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When Money Dies: The Nightmare Of The Weimar Hyper Inflation

When Money Dies: The Nightmare Of The Weimar Hyper Inflation - Adam Fergusson Just arriving at 1923, aka "the year of the wheelbarrow." Pretty fascinating so far. I had no idea that Austria and Hungary were also such basketcases after WWI. As always, with my paltry education in economics, some of the explanations go over my head. But overall Fergusson does a good job simplifying things for the layman and only includes as much political information as is necessary to understand the economic developments. Also, the British diplomats of the time were quick with a witty jab and I really enjoy the quotes from their reports.

Different situation than we are in, obviously, what with world war and reparations and such, but there are moments when you can glimpse parallels.

Eg. I didn't realize that Germany largely funded WWI through debt and the printing of money, rather than through taxation. Hellooo, Iraq War!

Eg. Resistance to increased taxation and to the abolition of assorted subsidies without a corresponding insistence on decreased government services and responsibilities. ("Tax collection was entirely ineffective, and all State enterprises ran at a huge loss.")

Eg. An ever growing bureaucracy. ("Vienna was found to contain more State employees as capital of a Republic of six-and-a-half million persons than as the capital of a monarchy of 50 million.")

Eg. No expenditure is too frivolous. For instance, Bavaria's leadership, in the face of economic catastrophe, proceeded to double the annual subsidy for encouraging the pursuit of gymnastics. (I just read an article about a poet/PhD student at the Univ. of Denver (and KCK native) who was recently awarded a $25,000 grant from the NEA which she plans to use to travel and write more poems. This one financial outlay, $25,000, will consume all of the federal income tax that was extracted from our household's paychecks last year--plus a few thousand more from some other law-abiding, tax-compliant sucker. Sure wish I had that money so I could pay for some dental work. Or, heck, so that maybe my family and I could do a little traveling ourselves rather than support someone else's trips. How is this NOT state-sanctioned, state-conducted theft?)

Oh, sorry...brief tirade there. It happens to me a lot these days.

Also there's an interesting cameo by Hemingway, making a day trip with his (first) wife from France to Germany and how amazingly cheap their day of merry-making was.

Hard to fathom what it would be like to run your household budget when "an increase of wages granted at the end of one week would not meet the rise in prices by the following Tuesday."

Update: Finished. What was especially interesting about the epilogue is that the author explored the charge made against Germany that the government, in the face of reparations and debt, deliberately inflated the money, to inflate away those debts. (Not that that really worked out, anyway.) He defends Germany ably against this charge, but the leadership still looks terrible. His view is that most of the political and financial leaders truly didn't understand the relationship between the hyperactive printing press and inflation. The belief was that other causes made the mark drop in value against other currencies, causing the inflation, and the government was then forced to burn up the printing presses just to keep up.

And, as he notes: "What really broke Germany was the constant taking of the soft political option in respect of money. The take-off point [at which hyperinflation became inevitable] therefore was not a financial but a moral one."

Not that there could possibly be any comparison made with our cowardly, craven, and corrupt Congressmen and women. Of course not.