Hide this

Is the U.S. Headed for Hyperinflation?

November 08, 2008 | 41,420 views

Seems to be the inevitable consequence of devaluation of the currency with the MULTI trillion dollar bailouts that have occurred over the past few weeks. We only have to look to the hyperinflation of the German Weimar Republic in 1923 for a historical precedent. For a more recent example we merely need to look at Zimbabwe.

Before World War I Germany was a prosperous country, with a gold-backed currency, expanding industry, and world leadership in optics, chemicals, and machinery. The German Mark, the British shilling, the French franc, and the Italian lira all had about equal value, and all were exchanged four or five to the dollar.

That was in 1914. In 1923, at the most fevered moment of the German hyperinflation, the exchange rate between the dollar and the Mark was one trillion Marks to one dollar, and a wheelbarrow full of money would not even buy a newspaper. Most Germans were taken by surprise by the financial tornado.

Once they began to run the money printing presses, they were hard to stop. The price increases began to be dizzying. Menus in cafes could not be revised quickly enough. A student at Freiburg University ordered a cup of coffee at a cafe. The price on the menu was 5,000 Marks. He had two cups. When the bill came, it was for 14,000 Marks. "If you want to save money," he was told, "and you want two cups of coffee, you should order them both at the same time."

And what was the purpose of all this insanity?

The fledgling Nazi party, whose attempted coup had failed in 1923, won 32 seats legally in the next election. The right-wing Nationalist party won 106 seats, having promised 100 percent compensation to the victims of inflation and vengeance on the conspirators who had brought it.

Thank you! Your purchases help us support these charities and organizations.