aus Deutschland
Werner
The Rentenbank was independent (as the Reichsbank had been) of government interference. It was the same as having the Federal Reserve Bank in charge. The same as in America now.
"There were problems, many of which had already been thrashed out at the end of the summer. The gold and gold-equivalent reserves had been so frittered away during the Ruhrkampf that they were inadequate to back the new currency. The Rentenbank's notes were therefore guaranteed in equal amounts by mortgages on landed property and by bonds on German industry — trade, commerce, banking and transport — to a combined amount of 3,200 million gold marks, about £160 million. The maximum note issue in Rentenmarks was to be 2,400 million. The Rentenbank was independent (as the Reichsbank had been) of government interference. In return for special credits of 1,200 million to the Reich — including 300 million Rentenmarks at nil per cent to pay off the floating debt — the government guaranteed not to discount any more Treasury bills with the Reichsbank." -- German Weimar Republic in the early 1920s and the U.S. - Troubling similarities
http://www.nowandfutures.com/us_weimar.html
"The real rulers in Washington are invisible and exercise power from behind the scenes."
-- Justice Felix Frankfurter (1882-1965) U.S. Supreme Court Justice
I believe that having the world's reserve currency is a liability not an asset in a hyperinflation possibility scenario. It would only take a small percentage of the dollars held outside the country to make their way home bidding up the price of hard assets. After this the increase in price of petroleum and all other imports would shutter factories and freeze supply chains. Then more dollars would return home and the cycle would be self sustaining. Production continues to drop, dollars continue to come home and hyperinflation is born. Any holes in this logic? Before it happens I would imagine a large outflow of money/assets as those who are uber rich or in the know protect themselves. At bit like the water rushing out before a Tsunami.
The US is still paying reparations for both world wars. After the wars we had such an inflated sense of self worth that we took it upon ourselves to save the rest of the world from another world war. So we still have armed forces in 193 countries and our military budget is 50% of the military budget of the entire world. The higher taxes we pay to sustain this could be the single biggest reason that the US has lost it's competitveness. The military industrial complex sustains this by paying off the politicians. If a liberal like Obama is being paid off by them, there is no hope.
But as we have seen over the past three years or so, things seem to move so much faster than they used to. Is it really such a stretch to think that the nascent rumblings of political dissent we’re already seeing – a la the tea party movement – can suddenly escalate into widespread discord, where the torches and pitchforks are out in force?
Interesting isn’t it, the disturbing parallels that exist between Weimar Germany and now and the tea party movement and put forth so well by Dylan Grice? For instance, “The Tea Act of 1773 was passed by Parliament to save the British East India Company from bankruptcy.” – The Annals of America Vol. II
Shades of Goldman Sachs and JP Morgan bailout?
“Revolutionary Tea”
Says The Annals: Boston’s violent resistant against the Tea Act met with varied reactions among the colonists. The destruction of private property was condemned by many Americans, but most of them supported the principle, if not the practice of Boston’s position. “Revolutionary Tea” is a song that expressed the feelings of many of the Patriots. (Source: Father Kemp’s Old Folks Concert Music, Boston, n.d.)
REVOLUTIONARY TEA
There was an old lady lived over the sea
And she was an island queen.
Her daughter lived off in a new country
With an ocean of water between.
The old lady’s pockets were full of gold
But never contented was she,
So she called on her daughter to pay her a tax
Of three pence a pound on her tea,
Of three pence a pound on her tea.
“Now, mother, dear mother,” the daughter replied,
“I shan’t do the thing you ax.
I’m willing to pay a fair price for the tea,
But never the three-penny tax.”
“You shall,” quoth the mother, and reddened with rage,
“For you’re my own daughter, you see,
And sure ’tis quite proper the daughter should pay
Her mother a tax on her tea,
Her mother a tax on her tea.”
And so the old lady her servant called up
And packed off a budget of tea;
And eager for three pence a pound, she put in
Enough for a large family.
She ordered her servant to bring home the tax,
Declaring her child should obey,
Or old as she was, and almost full grown,
She’d half whip her life away,
She’d half whip her life away.
