On The Descent Into A Weimar Reality

Tyler Durden's picture

Thanks to our very own printing-historian hybrid, Ben Bernanke, all people who wish to understand the direction in which the economy is headed are now experts on the Great Depression. Yet more and more pundits claim that the true historical analog to our current tumultuous times are not the days after 1929, but the period between 1919 and 1923 in post WW I Germany, also known as th Weimar Republic. Attached is a summary presentation on the three critical pathways that shaped Germany in the interregnum, and set it off on a course to the Second World War. These three avenues were i)the infamous hyperinflation and associated meltdown, which even now is causing so much consternation for German politicians dealing with a suddenly printer-happy ECB, ii) the French invasion of the Ruhr, and iii) and the failed Munich Beerhall Putsch. As many see QE as a precursor to i) above, and ii) is currently playing out in various parts of the world to a lesser or greater extent, the question remains when will some disgruntled citizen rise out of the disenfranchised masses and replicate the so far missing iii). With recent developments within the tea party movement, and with the administration's plunging popularity rating, it is not a far stretch to see all three core Weimar "factors" replicated in our own back yard with a 90 year delay.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Alcoholic Native American's picture

The government cheese must flow, come on now, been living on a military base my whole life, thought yall knew this.

Quinvarius's picture

Rather simplistic.  If you want some fine detail...


A link to charts is at the bottom.

Yardfarmer's picture

Thousands of Austrians have been reduced during the last days to beggary. All who were not clever enough to hoard the forbidden stable currencies or gold have, without exception, suffered losses. An old married couple with whom I have been friendly for years had a holding of government stock amounting to 2 million pre-war kronen which brought them in interest 80,000 pre-war kronen a year [more than £3,200]. They were rich people. Today their stock brings them in 8 new schillings a year. Panic has seized the Stock Exchange. My millions have dwindled to about a thousand new schillings. We belong to the new poor.

Pat Hand's picture

"It is not a far stretch..."

whew.  yes, in fact, it is.   Each of the three is a significant stretch.  It doesn't look like any of them are present.

I am willing to wager large sums (and in fact, am wagering such) that "Weimar" is not remotely the right analogy.

APC's picture

LOL.  Lets get through the debt deflation first, shall we?

APC's picture

Sorry, a little simplistic.  Inflation is not the major threat here.  And I say threat.  We're not really threatened, but are actually in, a deflation.  Mild as it may seem now, its going to get brutal before long.  IT HAS TO.


We'll see what the politicos can pull out their asses after that, but we do have to go through a deflationary period before ANYTHING else can occur.  Hyperinflation?  Perhaps.  Maybe even war.  But DEFLATION first.  Keep that in mind when you're thinking bout bying gold.  May be best to wait on that decision.

tmosley's picture

We already had deflation in gold.  Remember the big drop down to $700?  That's probably not going to happen again.

Spitzer's picture

Gold was up $25 on the day of the flash crash.


timhinchliff's picture

Your thinking of gold as an inflation hedge which it isn't strictly. Its THE safe haven. It is difficult to get more of it. It will maintain some sort of value integrity regardless of what happens. If we descend into deflationary or inflationary chaos someone, somewhere will take your gold either way.

I would be very reluctant to make that comment about any of the fiat currencies.

Pat Hand's picture

Yes.  Gold is not an investment, but it's a good store of wealth.  I.e. it's money.

Kimo's picture

Unfortunately, ZIRP has morphed Gold's store-of-wealth into a store-of-leverage nightmare. Margin call anyone?

Al Huxley's picture

Gold is simply a static store of wealth, primarily due to its unique characteristics that make it a good form of money - as in a proxy/alternative to bartering for actual goods.  Its done this for thousands of years for a reason.  Deflation or inflation is irrelevant with respect to gold - look at its peformance in previous deflationary periods.

Al Huxley's picture

Hyperinflation is the currency crisis that follows credit deflation.  Without the hyperinflation phase, those who got out of debt and accumulated USD would be disproportionately rewarded simply for hoarding a worthless currency.  The BIG picture is about rebalancing, transferring wealth from the rentiers to the producers.  This is not new, has happened repeatedly over the last 1000 years.

