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Cashin Remembers Germany's Hyperinflation Birthday
Via Art Cashin of UBS,
Originally, on this day in 1922, the German Central Bank and the German Treasury took an inevitable step in a process which had begun with their previous effort to "jump start" a stagnant economy. Many months earlier they had decided that what was needed was easier money. Their initial efforts brought little response. So, using the governmental "more is better" theory they simply created more and more money. But economic stagnation continued and so did the money growth. They kept making money more available. No reaction. Then, suddenly prices began to explode unbelievably (but, perversely, not business activity).
So, on this day government officials decided to bring figures in line with market realities. They devalued the mark. The new value would be 2 billion marks to a dollar. At the start of World War I the exchange rate had been a mere 4.2 marks to the dollar. In simple terms you needed 4.2 marks in order to get one dollar. Now it was 2 billion marks to get one dollar. And thirteen months from this date (late November 1923) you would need 4.2 trillion marks to get one dollar. In ten years the amount of money had increased a trillion fold.
Numbers like billions and trillions tend to numb the mind. They are too large to grasp in any “real” sense. Thirty years ago an older member of the NYSE (there were some then) gave me a graphic and memorable (at least for me) example. “Young man,” he said, “would you like a million dollars?” “I sure would, sir!”, I replied anxiously. “Then just put aside $500 every week for the next 40 years.” I have never forgotten that a million dollars is enough to pay you $500 per week for 40 years (and that’s without benefit of interest). To get a billion dollars you would have to set aside $500,000 dollars per week for 40 years. And a…..trillion that would require $500 million every week for 40 years. Even with these examples, the enormity is difficult to grasp.
Let’s take a different tack. To understand the incomprehensible scope of the German inflation maybe it’s best to start with something basic….like a loaf of bread. (To keep things simple we’ll substitute dollars and cents in place of marks and pfennigs. You’ll get the picture.) In the middle of 1914, just before the war, a one pound loaf of bread cost 13 cents. Two years later it was 19 cents. Two years more and it sold for 22 cents. By 1919 it was 26 cents. Now the fun begins.
In 1920, a loaf of bread soared to $1.20, and then in 1921 it hit $1.35. By the middle of 1922 it was $3.50. At the start of 1923 it rocketed to $700 a loaf. Five months later a loaf went for $1200. By September it was $2 million. A month later it was $670 million (wide spread rioting broke out). The next month it hit $3 billion. By mid month it was $100 billion. Then it all collapsed. Let’s go back to “marks”. In 1913, the total currency of Germany was a grand total of 6 billion marks. In November of 1923 that loaf of bread we just talked about cost 428 billion marks. A kilo of fresh butter cost 6000 billion marks (as you will note that kilo of butter cost 1000 times more than the entire money supply of the nation just 10 years earlier).
How Could This All Happen?
In 1913 Germany had a solid, prosperous, advanced culture and population. Like much of Europe it was a monarchy (under the Kaiser). Then, following the assassination of the Archduke Franz Ferdinand in Sarajevo in 1914, the world moved toward war. Each side was convinced the other would not dare go to war. So, in a global game of chicken they stumbled into the Great War.
The German General Staff thought the war would be short and sweet and that they could finance the costs with the post war reparations that they, as victors, would exact. The war was long. The flower of their manhood was killed or injured. They lost and, thus, it was they who had to pay reparations rather than receive them.
Things did not go badly instantly. Yes, the deficit soared but much of it was borne by foreign and domestic bond buyers. As had been noted by scholars…..“The foreign and domestic public willingly purchased new debt issues when it believed that the government could run future surpluses to offset contemporaneous deficits.” In layman’s English that means foreign bond buyers said – “Hey this is a great nation and this is probably just a speed bump in the economy.” (Can you imagine such a thing happening again?)
When things began to disintegrate, no one dared to take away the punchbowl. They feared shutting off the monetary heroin would lead to riots, civil war, and, worst of all communism. So, realizing that what they were doing was destructive, they kept doing it out of fear that stopping would be even more destructive.
