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The Weimar Hyperinflation? Could it Happen Again?
- Text size
“It was horrible. Horrible! Like lightning it struck. No one was prepared. The shelves in the grocery stores were empty. You could buy nothing with your paper money.” – Harvard University law professor Friedrich Kessler on the Weimar Republic hyperinflation (1993 interview)
Some worried commentators are predicting a massive hyperinflation of the sort suffered by Weimar Germany in 1923, when a wheelbarrow full of paper money could barely buy a loaf of bread. An April 29 editorial in the San Francisco Examiner warned:
“With an unprecedented deficit that’s approaching $2 trillion, [the President’s 2010] budget proposal is a surefire prescription for hyperinflation. So every senator and representative who votes for this monster $3.6 trillion budget will be endorsing a spending spree that could very well turn America into the next Weimar Republic.”1
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| As in Weimar Germany, money creation in the U.S. is now being undertaken by a privately-owned central bank, the Federal Reserve. | |
In an investment newsletter called Money Morning on April 9, Martin Hutchinson pointed to disturbing parallels between current government monetary policy and Weimar Germany’s, when 50% of government spending was being funded by seigniorage – merely printing money.2 However, there is something puzzling in his data. He indicates that the British government is already funding more of its budget by seigniorage than Weimar Germany did at the height of its massive hyperinflation; yet the pound is still holding its own, under circumstances said to have caused the complete destruction of the German mark. Something else must have been responsible for the mark’s collapse besides mere money-printing to meet the government’s budget, but what? And are we threatened by the same risk today? Let’s take a closer look at the data.
History Repeats Itself – or Does It?
In his well-researched article, Hutchinson notes that Weimar Germany had been suffering from inflation ever since World War I; but it was in the two year period between 1921 and 1923 that the true “Weimar hyperinflation” occurred. By the time it had ended in November 1923, the mark was worth only one-trillionth of what it had been worth back in 1914. Hutchinson goes on:
“The current policy mix reflects those of Germany during the period between 1919 and 1923. The Weimar government was unwilling to raise taxes to fund post-war reconstruction and war-reparations payments, and so it ran large budget deficits. It kept interest rates far below inflation, expanding money supply rapidly and raising 50% of government spending through seigniorage (printing money and living off the profits from issuing it). . . .
“The really chilling parallel is that the United States, Britain and Japan have now taken to funding their budget deficits through seigniorage. In the United States, the Fed is buying $300 billion worth of U.S. Treasury bonds (T-bonds) over a six-month period, a rate of $600 billion per annum, 15% of federal spending of $4 trillion. In Britain, the Bank of England (BOE) is buying 75 billion pounds of gilts [the British equivalent of U.S. Treasury bonds] over three months. That’s 300 billion pounds per annum, 65% of British government spending of 454 billion pounds. Thus, while the United States is approaching Weimar German policy (50% of spending) quite rapidly, Britain has already overtaken it!”
And that is where the data gets confusing. If Britain is already meeting a larger percentage of its budget deficit by seigniorage than Germany did at the height of its hyperinflation, why is the pound now worth about as much on foreign exchange markets as it was nine years ago, under circumstances said to have driven the mark to a trillionth of its former value in the same period, and most of this in only two years? Meanwhile, the U.S. dollar has actually gotten stronger relative to other currencies since the policy was begun last year of massive “quantitative easing” (today’s euphemism for seigniorage).3 Central banks rather than governments are now doing the printing, but the effect on the money supply should be the same as in the government money-printing schemes of old. The government debt bought by the central banks is never actually paid off but is just rolled over from year to year; and once the new money is in the money supply, it stays there, diluting the value of the currency. So why haven’t our currencies already collapsed to a trillionth of their former value, as happened in Weimar Germany? Indeed, if it were a simple question of supply and demand, a government would have to print a trillion times its earlier money supply to drop its currency by a factor of a trillion; and even the German government isn’t charged with having done that. Something else must have been going on in the Weimar Republic, but what?
Schacht Lets the Cat Out of the Bag
Light is thrown on this mystery by the later writings of Hjalmar Schacht, the currency commissioner for the Weimar Republic. The facts are explored at length in The Lost Science of Money by Stephen Zarlenga, who writes that in Schacht’s 1967 book The Magic of Money, he “let the cat out of the bag, writing in German, with some truly remarkable admissions that shatter the ‘accepted wisdom’ the financial community has promulgated on the German hyperinflation.” What actually drove the wartime inflation into hyperinflation, said Schacht, was speculation by foreign investors, who would bet on the mark’s decreasing value by selling it short.
Short selling is a technique used by investors to try to profit from an asset’s falling price. It involves borrowing the asset and selling it, with the understanding that the asset must later be bought back and returned to the original owner. The speculator is gambling that the price will have dropped in the meantime and he can pocket the difference. Short selling of the German mark was made possible because private banks made massive amounts of currency available for borrowing, marks that were created on demand and lent to investors, returning a profitable interest to the banks.
At first, the speculation was fed by the Reichsbank (the German central bank), which had recently been privatized. But when the Reichsbank could no longer keep up with the voracious demand for marks, other private banks were allowed to create them out of nothing and lend them at interest as well.4
A Story with an Ironic Twist
If Schacht is to be believed, not only did the government not cause the hyperinflation but it was the government that got the situation under control. The Reichsbank was put under strict regulation, and prompt corrective measures were taken to eliminate foreign speculation by eliminating easy access to loans of bank-created money.