The tea was conveyed to the daughter’s door,
All down by the ocean’s side,
And the bouncing girl poured out every pound
In the dark and boiling tide;
And then she called out to the island queen,
“Oh, mother, dear mother,” quoth she,
“Your tea you may have when ’tis steeped quite enough
But never a tax from me,
But never a tax from me.”
wonder if today's so called tea party would take REVOLUTIONARY TEA on as their anthem. not.
rebellious female in 1880's
Obama is bullshit.
Money base has increased but money supply has not. If banks don't lend the money doesn't reach the system so there's no inflation.
Fannie and Freddie need more money....
Print more.... it can't last...
The only reason US is not in hyperinflation now, and probably won't be for awhile, is because of its military might.
Therein lies the key difference between US now and Weimar Germany.
Three questions for the good people at Zero Hedge...
Is the universe stable, ordered, benevolent and expansive ?
Is violence innate from birth ?
How powerful is groupthink ?
Article, quoting Louis MsFadden:
' Mr. Chairman,we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal reserve banks. The Federal Reserve Board, a Government Board, has cheated the Government of the United States and he people of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through the maladministration of that law by which the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.'
I wonder what happened to McFadden?
President John F.Kennedy,
The Federal Reserve
And Executive Order 11110
http://www.freedomportal.net/forum/index.php?PHPSESSID=rvep0br7b516eepuj...
The internet is filled with alarmists who, think the world will end each and every day. So, it's not surprising that the hyper-inflation scenario has its proponents.
But, the reality is that we've just had three massive bubbles burst: housing, equities, commodities (oil).
Hyperinflation would cause all three bubbles to reinflate when, never in history, has one bubble ever done so.
Let's not forget the NASDAQ is still 60% off its bubble high. But, for you hype-types, go ahead, put your money where your mouth is. Load up on QQQQ.
A very interesting read. Indeed the psychological similarities are eerie. However, some structural differences make me think that this will play out in a more controlled manner. The cash society difference is important since it has such a big impact on the correlation between newly printed money and how fast people are inclined to put it to use. Right now the US doesn't need to see higher denomination of cash money bills because of the electonic structure. If we were ever to retrofit our presses to make $500 bills then it is game over. Thus the same rolling wave effect will probably not be felt.
Second big structural difference is that the current monetary system is just so damn different. No gold standard for one and a world held hostage to a reserve currency.
If I remember correctly, all of Germany's reperation debt was denominated in foreign currency. This is a huge contrast to the US who has all of its debt denominated in its own currency, with unparralled military strength and strategic position in the middle east present to back up the legitimacy of its printing press. I do not see how in the present moment it is in anyone's interest to aggressively persue physical conflict. The american empire provides too many incentives to the upper classes/oligopoly/technocrats/fascists of other countries to have them throwing a fit over minor episodes of social unrest. If this pot ever does reach boiling it will not manifest in a war between countries.
It could be Bernanke or some other guy. . . at this point it doesn't really matter. The future is already baked into today's numbers. There is no way out now but through collapse.
LEARN THE TRUTH ABOUT OIL, US MILITARY AND THE SUBURBS:
http://www.youtube.com/watch?v=MfGZ1MWRNxU
"The Jewish people as a whole will become its own Messiah. It will attain world dominion by the dissolution of other races, by the abolition of frontiers, the annihilation of monarchy and by the establishment of a world republic in which the Jews will everywhere exercise the privilege of citizenship.
In this New World Order the children of Israel will furnish all the leaders without encountering opposition. The Governments of the different peoples forming the world republic will fall without difficulty into the hands of the Jews. It will then be possible for the Jewish rulers to abolish private property and everywhere to make use of the resources of the state. Thus will the promise of the Talmud be fulfilled, in which is said that when the Messianic time is come, the Jews will have all the property of the whole world in their hands."
— Baruch Levy, Letter to Karl Marx, 'La Revue de Paris', p.574, June 1, 1928
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Did Rudy exchange his personal assets from the Mark to another currency before inflation? Did Bernie convert his to gold? I doubled my gold years ago the day I saw Dick Cheney's tax return made public showing his gold holdings.
The currency crisis results of an inability to stealth monetize enough of the coming debt service and entitlement requirements. Deflation exhaustion will require the magic elixer, followed by miscalculation.
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