Currencies, Culture And Chaos
If it is difficult to grasp the enormity of the numbers in this tale of hyper-inflation, it is far more difficult to grasp how it destroyed a culture, a nation and, almost, the world.
People’s savings were suddenly worthless. Pensions were meaningless. If you had a 400 mark monthly pension, you went from comfortable to penniless in a matter of months. People demanded to be paid daily so they would not have their wages devalued by a few days passing. Ultimately, they demanded their pay twice daily just to cover changes in trolley fare. People heated their homes by burning money instead of coal. (It was more plentiful and cheaper to get.) The middle class was destroyed. It was an age of renters, not of home ownership, so thousands became homeless. But the cultural collapse may have had other more pernicious effects.
Some sociologists note that it was still an era of arranged marriages. Families scrimped and saved for years to build a dowry so that their daughter might marry well. Suddenly, the dowry was worthless – wiped out. And with it was gone all hope of marriage. Girls who had stayed prim and proper awaiting some future Prince Charming now had no hope at all. Social morality began to collapse. The roar of the roaring twenties began to rumble. All hope and belief in systems, governmental or otherwise, collapsed. With its culture and its economy disintegrating, Germany saw a guy named Hitler begin a ten year effort to come to power by trading on the chaos and street rioting. And then came World War II.
We think it’s best to close this review with a statement from a man whom many consider (probably incorrectly) the father of modern inflation with his endorsement of deficit spending. Here’s what John Maynard Keynes said on the topic:
By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some…..Those to whom the system brings windfalls….become profiteers.
To convert the business man into a profiteer is to strike a blow at capitalism, because it destroys the psychological equilibrium which permits the perpetuance of unequal rewards.
Lenin was certainly right. There is no subtler, no surer means of over-turning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose….By combining a popular hatred of the class of entrepreneurs with the blow already given to social security by the violent and arbitrary disturbance of contract….governments are fast rendering impossible a continuance of the social and economic order of the nineteenth century.
To celebrate have a jagermeister or two at the Pre Fuhrer Lounge and try to explain that for over half a century America's trauma has been depression-era unemployment while Germany's trauma has been runaway inflation. But drink fast, prices change radically after happy hour. And, tell Fed. Chairman Bernanke that it was the “German Experience” that caused many folks to raise an eyebrow when he alluded to the power of the “printing press” a few years ago.
It is why so many, including some of the FOMC, express concern about unintended consequences of each new wave of quantitative easing. (And, if you think no government would ever sponsor wild inflation to liquidate its debt, take a look at Zimbabwe.)
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No risk of that. (tm)
http://www.youtube.com/watch?feature=player_embedded&v=1BxJeTORe7g
Happy Birthday QUADRILLION
I'll sell you a loaf of bread for a google of dollars!
Round it up to an even SQUIDILLION and you have yourself a deal!
What is the current Dollar-Quatloo exchange rate?
Germany is one thing..., but it's different here.... no?
"What is inflation? It sure sounds good though."
- P. Krugman
Jewish confetti for all. History is repeating itself.
Nice story.
In reality, the Bankers were only following a plan. WWII unfolded exactly according to that plan.
Impoverishing Germans while arming Germany was the plan.
It worked.
Real history is much more interesting.
ori
PS: Core underlying failures from the Banker's POV in WWI was the League of Nations Failed and the Jews got no homeland. By 1947, UN and Israel. The rest, as they say is...
If you believe all that, I have a river to sell you in manhatten. It's the manhatten river and it can be yours for the paultry sum of, two quadrillion dollars. You can charge barges to cross your town line, or boats to navigate. You know, navagator, he lives in a swamp until he's turned into a suitcase.
How about I navigate my own river while you navagate your swamp?
Deal?
Now go study some history.
ori
History is sooo old school its not worth repeating.
WWII was "planned" at the same time WWI was decided - a foregone conclusion.
Also, how great is the quote from Cicero in 55 B.C.!
"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance."
please source this quote.....I used to fish with Cicero and I never heard him say this.