More interesting is a little-known sequel to this tale. What allowed Germany to get back on its feet in the 1930s was the very thing today’s commentators are blaming for bringing it down in the 1920s – money issued by seigniorage by the government. Economist Henry C. K. Liu calls this form of financing “sovereign credit.” He writes of Germany’s remarkable transformation:
“The Nazis came to power in Germany in 1933, at a time when its economy was in total collapse, with ruinous war-reparation obligations and zero prospects for foreign investment or credit. Yet through an independent monetary policy of sovereign credit and a full-employment public-works program, the Third Reich was able to turn a bankrupt Germany, stripped of overseas colonies it could exploit, into the strongest economy in Europe within four years, even before armament spending began.”5
While Hitler clearly deserves the opprobrium heaped on him for his later atrocities, he was enormously popular with his own people, at least for a time. This was evidently because he rescued Germany from the throes of a worldwide depression – and he did it through a plan of public works paid for with currency generated by the government itself. Projects were first earmarked for funding, including flood control, repair of public buildings and private residences, and construction of new buildings, roads, bridges, canals, and port facilities. The projected cost of the various programs was fixed at one billion units of the national currency. One billion non-inflationary bills of exchange called Labor Treasury Certificates were then issued against this cost. Millions of people were put to work on these projects, and the workers were paid with the Treasury Certificates. The workers then spent the certificates on goods and services, creating more jobs for more people. These certificates were not actually debt-free but were issued as bonds, and the government paid interest on them to the bearers. But the certificates circulated as money and were renewable indefinitely, making them a de facto currency; and they avoided the need to borrow from international lenders or to pay off international debts.6 The Treasury Certificates did not trade on foreign currency markets, so they were beyond the reach of the currency speculators. They could not be sold short because there was no one to sell them to, so they retained their value.
- A d v e r t i s e m e n t
Within two years, Germany’s unemployment problem had been solved and the country was back on its feet. It had a solid, stable currency, and no inflation, at a time when millions of people in the United States and other Western countries were still out of work and living on welfare. Germany even managed to restore foreign trade, although it was denied foreign credit and was faced with an economic boycott abroad. It did this by using a barter system: equipment and commodities were exchanged directly with other countries, circumventing the international banks. This system of direct exchange occurred without debt and without trade deficits. Although Germany’s economic experiment was short-lived, it left some lasting monuments to its success, including the famous Autobahn, the world’s first extensive superhighway.7
The Lessons of History: Not Always What They Seem
Germany’s scheme for escaping its crippling debt and reinvigorating a moribund economy was clever, but it was not actually original with the Germans. The notion that a government could fund itself by printing and delivering paper receipts for goods and services received was first devised by the American colonists. Benjamin Franklin credited the remarkable growth and abundance in the colonies, at a time when English workers were suffering the impoverished conditions of the Industrial Revolution, to the colonists’ unique system of government-issued money. In the nineteenth century, Senator Henry Clay called this the “American system,” distinguishing it from the “British system” of privately-issued paper banknotes. After the American Revolution, the American system was replaced in the U.S. with banker-created money; but government-issued money was revived during the Civil War, when Abraham Lincoln funded his government with U.S. Notes or “Greenbacks” issued by the Treasury.
The dramatic difference in the results of Germany’s two money-printing experiments was a direct result of the uses to which the money was put. Price inflation results when “demand” (money) increases more than “supply” (goods and services), driving prices up; and in the experiment of the 1930s, new money was created for the purpose of funding productivity, so supply and demand increased together and prices remained stable. Hitler said, “For every mark issued, we required the equivalent of a mark’s worth of work done, or goods produced.” In the hyperinflationary disaster of 1923, on the other hand, money was printed merely to pay off speculators, causing demand to shoot up while supply remained fixed. The result was not just inflation but hyperinflation, since the speculation went wild, triggering rampant tulip-bubble-style mania and panic.
This was also true in Zimbabwe, a dramatic contemporary example of runaway inflation. The crisis dated back to 2001, when Zimbabwe defaulted on its loans and the IMF refused to make the usual accommodations, including refinancing and loan forgiveness. Apparently, the IMF’s intention was to punish the country for political policies of which it disapproved, including land reform measures that involved reclaiming the lands of wealthy landowners. Zimbabwe’s credit was ruined and it could not get loans elsewhere, so the government resorted to issuing its own national currency and using the money to buy U.S. dollars on the foreign-exchange market. These dollars were then used to pay the IMF and regain the country’s credit rating.8 According to a statement by the Zimbabwe central bank, the hyperinflation was caused by speculators who manipulated the foreign-exchange market, charging exorbitant rates for U.S. dollars, causing a drastic devaluation of the Zimbabwe currency.
The government’s real mistake, however, may have been in playing the IMF’s game at all. Rather than using its national currency to buy foreign fiat money to pay foreign lenders, it could have followed the lead of Abraham Lincoln and the American colonists and issued its own currency to pay for the production of goods and services for its own people. Inflation would then have been avoided, because supply would have kept up with demand; and the currency would have served the local economy rather than being siphoned off by speculators.