Al Huxley's picture

And by the way, if you don't get it, you don't get it.  That's fine.  You'll figure it out in the fairly near term, one way or the other, based on the way things are going.  I've never understood the implicit altruistic impulse of goldbugs who try to convince others that 'gold is money'.  If what they say is true (and I believe it is), they don't need to convince anybody, just wait for the inevitable to assert itself.  Why try so hard to 'save' the non-believers?

AnAnonymous's picture

So your final analysis is: rentiers will get done and producers will be winners?


Ted Smoothie's picture

Under normal market forces, you're right about deflation. Inflationary bubble followed by deflationary recession. But the Gov't/Fed, besides creating huge moral hazard, are pumping trillions of dollars, in classic Keynesian fashion,  into the economy in the forms of bailouts, stimuluses, cash for clunkers, home buyer's tax credit, quantitative easing, and near 0% rate at the discount window, in order to bypass the deflationary period.  So whatever deflation has happened by this point (real estate and autos are the only examples i can think of) is about it.  Inflation is coming, and it will hit us like a ton of bricks. Holders of only paper (cash, stocks, bonds, ETFs, etc.) are going to get crushed, IMO.

Kimo's picture


Deflation is not finished until "extend and pretend" has become "realize and weep". Then take your cash and buy gold if you wish.

Look for inflation when you are rushing out to buy a house again.

Look for hyperinflation when it is easy to job jump to keep up with the Jones.

Mitchman's picture

The tea partiers have more in common cause with the posters on ZH than with anyone around:  a) they hate the government as it is being run for the benefit of the elites; b) they hate the MSM; c) they distrust almost any government program instituted for "the good of the people"; and d) they have this notion that people should actually work for a living. 

Fred123's picture

Typical leftist comment. Ignorance is a common trait of your breed eh?

Al Gorerhythm's picture

That's supposed to be leftist? You must sit to the far right of Jefferson at the dinner table I guess.

Fred123's picture

The comment I had replied to has been removed.

Mitchman's picture

You may be right.  Unfortunately, that is what the great unwashed of America are all about regardless of political stripe.  You have likely seen the various youtube videos where people get asked a simple question (name a country that starts with the letter "u") and can't answer (one answer was "Europe").  The votes of all these very same morons count every bit as much as yours or mine-whether they belong to the Tea Party or not. I don't see many people walking the streets these days claiming superior inteligence for having voted for Obama.  

SWRichmond's picture

APC said: "Oh, and by and large, they're morons too."

Mitchman said: "You may be right.  Unfortunately, that is what the great unwashed of America are all about regardless of political stripe."

You know what?  47% of Americans didn't pay any income taxes last year.  That's not us; we work, and actually support ourselves.  You can call us morons or the great unwashed if that makes you feel superior, but let's be clear: I understand exactly what you mean, and I'll remember it.  I'm really fucking tired of attitudes like yours.  Really, unimaginably tired of it.

terrible's picture

Medically, this is known as moron-fatigue.  

That is, a minor form of fatigue caused by discussion with morons that support tax increases and a more powerful system of wealth redistribution.



APC's picture

Hey, you remember it!  Lol.


Vote Sarah!

SWRichmond's picture


Forty-six percent (46%) of U.S. voters say the Tea Party movement is good for the country, according to a new Rasmussen Reports national telephone survey. Thirty-one percent (31%) disagree and say it’s bad for the country. Another 13% say it’s neither.

But just 16% of voters say they are actually members of the so-called Tea Party, a loose knit group of Americans nationwide protesting big government and high taxes. This is down eight points from a month ago  and but little changed from two months ago.  The spike in identification with the Tea Party followed passage of the health care law. Most voters continue to favor repeal of that law.

The Tea Party is definitely not a Political Class phenomenon, though.  Not a single Political Class respondent in the survey said they’re a member of the Tea Party, but five percent (5%) confessed that they have close friends or relatives who are.

Sixty-one percent (61%) of the Political Class say the Tea Party is bad for America. Two-thirds (66%) of Mainstream Americans see it as a good thing for the country. However, it’s important to note that only a little more than half of all Mainstream voters consider themselves to be part of the Tea Party movement.

But the Tea Party movement defies easy description. Rasmussen Reports surveying, however, provides some glimpses into the movement, including the overwhelming beliefs among its members that the federal government is a special interest group and that government and big business work together in ways that hurt consumers and investors.

So, which part of this do you disagree with?

Oracle of Kypseli's picture

It may be true that good old boys in the South still think that Modigliani and Botticceli are just fancy pizza toppings, but when the government starts messing arround with high taxes and their guns, they have the guts to take their country back.