In his book, Wall Street and the Rise of Hitler, Professor Antony Sutton provides a thoroughly documented account of the role played by Morgan, Rockefeller, General Electric Company, Standard Oil, National City Bank, Chase and Manhattan banks, Kuhn, Loeb and Company, General Motors, Ford, and other industrialists, in helping to finance the Nazis. To prove his point, Professor Sutton provides bank statements, letters from U.S. ambassadors, mainstream media sources, Congressional Records, excerpts from Congressional Investigations, and statements from the Nuremberg trials. Wall Street's funding of the Nazis is part of authentic history.
Nonsense. WW2 unfolded according to the Bankersa' plan? Do you know how stupid you are when you say these kinds of things? You can plan an invasion of Russia but how can you plan Stalingrad?
If bankers can plan and bring about creation and destruction of nations, they're not just doing God's work, they are the gods. We ordinary mortals just as well obey them and not fight them.
they keep forgetting to graph using a log scale
http://research.stlouisfed.org/fred2/series/M1NS?cid=25
Don't start a war. You will pay dearly like Iran Iraq afroganitan Vietnam Argentina ussr ect.
Loser fucking deserve the aftermath. That's why they are will and want to die DURING the war not in its aftermath
and don't forget the milliard (we call it a trillion I think) as in "the madness of milliards"
AnAnalogousAnusillion 0000000000 x 00
How Could This All Happen?
In 1913 Germany had a solid, prosperous, advanced culture and population. Like much of Europe it was a monarchy (under the Kaiser). Then, following the assassination of the Archduke Franz Ferdinand in Sarajevo in 1914, the world moved toward war. Each side was convinced the other would not dare go to war. So, in a global game of chicken they stumbled into the Great War.
The German General Staff thought the war would be short and sweet and that they could finance the costs with the post war reparations that they, as victors, would exact. The war was long. The flower of their manhood was killed or injured. They lost and, thus, it was they who had to pay reparations rather than receive them.
12/23/1913 Federal Reserve Bank created.
Now you know why...
Is it a coincidence that the ECB was founded just before the start of this crisis? It is an evolution. The Fed replaced the BoE and WW1 ensued. The ECB is trying to replace the Fed, so let’s see where it goes.
The scary thing is that the ECB has no democratic control. It is a stateless entity without its own treasury. At least the Fed could be nationalised or lose its charter. No hope of that with the ECB.
Cashen must be pretty old if he can remember 90 years ago.
Zorba is pretty old too. He can remember when gay meant happy.
"Hyperinflation is preposterous"
Mish Shedlock
I never liked that guy.
Mish is hyperdeflation, right?
Does it matter if you're stabbed, shot, beheaded or drowned?
A dead currency is still dead.
Let's not get up in arms about semantics,
y'all.
We're all talking about the same thing.
Yeah in a world according to Mish you can soon buy a College education for $200 and health insurance for $10 a month.
The fact that "ordinary" deflation is almost vanishingly rare in monetary history (as opposed to currency debasement, which is all too common, and ubiquitous in the fiat currency age), while "hyperdeflation" has NEVER been seen, and is laughably and logically absurd, always seems to be lost on these deflationary flat-earthers.
I think the credit markets could freeze and then explode.
Hyperimplosion?
akak, you forget that the history of the USA is special. things happens in America that the world has never seen, daily... ;-)
Ghordius, you are correct in one respect (although not regarding Americans in particular): It has NEVER been the case, until very recently, that ALL world currencies were purely fiat, and not tied in any way to gold or silver. That is why I think it is a given that the coming financial and currency crises will also be unique in world history, although exactly how that uniqueness plays out I will not even try to guess. Suffice it to say that I highly doubt that the value of the world's fiat currencies, or any one of them, will RISE as a result.
Imagine if you will....
the day people realized their paper gold and paper silver
were just paper, so everyone requested PHYSICAL all at once.
This would cause a collapse overnight.
Is that hyperinflation, hyperdeflation, or just a clusterfuckFUBAR?
semantics, really.
Buy lead. Ammunition is still undervalued and has intrinsic value. :-)
Should I store my silver in paper envelopes? Will that mean that people will pay moar for it?
Ahh, but it has happened in the past.. Remember Rome? They used gold and silver for currency and backed by a superior military... They ruled their world for 500 years..