The Real Weimar Threat and How It Can Be Avoided
Is the United States, then, out of the hyperinflationary woods with its “quantitative easing” scheme? Maybe, maybe not. To the extent that the newly-created money will be used for real economic development and growth, funding by seigniorage is not likely to inflate prices, because supply and demand will rise together. Using quantitative easing to fund infrastructure and other productive projects, as in President Obama’s stimulus package, could invigorate the economy as promised, producing the sort of abundance reported by Benjamin Franklin in America’s flourishing early years.
There is, however, something else going on today that is disturbingly similar to what triggered the 1923 hyperinflation. As in Weimar Germany, money creation in the U.S. is now being undertaken by a privately-owned central bank, the Federal Reserve; and it is largely being done to settle speculative bets on the books of private banks, without producing anything of value to the economy. As gold investor James Sinclair warned nearly two years ago:
“[T]he real problem is a trembling $20 trillion mountain of over the counter credit and default derivatives. Think deeply about the Weimar Republic case study because every day it looks more and more like a repeat in cause and effect . . . .”9
The $12.9 billion in bailout funds funneled through AIG to pay Goldman Sachs for its highly speculative credit default swaps is just one egregious example.10 To the extent that the money generated by “quantitative easing” is being sucked into the black hole of paying off these speculative derivative bets, we could indeed be on the Weimar road and there is real cause for alarm. We have been led to believe that we must prop up a zombie Wall Street banking behemoth because without it we would have no credit system, but that is not true. There is another viable alternative, and it may prove to be our only viable alternative. We can beat Wall Street at its own game, by forming publicly-owned banks that issue the full faith and credit of the United States not for private speculative profit but as a public service, for the benefit of the United States and its people.11
Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her earlier books focused on the pharmaceutical cartel that gets its power from “the money trust.” Her eleven books include Forbidden Medicine, Nature’s Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com and www.ellenbrown.com.
Notes
1. “Examiner Editorial: Get Ready for Obama’s Coming Hyperinflation,” San Francisco Examiner, April 29, 2009.
2. Martin Hutchinson, “Is It 1932 – or 1923?”, Money Morning (April 9, 2009).
3. See Monthly Average Graphs, x-rate.com.
4. Stephen Zarlenga, The Lost Science of Money (Valatie, New York: American Monetary Institute, 2002), pages 590-600; S. Zarlenga, “Germany’s 1923 Hyperinflation: A ‘Private’ Affair,” Barnes Review (July-August 1999).
5. Henry C. K. Liu, “Nazism and the German Economic Miracle,” Asia Times (May 24, 2005).
6. S. Zarlenga, op. cit.
7. Matt Koehl, “The Good Society?”, Rense (January 13, 2005).
8. “Bags of Bricks: Zimbabweans Get New Money – for What It’s Worth,” The Economist (August 24, 2006); Thomas Homes, “IMF Contributes to Zimbabwe’s Hyperinflation,” www.newzimbabwe.com (March 5, 2006).
9. Jim Sinclair, “Fed Actions a Bandaid on a Gaping Economic Wound,” reprinted in Go for Gold, September 18, 2007.
10. Eliot Spitzer, “The Real AIG Scandal, Continued! The Transfer of $12.9 Billion from AIG to Goldman Looks Fishier and Fishier,” Slate (March 22, 2009).
11. See Ellen Brown, “Cash Starved States Need to Play the Banking Game,” webofdebt.com/articles (March 2, 2009).
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May 20th, 2009 at 3:25 pm
It could make a lot of people desperate enough to buy into the single world currency concept.
vueflix Reply:
May 20th, 2009 at 3:43 pm
buy gold and sliver!!
Resist censorship vueflix.com
Raven's Call Reply:
May 20th, 2009 at 3:53 pm
No thanks. Heavy metals would slow me down. Wealth and financial securities are luxuries, not necessities. They’re nice to have, but easily abandoned.
Axewinder Reply:
May 20th, 2009 at 4:43 pm
There will be a time when even gold and silver will do you no good unless you have the rfid chip.
Captain Trips Reply:
May 21st, 2009 at 6:48 am
Lead is more valuable then gold in the present climate.
Daymon Reply:
May 20th, 2009 at 6:52 pm
Buy ammunition and other goods that will last for a long time while having solid value.
Eric Reply:
May 21st, 2009 at 6:28 am
The “buy gold” mantra is a myth. Sorry folks, but it’s true. In an economic collapse the use of gold, silver and other precious metals and even valuable gems are no longer useful because the system has collapsed by that point. Under economic collapse and food rioting the most valuable thing you could own would be anything with which you could barter, such as hand-cranked can openers, small tools, knives, guns, hand-cranked radios, and implements that can be run without relying upon the electrical grid. When you have the opportunity go to your local library and research it, or better yet do some research onlline. Go to your local hardware store and buy lots of spare wrenches, screwdrivers, hammers, saws, and kitchen implements at your local “Dollar” store. Under those conditions you could get that canned ham, or loaf of fresh bread in exchange for a physical tool or weapon they don’t have or which they need.
qi woo Reply:
May 21st, 2009 at 12:29 pm
It can happen as you say,but there is a place in anyones hands for hard assets(you listed some0.If it get as bad as you think,all bets are off.
May 20th, 2009 at 3:32 pm
Those who fail history are doomed to repeat it.