What are you gonna do about it?

Mesquite's picture

> Mitchman #388236

Ha Ha Haa

Teaser's picture



'Nuff said

RottingDollar's picture

I'll add your version of a Tea Partier to the 100 other different versions.  

2012 will prove interesting as all the splintered groups try to find a common voice.   Both parties in trouble. 




Mitchman's picture

As we saw in financial "reform", both parties deserve to be in trouble.

Crisismode's picture

I would like to see how much the TeaPartiers would like to get rid of all those government programs that take care of thier elderly parents and relative.


Yes, let us get rid of Social Security.


Yes, let us get rid of Medicare.


And now, let us foist your elderly relatives back on you to care for in their remaining days.

You will have to provide the funds that the evil government used to provide through SS and MC.


Are you up to it?

tmosley's picture

I already do it for mine.  With no support from any government programs.

The "government" didn't provide shit.  They take money from workers to pay retirees.  Without having to pay those taxes, most people would come out ahead.  In any case, Ron Paul and his cardre aren't for simply repealing those programs.  They would fund them by dismantling the military empire until the program could be dismantled without screwing over anyone who was relying on SS.

Dantzler's picture

Why should I support SS when I'll never see a dime back (I'm under 40) ?

Cut me a check for everything I've paid into it and let's call it even.

DoChenRollingBearing's picture

I'll never see any SS either, and I'm 54.

Not enough years working for "somebody else".

masterinchancery's picture

I am already caring for them, with some help from SS which they paid for while working.  As to the future of Medicare, etc, it doesn't have one in the long run, regardless of your wishful thinking, absent maximum money printing by Banana Ben. 

Tapeworm's picture

My mother-in-law consumes more per year than I make as an an owner of a business that has a capitalization of more than 120k per employee.

 I am 59 and will likely get nothing from your SS, even after paying the max for two decades. The "tea" factions are for the most part writing off your junk, but want to be left alone in exchange. Your type finds it expedient and satisfying to force the plebeians to pony up to maintain your life choices.

 Your most caustic vitriol is directed at those of us that refuse to play your games of servitude. Leave the exit borders open so that we will no longer sully your paradise on earth.

Al Gorerhythm's picture

As it should be. No middleman waste.

fearsomepirate's picture

I already provide the funds that the government provides through SS and MC.  It's called "FICA taxes."

terrible's picture

Hahaha, when your "evil government" defaults, social security or medicare checks will bounce.  

Both sets of my grandparents support aggressive cuts to the ponzi schemes out of love for their family.  

UGrev's picture

OMG taking care of you parents? GOD FORBID you should ever want to care for the people who raised you. 

I'm all for getting rid of SS and Medicrutch. It will be a struggle for everyone who hasn't saved enough, but it will usher in new generations that understand that there is no free ride anymore.

Zina's picture

"they hate the government as it is being run for the benefit of the elites"

In fact, tea partiers have no problem with the elites. The same people who now are tea partiers have never said nothing against the elites between 1950 and 2007. That time, the elites were OK for them...

tmosley's picture

Amazing that you can speak for 1/3rd of all Americans, and tell them exactly what they have been doing for the last 60 years.

FYI, I, and many others have been fighting the expansion of government for years.  We finally managed to plant a seed that has taken root, and is spreading throughout America.  This movement is the result of a LOT of hard work.

Zina's picture

Where you were when Bush started a war on Iraq that has consumed trillions in taxpayer money?

Specifically, where you were on February, 15, 2003?

I doubt you were there:


Chupacabra's picture

Zina, many Americans have been fighting US government expansion and the "welfare/warfare state" since the late 1950s and early 1960s, and ever since.  We've just been so wealthy as a country (living off the backs of those who came before us), and had so much accumulated capital and goodwill, that the "bleeding hearts" and big government types have managed to prevail incrementally.  Many of us complained vociferously to our representatives along the way (including the Patriotic Act), and were not fooled by Bush's rhetoric.  Believe me, many of us have been here for a long time, it's just now that the proverbial shit is hitting the fan that peopel are starting to listen.  Americans are by and large good, hardworking, generous people.  We've been co-opted by our government and banksters.  We're trying, man!  :]

Where are you from, Brazil?

Imperial Distrust's picture

Bravo to Chupacabra, come to Texas we need more like minded individuals