Then they didn't..
Yes. And in all the Roman rule their interest rate was
NEVER below 3%.
True and Scary story.
Rome had periods were usury was banned.
They also had a mathematical probelm and rates were normally set as some function of 12 i.e, 3, 4, 6, 12, 24, 48%
Rates were also not set based upon market rates or cost of capital in those times.
"Rates were also not set based upon market rates or cost of capital in those times."
The Federal Reserve's 0% interest rate isn't based on market rates or cost of capital now.
How can money be money if it's free?
Or! How can money STAY money if it's free?
What gets me is the difficulty of Roman arithmetic without a base ten monetary system. Not so much as the base ten, but the cumbersome use of the Roman numeral system. The engineering feats as well as the accounting must have been something else without the much later Arabic system of numbers. How did they deal with decimals or was it all fractions dome in the Roman numerals?
To slow down the FED's monetization of all of the off balance sheet sheit, can we force the Fed to express all of their balance sheet in Roman numerals?
Yep, and their decline accelerated after they started debasing the currency.
Could not agree more
@akak---if we look at history, is it possible for us to say that this time it is different? that the sheer amount of derivative exposure--700 trillion i believe, is unprecedented......and therefore a flap of a butterfly could set off this avalanche without the ability of the fed to paper over it...again, i point to guys like david stockman who echo this scenario..................
If this time is different how can Cashin's piece be a simile for the current situation? I was led to this article from the main page by: "UBS' Art Cashin provides the clearest 'simile' for our current economic malaise as he remembers back 90 years..." Not sure why simile was quoted there. In any case my trip here was under false pretenses -- although I do appreciate Art's ramblings. I'll miss the old coot when he goes to visit Mark Haines.
It is the fear of deflation that drives the hyper inflation.
this would mean an average yearly income around $200? for a professor or doctor?
Mish says last guy with a buck in his pocket owns it all.
He's a professional photographer so he should know...
Mish has been right for many years. I rebel as much as any here on his deflation call, but it has been correct. Levering bonds based upon his call would have made you a pile of fiat.
I am quite sure that he disapproves of the handouts to the rotten banksters to support their deflating assets.
"By the middle of 1922 it was $3.50. At the start of 1923 it rocketed to $700 a loaf."
Isn't a loaf of bread about $3.50 today? I figure we have between a few months and a few years before hyperinflation, which is aweful close to following the Germany model of things really getting out of control after $3.50 bread.
A pound of bread and a pound of copper have had very similar prices for a long, long time over history. Is it because they are commodities with similar cost structures?
Isn't is smarter to trade silver and convert the profits to physical gold? No recent international currency standard has used silver, implying gold will be the comparison standard, not silver. Gold is the ultimate basket of commodities.
We are in a global financial crisis -GFC, not a silver solder electronics manufacturing crisis. Photographic film usage was the former poster child for making a small fortune in silver, when you started out with a large one. Ask Kodak how that worked out.
Silver has been neglected as money in recent times, which is exactly why it's such a good investment. Silver does work very well as money and will be gobbled up when the rush out of fiat starts.
Gold works better and bimetallism is just an invitation to arbitrage, especially since silver has far more industrial use than gold.
Gold coming back to settle international trade, maybe ... gold coming back as a backing for currencies, unlikely ... bimetallism, HAH nope.
It's not about "bimetallism." The only question is what do people buy to preserve their wealth as bonds and dollars go worthless? Where will the wealth flow as people try not to go dead broke and try not to see there life's work and life savings vanish before there eyes.
It's pretty tough to stash barrels of oil, silos of grain, and heaps of copper. There really aren't a lot of good currency alternatives. Try and find some. Gold and silver work well as money.
"Hello Mr. #79 and #47....I'd like to introduce you to Mr. Gresham"
But gold works better ... and there is no need for both ...
I'd post a chart but cannot. http://www.silver-coin-investor.com/silver-demand.html
Silver has a VERY comfortable demand curve across multiple industries for some time.