Social Viability Reply:
May 20th, 2009 at 3:54 pm
Since American schools don’t even teach any meaningful history, even if the students pass history, they’re doomed to repeat it.
It’s one thing to exploit and defraud the current working generation, but to subvert and hobble future generations by mentally hobbling children is blatantly evil.
Parents don’t send your children to public schools. Homeschool them and have them read articles like this one.
Don’t fight the system:
Replace it
http://socialviability.com/
Brian M. Reply:
May 20th, 2009 at 6:47 pm
The public FOUL (FOOL) system is NOT Reliable in any sense of the word. There was a false bailout, lousy rescue package, and a junk stimulus bill that took any chance of a real recovery to zero. We allowed the thievery to devalue the fiat BUCK . Our nation is broke as a joke.
Try teaching that and see what happens to your teaching job.
Lisa Reply:
May 20th, 2009 at 7:12 pm
I’m getting my 6th grader out after this year!
Lisa Reply:
May 20th, 2009 at 7:24 pm
Okay…I watched the youtube video and read the text…this is intriguing, but, (and pardon my ignorance) isn’t it illegal to create a new currency? Is it like bartering? I signed up for the free intro…hope it’s not a scam!
Social Viability Reply:
May 20th, 2009 at 8:21 pm
It’s not illegal to create a new currency. I’m sure they’d like to outlaw it, but it’s just not practical. What’s to stop someone accepting payment for something in silver? It’s just not enforceable.
That’s not to say the government can’t manufacture other illegitimate reasons to come after you. For this reason it is important to ensure the government cannot track or monitor transactions in an alternative currency.
Alternative currencies have been attempted but with only limited success so far.
Don’t fight the system:
Replace it
http://socialviability.com/
Rich Reply:
May 21st, 2009 at 1:13 am
They stole the Liberty Dollar lock stock and barrel and nobody seems to notice, nobody seems to care!
Human Bean Reply:
May 21st, 2009 at 10:02 am
I passed. Lucky me.
May 20th, 2009 at 3:33 pm
Very informative article. Thank you.
May 20th, 2009 at 3:49 pm
It will apparent;y and that’s the whole plan the sheep will run and the smart will be prosecuted the rich will reach super human status and travel the universe and alex jones will be with them.
You see he is part of it. I say stop alex jones and f--- his money bomb. I say we fix this now and just us the people and let these so called leaders know that they are f---ing retards for putting money over people or their own worthless ego over people,they will pay in flesh and death. How can you be so stupid to trick people? We are so many and you are posting your stupid fat face on videos man? How f---ing retarded can you be Alex? do you really think we are not finding out about the whole picture and how the vatican is supreme law to bilderberg and it’s members. Alex you better really start talking. People are seeing passed operation mockingbird and they WILL kill you you sick piece of s---,your staff,your wife. You’ve put out too much info but you keep deceiving the people,you are no different than Obama or any other slave man who bought into money and power your followers will kill you for your own stupidity and deliverance to the people in control we know you are merely another puppet,this site would have been dropped a long time ago. we know your connections with these people staged the youtube channel drop,the return and it’s future permanent removal,we are not gonna support your money bomb. How the f--- can we think you are not with them but you are posibly getting and xm channel or an actual radio channel?! and the people in control are letting this happen? why would they? they are suppost to hate you? no!,no!,no! this is just part of the plan. see past operation mockingbird see past the fat none patriotic sexualy perverse Alex Jones and his true goal and agenda. f--- THE MONEY BOMB AND ANYTHING ELSE ALEX COVERS IS PURE s--- CUZ IN THE MIDS OF THE STUFF THAT COULD BE TRUE HE IS BLACKING OUT OTHER COMPONENTS OF THE TRUTH. NOW WHIEE SOME OF IT MAKES SENSE IT SOME HOW FEELS INCOMPLETE WHEN YOU INCORPORATE GIVEN THE STUDIES OF HISTORY AND TIME THE INVOLVEMENT OF THE VATICAN IN ALL OF THIS YOU COMPLETE THE FORM OF THE WHOLE SCHEME. fellas science has made grand discoveries in TORSION PHYSICS that will rewrite everything that we now know as the truth. END THE FED,THE GOVERMENT,THE VATICAN AND CERTAINLY ALEX JONES.
David Stratton Reply:
May 20th, 2009 at 4:48 pm
Hmm. Even if this is true, perhaps direct threats aren’t the best way to solve your problems?
May 20th, 2009 at 3:50 pm
Another great article from a competent economist.
Check out James K. Galbraith’s “Predator State.” He does a great job of dispelling the monetarist myths about the relation between debt, money supply and inflation.
Ron Paul is a great guy, but his economic ideas (supply-side, free-market monetarism) have been thoroughly discredited by a very painful history. We’ve got to move words like “fiat” and “inflation” to the back-burner. They totally miss the point of the problem.
Bailing out the banks was the heist of the millenium, and the money should be clawed back – but the only way out of this crisis is to create some serious public debt to provide employment, health and education, and to build high tech infrastructure.
Strange but true…
Captain Trips Reply:
May 21st, 2009 at 7:00 am
I don’t know Joe,
All we hear about is health, education, and employment yet nothing changes. When the money does go where it is supposed to, education for instance, it is wasted on bizarre ideas coming from the U.N. on how we’re supposed to teach the children. And health care is a joke nowadays, everything is treated with toxic drugs that eventually weaken the subject to the point of death. As for employment, what good is it to build another thousand fast food restaurants or strip malls when what we really need is industry and and massive reconstruction of our infrastructure?
I agree with you that fiat doesn’t equate to some evil scheme. We used colonial script to our advantage in the days of the colonies. It was debt free and kept in balance with supply and demand. What matters in money is who we allow to watch the hen house. For the past 200 years we have been hiring foxes to guard it.
AirborneRanger Reply:
May 21st, 2009 at 8:16 am
Ron Paul’s ideas most certainly have not been discredited by history. Put money issuance back in the hands of congress. Bulldoze the Fed and the U.N. and send them packing with all the other ABC organizations. You’ll find trillions of money right there to fund legitimate, and only legitimate, federal functions authorized by the Constitution. Drive a stake through the heart of lobbyists, especially foreign.
Remember friends, the Constitution mandated Congress “shall regulate” foreign trade. The framers imposed the national obligation to protect this internal free market from predators; it was to be the privileged sanctuary of the American people.
Demand term limits. If you decentralize you’re able to put more money back in the pocket of our fellow citizens where it belongs.
Let the States handle they’re own business.
You don’t get out of debt by creating more debt. Any housewife can tell you that. Although it seems fewer and fewer in this country understand the principle.
If a law is contrary to the Constitution it is null and void. That’s the ticket Baby. Can I make it any clearer?
Slash the military across the board. We’ve got ten zillion nukes for crying out loud. Someone gets out of line slap em down with the necessary equipment and beat feet. We don’t need to be meddling in other peoples business cause we need to jack some more petro in our fricking undermilaged vehicles. We can put a man on the moon but we can only get 40mpg top end to a gallon? Come on were being had.
This isn’t going to happen without a price. You remember those civil rights protests? Remember Gandhi? Marching in taking the clubbing? That takes balls. We have to try that first. Can you imagine ten of thousands of legal Americans of all colors converging on D.C. or the state capitals. I can.
Here’s another thing I want my fellow citizens to take with you who are concerned about the military turning pit-bull on the people. Some yes. We know the units. But there’s a fire raging throughout the ranks who are informed and will turn on the master controlling the pit-bull. That’s why they are on Homeland Security Lists being sent to the States The government is afraid of the vets of all colors who are seeing the light.
May 20th, 2009 at 3:54 pm
Hell yeah!
May 20th, 2009 at 3:57 pm
Open your eyes to the truth.
If You don’t fool me’s comment get’s deleted hahaahahaahahahahaa the consequences.
May 20th, 2009 at 4:06 pm
Yes.
The USA will go down blaming the swine flu for everything…we were recovering, but the swine flu…jobs were coming back, but…
Who can point the finger at the politicians and bankers, when the flu did it, which will be true, true?
Each day is a blessing, make the best you can out of it and love others.
May 20th, 2009 at 4:17 pm
Bankers!
YOU ARE GOING DOWN!!!
http://www.youtube.com/watch?v.....annel_page
jones Reply:
May 20th, 2009 at 5:05 pm
WAY TO GO MAX.
lisapower Reply:
May 20th, 2009 at 6:26 pm
truth words by Max.
iojuy Reply:
May 20th, 2009 at 7:24 pm
Encase you haven’t noticed the people are completely clueless to anything. Which means that the powers are NOT,NOT,NOT,NOT going to be going down.
Sorry.
Captain Trips Reply:
May 21st, 2009 at 7:01 am
Where is there a comment by someone named “Max”?
May 20th, 2009 at 4:18 pm
Alex Jones is a hero in my book. I hope someday I have the honor of shaking his hand.
Bruce Collins
Captain Trips Reply:
May 21st, 2009 at 7:02 am
Wake up Bruce.
May 20th, 2009 at 4:19 pm
http://www.youtube.com/watch?v.....annel_page
Banker-Termination
May 20th, 2009 at 4:26 pm
Great article, thank you.
Captain Trips Reply:
May 21st, 2009 at 10:04 am
I have a boner.
May 20th, 2009 at 4:38 pm
Excellent article. I have been on about this topic for the last 2 months on this website. Its really like hiccups to me at this stage. Hyperinflation! There I go again.
May 20th, 2009 at 4:39 pm
SPREAD THIS:
9/11 Lessons From Star Trek
http://www.youtube.com/watch?v=2CyjD6Ulf6s
dippity doo dah Reply:
May 20th, 2009 at 6:37 pm
teamlaw.org
goldinformant.com
May 20th, 2009 at 4:42 pm
ARREST THE BANKERS … ARREST THE BANKERS … ARREST THE BANKERS …
http://911essentials.com says we can stop this robbery in progress and retake our earned wealth back from the criminals now.
911essentials is a primer portal introduction to the New World Order Corporate Banking Police State, its plans for one world government and their worship of the fake science Eugenics.
repeat the mantra to everyone you see …
ARREST THE BANKERS … ARREST THE BANKERS … ARREST THE BANKERS …
May 20th, 2009 at 4:43 pm
Two things
1) Although the short selling of Weimar’s currency may have begun the process what fueled it was when they began selling their sovereign debt denominated in foreign currencies. Japan’s opposition political party has already stated that if they gain power, they will refuse to purchase our debt unless it is denominated in Yen.