A year ago I took out my gramma's silver teaspoons from my cutlery drawer because I was sick and tired of cleaning them as they always went black. I put them in a plastic bag and stored them away somewhere in my house and didn't thought twice about them until I came to understand the value of silver. Now I can't find them anywhere? Why do I always find out things too late? :(
If you do find them, DON'T take them on any boating trips.
Pink Slime is still cheap, no worries just yet.
Mish Shedlock is perposterous. - Gideon Gono
http://en.wikipedia.org/wiki/Gideon_Gono
But ongoing inflation, and the ongoing decline in the standard of living of most of the world's citizens, is unfortunately reality.
I beg to differ on a detail. in all the hyperinflations I have studied, there were always big chunks of society that profited. In the Weimar Period, for example, workers were super-duper happy, fully employed and swilled more beer than ever in German history. landowner exulted. several trades boomed. industry flew. banks had to expand. I'm not saying this is applicable to a future (possible) hyperinflation, just that I would not be surprised by something similar.
.
"workers were super-duper happy, fully employed and swilled more beer than ever in German history"
Bullshit.....
what do you know about German history? The typical German worker during the Weimar Hyperinflation period was well educated in his trade, rented and had no savings to talk of. He was organized in unions that got every raise they asked and enjoyed, collectively, full employment.
why should he have been unhappy about hyperinflation? because he got payed daily and shopped daily?
in fact, this led to the envy of other classes in society and to the political assassination of a couple of hundred of union leaders...
Wages were lagging price rises as you would expect to happen.
so workers were losing purchasing power even though they were getting good wage increases.
Meanwhile tourists from France were buying up goods and services for cents in the dollar and laughing all the way back home.
In the end many businesses had to close their doors because it was impossible to price anything, ( also capital controls were in place) consequently many workers were laid off.
And finally as always you were unable to easily purchase enough food with your german wages
Sounds really fun.....
happiness is - and this is really sad - a relative thing. those workers were out of WWI and out of the Famine of 1919 (courtesy of the Allied Embargo). and wages were not lagging, due to the strong unions of the time (and one of the reasons of the "Hyper" part). Their purchasing power increased during the three years of the HI - their labour was valuable.
The lay-offs came later, when hyperinflation ended. Then German Labour started to be pissed off and threathened a Socialist Revolution, which then led all the other classes to elect Hitler.
speaking generally, please don't confuse the less common stagflations (like in the 70's) with the other 'flations. historically, during "normal" strong inflations and HIs, you have full employment.
i havent bothered to look this up, but how much was germany-and other countries that suffered hyperinflation--holding in gold during weimar??? if we saw hyperinflation flare, what is stopping our govt/fed from immediately re-pegging to gold to stop the destruction of the dollar (aside from the fact the gold may not be there)?
Well, if they did that, gold would have to explode in price since there are alot more dollars in existence today than in 1971.
But... But... There is not enough of it! ;-)
Pegging to gold means they can't run any more trade deficits without draining the supply of gold out of the country. (If they're already out of gold this is even more of a problem.) It means they have to eliminate medicaire as we know it and pull all the troops out of the middle east.
If the US actually does have 8000 tons of gold or whatever, and they wanted to continue running some kind of deficit, they could peg the dollar to a very high price of gold, say $15,000, which would make it "easier" to pay for their dollar obligations and not lose as much gold, but this would be effectively the same thing as defaulting on all their debts. No foreign entity would be willing to lend money in this scenario, and no foreign credit means no trade deficits are possible. If they tried to peg gold to a number that isn't high enough, say $2000, then all the gold would very quickly drain out of the country, and when that gold is gone, no more trade deficits are possible.
In other words, set the price of gold too high and they can't run deficits. Set it too low and they can't run deficits. Set it just right, and well, they can't run deficits. That is the heart of the issue and it's why politicians will fight to the bitter end to avoid a gold standard until there is simply no other way forward.
thats my point....until there is no other way....i see hyperinflation as improbable..a) because a deflationary collapse in world assets would not give the fed enough time to paper over it or b) if hyperinflation kicked in, they could re-peg to gold as a last resort....
Well, gold has been sub $2000 forever, and its not all gone. As long as someone is willing to take our dollars for their products it works. I think other countries, specifically China, are preparing for our dollar to be worthless. They have it propped up for now. That could change real fast though.