2) Having the nation’s currency issued by the treasury will avoid the interest that would otherwise be paid on treasury bonds, but it still does not limit government growth. They will issue as much money as they want to grow out of control and suffocate the real economy so this is still not the solution.
The solution is to allow private currency creation and allow the interest rates to float and be set on the free market. Busts happen, its unavoidable, but they are necessary to clear out the mal-investments and start over.
May 20th, 2009 at 4:52 pm
Great article, it is well researched and provides a simple way to explain it to others. I like the idea of publically funded banks, and maybe we can recycle our paper bills into floor mats- they won’t wear out and be a reminder of what not to do.
May 20th, 2009 at 4:54 pm
Stream and Download ALL the best interviews and rants from the Alex Jones Show Archives:
http://alex-jones-archives.politicsfiles.info/
Backup your favorite episodes, don’t miss any!
May 20th, 2009 at 5:44 pm
How long we (you), will Play their (Elite) Game?
May 20th, 2009 at 5:44 pm
DID I FORGET TO MENTION THAT I’M A RAGING HOMOSEXUAL?????????????????
THE BIGGER THE BETTER!!!!!!!!!!!
May 20th, 2009 at 5:57 pm
I myself prefer to watch as Rome burns…On a different note I was watching a show called “Deadliest Warrior” which compares modern and pre-modern warriors fighting styles and weapons to see who would win if they ever met. Anyways they did one on the Russian special forces (Spetznaz) and the Green Berets sad to say the Russians won.
Captain Trips Reply:
May 21st, 2009 at 9:33 am
Thanks for the information! Since I haven’t watched any TV in months I checked out Spike online and watched some of those shows. Interesting entertainment. The Spetznaz would have definitely beaten the Green Berets, but Delta Force and our SEALs, not likely.
May 20th, 2009 at 5:58 pm
well, just BEWARE of the money changers. It seems nothing happens until some foreign currency speculators decide it’s time to sell short. If this theory is true, then all we’d need is another adolph to create a soveriegn unchangeable currency. It seems pretty easy, oh except we’d need a good adolph and a people off their daily fluoride
Abolitionist Reply:
May 20th, 2009 at 7:46 pm
No doubt that history repeats itself, because people are dependent on others for their freedoms.
Freedom is complete independence. Modern day slavery = credit cards / loans / etc.
What would you buy or how would you prepare if you didn’t have to pay another penny to the “creditors” or “collectors”?
http://www.debtcrisissolutions.com
Captain Trips Reply:
May 21st, 2009 at 6:47 am
The writer was talking about Colonial Script, what Ben Franklin and the colonists used. It was debt free, controlled by the government and more notes were only printed when it was needed to balance goods and services. Once England found out about the success of colonial script they issued a decree 9I forget the actual name of the decree) but it effectively put an end to our ancestors wealth and happiness and directly led to the Revolution. the Revolution had nothing to do with taxes as most history books read, it was about who controlled the money.
We’re doomed because the International bankers are in control. All of the money Obama and the rest of the liars are printing is going into the pockets of the International bankers. They are consolidating their empire once again, like they did back in the twenties and thirties.
Human Bean Reply:
May 21st, 2009 at 10:00 am
Goes back further than the revolution. Happened in Ancient Rome, for instance. The money was watered down until it became valueless. Hyperinflation, starvation and revolution/dictatorship was the result. The Senators of the day wanted it because they could rule by patronage and were guaranteed votes and power by the starving poor who they gave their daily “dole” of food – the price? Their patrons had to vote for them in order to get their food and stay alive. Total slavery. Sound familiar? This scenario has repeated itself thousands of time throughout history with the same result.
May 20th, 2009 at 6:11 pm
I read a study that examined about 30 different currencies that abandoned the gold standard.
The average amount of time that it took for a currency to collpase was 33 years after getting off gold.
We got off in August 1971…do the math.
Got Gold?
Lisa Reply:
May 20th, 2009 at 7:41 pm
YES!!!! Your point is correct! The whole article leaves out talk of the gold standard. Money has to be backed by SOME thing of value, otherwise it is just paper! That is what I don’t understand about this article. Sigh…
Austrian School=robber-baron economics Reply:
May 20th, 2009 at 8:19 pm
If paper money — instead of being *loaned* into circulation at interest as it is now — were *spent* into circulation at *no* interest to fund the production and repair of public infrastructure (roads, bridges, maglev rail, etc.), then it would be “backed,” in effect, by the value of that production.
Gold coins are a good private investment, but history has shown over and over again that the gold standard is a deflationary “cure” that’s even worse than the inflationary “disease.”
Case in point:
——————————
“[Andrew] Jackson and Van Buren removed the monetary power from the private bankers but did not re-establish it in the hands of the nation. Instead, Van Buren organized the Independent Treasury System, establishing 15 sub branches of the Treasury to handle government moneys in 1840. From December 1836 the government moved toward making and receiving all payments in coinage, or truly convertible bank notes….Once the state bank notes were no longer accepted by the government, their circulation was cut back dramatically.
“This was the closest our nation has ever come to implementing a real gold/silver standard. Operating under the commodity theory of money, Van Buren, who truly cared for the Republic, helped bring on the worst depression the Nation had ever seen, starting in 1837. It was reportedly even worse than that caused by the 2nd Bank of the U.S. in 1819. Bad as the state bank notes were, they had still been functioning as money!
“Those who proclaim that no gold and silver money system has ever failed should consider that whether you are a laborer, farmer, or industrialist, the money system’s success or failure is not measured by the value of a piece of metal. When your job, your farm, or factory has disappeared in a monetarily created depression, the system has failed!”
– Stephen Zarlenga, The Lost Science of Money, p. 426
——————————
May 20th, 2009 at 7:21 pm
Never gets old hearing about the hyperinflation that never comes. Why doesn’t it? Because the powers don’t let it get to that point, just right up to it.
Do you guys get that?
And is that the only single picture of the hyperinflation in Germany?
May 20th, 2009 at 7:40 pm
The smartest man I know says that in 5 years we will see silver coins as a viable currancy for underground transactions in USA.
Captain Trips Reply:
May 21st, 2009 at 10:06 am
I never said that you liar! Pull my finger!
May 20th, 2009 at 7:56 pm
http://www.youtube.com/watch?v.....annel_page hyperinflation is coming
May 20th, 2009 at 8:13 pm
“THE MASTER RACE”
Germany?
Hubris?
Israel?
May 20th, 2009 at 8:47 pm
Listen & Learn !!!
http://www.youtube.com/watch?v=jlOUXWQP-KM
May 20th, 2009 at 8:50 pm
This country could not endure hyper infaltion, the rioting and lawlessness would be breathtaking. Just look at what last summers high gas prices did to the economy, thats where the resession realy began. What is going to happen when a gallon of milk cost’s $6 or $7 dollars…..
EAGLE ONE Reply:
May 21st, 2009 at 1:43 pm
STEAL A COW
May 20th, 2009 at 9:20 pm
New Infowars Wallpaper 1024×768:
http://img38.imageshack.us/img.....15;768.jpg
Enjoy!
May 20th, 2009 at 10:17 pm
Weimar Hyperinflation? After reading this article if you are still confused about hyperinflation in Germany just after WWI do not be too dismayed there is one dubious missing link. Why did the Weimar republic print astronomical amounts of money? They Deutsche Central Bank did not need to print more money than what was necessary to keep the countries price level stable. What this newly founded private bank did was deliberately creat more money to pay off war reparations to Britain and U.S. as fast as the printing press could print the currency. Short selling in London and New York occurred to create more marks so that the German gov’t could get extra help from WWI foes(sic) so as to pay off the war reparations quickly although causing massive damage to Deutschland’s internal economy. Even the certificates that Hitler created to help maintain a stable price level in the 1930s could not be considered sovereign money. The big Q here is Germany needed to buy materials from other countries with currency in some way and I am not so sure that barter was the means that Deutschland did this, remember all those marks that were being payed and short sold in London and New York. It was those marks that were more than likely held in private international financial ‘houses’ that propped up the Deutsche economy.
May 20th, 2009 at 10:24 pm
Even more perplexing is the mega conglomerate IG FARBEN which could be considered one of the largest corporations to have ever existed in the history of civilization. IG FARBEN had interests in virtually every industry in the United States. Plus, many other German companies were operating in the U.S. and other countries so the international mark was by no means weak and Deutsche companies had plenty of American Dollars to play with to bring their economy into a stable position.
May 20th, 2009 at 10:52 pm
Our money gurus are SO much smarter than those guys were back then! That crap won’t happen here. Sure it’s going down in Zimbabwe but our guys know more about producing currency out of thin air than those African dudes, right? So “Don’t Worry, Be Happy”. After all, the same experts have just announced that the recovery has already begun. So it’s just a matter of time before I find another job, and get my forclosed house back, and the price of food & gas go back down to where they should be, and ……
May 20th, 2009 at 11:01 pm
I’m all for a short burst of hyperinflation so I can offload some gold and pay off the mortgage. Besides, we’d probably get the sheep to wake up and vote in a real president with libertarian tenancies.
May 21st, 2009 at 12:07 am
Won’t happen……because the corporations need people to buy their Chinese-made crap!
Without the US consumer….the corporations are sunk!
May 21st, 2009 at 1:18 am
As long as we play their games we loose cuz the game is rigged! Stop playing that game and play a new and better game, life.
Captain Trips Reply:
May 21st, 2009 at 10:07 am
I play ’spin the bottle’ with my dog.
May 21st, 2009 at 4:02 am
Federal reserve can’t bankrupt USA even by printing money out of thin air because the US dollar is the international reserve currency. If the US dollar worths nothing, all the world looses his savings.
The Chinese have no reason to ‘race’ the USA.
“Following release of an essay by People’s Bank of China governor Zhou Xiaochuan calling for a new international reserve currency to replace the U.S. dollar, U.S. Treasury Secretary Timothy Geithner sent the value of the dollar reeling when he appeared to express support for this idea. Geithner has since backtracked and clarified his meaning. The Washington Post reports on comments Geithner made at the Council on Foreign Relations:
Treasury Secretary Timothy F. Geithner said Wednesday that the United States would do whatever it takes to make sure the dollar would remain the world’s dominant reserve currency, clarifying comments he had made earlier in the day that had caused the greenback to fall against major currencies.