You two aren't making any sense. First you asked what would happen if there was a "hyperinflationary flare" in America. To me, a hyperinflationary flare is (at the very least) triple digit inflation and above-$3000 floating price of gold. Now you're switching scenarios and talking about what they could do in a DEflationary collapse.
Come on, FOCUS.
If you haven't noticed gold is extremely high in purchasing power for the past three years.
Optics such as telescopes and microscopes are unbelievably cheap when priced in gold. Look at houses. A pretty decent two bedroom all brick ranch style house in my area is priced at 29 oz, and that is with all needed repairs. It was well over 400 oz just twelve years ago. Is that deflation?
The level of medical wellfare you want to provide is a fiscal choice mostly independent of trade balance issues, it doesn't inherently require lots of imports (of course the absolute wages in the medical industry have to be low enough to keep consumption down and the relative wages attractive enough to attract labour, but as I said ... that's a fiscal issue).
Mish is correct. Hyperinflation CANNOT happen...but it keeps on happening... because they change the rules to allow it ....because deflation just hurts too damn much...
WHO does deflation harm?
Seriously.
Does anyone believe there is any way to avoid this scenario from playing out in the USA?
If not, are you acting accordingly?
If you could predict the future and you lived in Germany in 1921 (and leaving was not an option), what would you have done to protect yourself and your family?
Move to Brooklyn?
What part of "(and leaving was not an option)" did you not understand?
Pull the stick out of your ass before Roy Battey finds you. This is only ZH, not a frickin' doctoral dissertation.
Stock up on things that have an intrinsic store of value.
This is what today's preppers are doing.
Convert German Papier Marks into Gold Marks.
http://en.wikipedia.org/wiki/German_papiermark
http://en.wikipedia.org/wiki/German_gold_mark
No kidding, this really hits home.
corn and wheat rippin today...heating oil set to spike in NY to $5
food and energy excluded..bhwaaaaa
Sustinance is sssoooo overrated. An AAPL a day keeps the doctor away!
iHeat
Many foods, like milk, are up 20% in the last 6 months.
Got hedge?
Does that mean the 6-month-old jug of milk in my fridge has appreciated? E-bay time!
Brilliant.
The bacteria certainly appreciated. E coli colony doubling time is 17 minutes.
Even that will come to inevitable end!
Parmalat, bitchez!
[edit] and croutons, too!
Sorry dup. Fucking ipad.
it's not the iPad, it seems to be a feature of ZH. Speaking of which, does anyone else have problems with ZH "auto-clicking" on ads for you when you try to change pages?
Eventually that jug of milk will become completely undistinguishable from fresh yogurt.
As long as I exclude my fat ass, my beer belly and my big head I'm at my ideal weight.
I'm with you. My 'Core Weight' is low and stable.
Your weight is fine, it's probably your height that's the problem.
He's not fat, he's just big bonered.
He's not overwieght, he's undertall.
Unpossible. I'm only 8' 7'' tall.
You know.....average. :)
Now , now. Vertically challenged in Newspeak.
Does that mean most Americans would need to be about 9 feet tall to get the right height/weight ratio?
Easily fixed.
1 foot = 10.5 inches
1 pound = 20 ounces
You might be able to say you weigh 125 pounds, but my eyes still tell me that you are a fat ass. No date for you.
Don't trust your lying eyes bro. Go with the New Meth Math.
I <heart> the New Meth Math!
I keep my long term food supply close at hand... close at waist... close at buttocks...
Underneath that beer belly, is a six pack !!!
NICE!
Can I steal that and use it at the gym? It will go well with my comb over. :)
When fraud becomes the status quo, possession becomes the law. Apparently humans are no smarter than yeast.
come on, this is getting stale. And I bet we humans are at least as smart as lemmings
No hyper inflation just yet, first Europe is gona go.
Then by the time it hits the US everyones gona want a global reset anyway
That is what I believe, first Europe actually crumbles and everybody flocks to the dollar and is fleeced again...timing is everything!
"first Europe is gona go" and then "everybody flocks to the dollar". yeah, sure. there must be a think tank somewhere sowing this meme
sorry, pal, some think that the USD is more at risk than the EUR in many, many ways. just two items:
The US has a current account balance of –3% of GDP and a net foreign asset position of 27% of GDP.
The Eurozone has a net foreign asset position of 11% of GDP and a balanced current account (no, the UK would make it unbalanced, but the Brits are not part of the eurozone).
This means the US is much more dependent on foreign investments than the eurozone, nearly three to one. And the US needs every year more investments just to keep afloat. But of course those are facts, not sentiment...
And yet the Eurocrats borrow from the FED, while you have some points since when do facts matter?
If you have no intention of paying it back, always borrow from anybody stupid enough to make a loan.
If by "Eurocrats" you mean the currency swap lines between the FED and the ECB (and the BoJ, the BoE, the SNB and a dozen other CBs - king dollar is still the global reserve currency after all) I dare you or anybody else to paint a simple, understandable picture. I've tried and failed.
Another empty $-PR meme, I fear. But it sounds good in an election year, I presume.
That's exactly my point, there is no understanding it, they could come up with some new BLAH BLAH BLAH and bam things happen. You think the US goes down first, some think Japan, I still say Europe mainly because of Spain and Greece but if you are right, I'll send you a case of your favorite beer, that is if I can afford it with my toilet paper/dollars!
Wishful thinking I'm afraid. All the fuel is already in the furnace ... just needs a match.
Hyperinflation is a real threat to America.
The best way to hedge against is to have hard assets.
The best single (and easy) way to diversify and protect? Buy physical gold!
I beg to differ. Silver is a better purchase.
I'm not sure it matters much, so long as you buy in small denominations suitable for actual day-to-day transactions.
Silver should outperform gold by at least 5X, so it's a matter of an additional 500% of purchasing power.
Buy Railroads. Good luck confiscating that...and trying to pay for things. The fact of the matter is inflation is GREAT for this business...is there a steel shortage? NOT. Oil goes to a thousand a barrel? Power it by electricity. Hyperinflation is hard in the USA because to start confiscating wealth you have to take on 50 Governors and their Attorney's General
Watching the mortgage fraud settlement between the banksters and the states, I don't think it's a big deal for the owners to take on 50 governors and their Attorneys General and own their butts collectively and individually at the end of the day.
There is an excellent summary of Weimar Germany's market and price history detailing the period before and during the hyperinflation. Some stocks went up 16X - in gold!- during the blowoff. The site makes comparisons to the USA which may not be so relevant, due to the situation not being the "same".
Worth reading the German side of the details to track stocks, FX, gold, etc.
http://www.nowandfutures.com/us_weimar.html
Actually, DoChen, "ordinary" inflation is more than enough of a threat to the average American, as our wages stagnate or even fall while the cost of living continues to relentlessly rise.
No, in fact that is not true: ordinary inflation is not just a threat, it is the ongoing REALITY.
I have a hard asset for Lauren Lyster.
Bernanake: "look congress this is no inflation if you exculde food and energy and well everything but the price of air"
silver bitchez
A loaf of bread was $100,000 yesterday?
..but $95,000 today?
BUY THE FUCKING DIP!
in this scenario,
coupons will be king.
and Groupon will still struggle to
make a million.
lol
Let's party like it is 2012... If I can print US Postage stamps at home...I should be able to print $100's? Is that QE 4.0?
Forever stamps, bitchez!
Those could be a good barter investment too. Buy them today at 44 cents and sell them tomorrow for a million.
No matter the price, the service will still be at the same high level we have become accustomed to.
This was a good article.
This is why I read ZH.
Tyler I think it's time for another one of your "pictographics", showing what $16 Trillion looks like.
I'd rather see a pictographic showing what the $1.25 Quadrillion dollar derivatives market looks like.
One stacks of $100 dollars bills.
Does it reach Mars ?
Even Better :-) !
Just look at the $16 trillion graphic 78 times.
+1
Here's that $1.25Q pictograph:
http://www.myastrologybook.com/BigBangCMBTimeline20q.jpg