“I think the dollar remains the world’s dominant reserve currency,” Geithner said during a question-and-answer session at the Council on Foreign Relations here. “I think that’s likely to continue for a long period of time. And as a country, we will do what’s necessary to make sure we’re sustaining confidence in our financial markets, and in the productive capacity of this economy and in our long-term fundamentals.”
http://chinadigitaltimes.net/2.....dominance/
May 21st, 2009 at 5:04 am
Day of reckoning looms for the U.S. dollar
http://www.financialpost.com/n.....id=1612964
May 21st, 2009 at 6:20 am
F#ck Off!
May 21st, 2009 at 7:39 am
And on a historical note: maybe the monetary system that evolved naturally over two thousand years of free-market economics is better than the one capitalists invented in the last two hundred years of monopolizing money production (aka printing green paper).
Free-market capitalism is an oxymoron.
Lisa Reply:
May 21st, 2009 at 11:08 am
I am fairly new to this economic debate, but I AM learning a lot, and have recently stumbled upon a term called “political economy” which I think correlates to the above article. Have you ever heard of this? Promoted by guys like Bastiat, John Locke, Liszt.
Regarding your oxymoron idea:
If religions are named Buddhism, Judaism, Hinduism, etc….wouldn’t that make “capitalism” a religion that worships wealth? (don’t get me wrong…i am not a marxist!)
So then, “free markets” actually defines an ACTIVITY, not a worship mode.
What do you think? Of course, free markets can be hijacked and abused to amass wealth and power, as do the global corps. and banks; terminology and definition can be tricky sometimes!
May 21st, 2009 at 10:05 am
I’m not wearing any underwear.
May 21st, 2009 at 10:08 am
I had a big can of Bush’s Baked Beans for dinner, WATCH OUT!!!
May 21st, 2009 at 11:13 am
Once our military stands down and stop taking illegal orders, we can begin again.
May 21st, 2009 at 11:16 am
Alex Jones is right most of the time, but his belief in U.S. Treasury issued ‘bills of credit’, i.e. paper money, either fiat or fiduciary notes, is just as faulty a money system as the private Federal Reserve’s system of central bank issued fiat notes. And it’s just as unconstitutional. In Article 1, Section 8, Congress is granted the power “To coin Money, regulate the Value thereof…..and fix the Standard of Weights and Measures;”. In Section 8, we observe an assortment of positive, enumerated federal powers granted to the federal government’s legislative branch. Now look at Article 1, Section 10 wherein a negative rescindment of state powers that were previously open to, or held by the various states is listed. Section 10 states that “No State shall……coin Money; emit Bills of Credit”. Clearly the states were prohibited by the Constitution from issuing their own “Bills of Credit” and to “coin Money”. However, when the Constitution omits a granted power to the central government it means that the federal government can not assume that power, and clearly “Bills of Credit” (paper money) is NOT a granted power to the federal government. Moreover, the punishment for counterfeiting in Section 8 lists only “(Treasury) Securities and current Coin of the United States;” as the only two items that can be counterfeited. Again, ‘bills of credit’ are not listed here because the federal government was not granted that power. QED. The founders wanted to avoid a repeat of the hyperinflationary pitfalls of the Continental, which was printed in mass excess by Congress to fund the war effort during the American War for Independence.
The solution then lies with a free banking and sound money system, wherein commercial banks would issue their own fiduciary paper notes as they did from 1812 to 1815 and from 1837 to 1862. Both a central banking and a national banking system with their fiat issued paper currencies has always been the bane of any free market economy and the tool of statists, despots and collectivists. If it’s possible to abolish the Federal Reserve System, it’s also possible to restore free banking and sound money without having to return to Lincoln the Dictator’s national banking system, which was nearly as bad as the banking cartel’s central bank. Freedom can work in economic systems just as well as in political systems.
May 21st, 2009 at 11:47 am
Ellan Brown,
Thank you, for presenting some logic into the situation at hand.
Confusion, mis-information & blantant Lies will not be appreciated & will be rejected.
Is this what is being presented for why Our Government is doing what they are doing?
So, WE need a Dictator like Hitler or an Abe Lincoln? (according to who “they are talking to)
What the Big Problem is. The Deceit.
People “in the know” maybe, being told, this is for our own good to justify what si going on.
Is it to save our Economy or to lead us where the private Bankers want us to go (NWO)?
When you start from the position of lying to everyone you will not get the people’s support. Which is what is needed.
If Our Government would “level” with us then you would find support (if “they” were not about to strip people of their FREEDOMS).
My mother told me of the Depression & war time. People rallied around to help Our Government & sacraficed.
For a Free Country
NOT
A Communist Country!
You do not have the numbers nor the support. & you know it!
If the Elite wasn’t so “out of touch” with the American People they would know that!
Give the People an Olive Branch if you intentions are good.
Throw the Usurper & Gang OUT & then let’s have an honest conversation.
May 21st, 2009 at 12:38 pm
For some answers: Money As Wealth
May 21st, 2009 at 1:27 pm
Been saying it for YEARS — Gold & Silver
http://www.bullionmarketwatch.com
May 21st, 2009 at 1:40 pm
1. Hyperinflation is caused by unpayable interest rates – not by “printing” too much money.
2. Gold and silver is not the only answer – wealth money is.
I am not sure why the comment I posted does not appear.
Whatever.
Find the articles on Weimar and Zimbabwe here:
Money As Wealth