Dr. Mercola November 08 2008 30,066 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.
on the upside...when cars aren't fixable/affordable, ditto fuel for them,the obesity and other problems will lessen as people rediscover pushbikes and walking.From the clips above, advice to save in banks..is futile. paying off as much or your mortgage immediately, as you can would be wiser.And stocking up on the BASIC needs. cereal,grains,nuts,dried fruit maybe?shop wisely, buy up a few extra when anything is going cheap.ditto home treatments for illness.solar portable panels for when the grid is either off or un affordable. dry ,canned and bottled food keeps without a fridge!buy a wheat grinder not a bl**dy plasma screen or new lounge. sum up what you need! not what you want!! total what your family eats in a month. so? can you keep doing it this way, my guess is -not. what non essentials can be trimmed. and that means chocolate chips fizzy drink etc.This event may make you poorer, but save your life, in the long run.Get out of Iraq and save millions a day!! and your servicefolks lives.Start a small home business that uses locally available product. If you have any land, plant fruit trees. and grow any vegies you can. keep chickens or rabbits for food, and as mulchers and fertilizer producers to cut cost there too.small communities of people will fare better when the poop hits the fan. find like minded people and network now for bad times ahead. ie a mechanic , can help a farmer keep gear going in exchange for produce.,being great in an office is good for? not much in the real world! learn a physical useful trade, learn to sew,cook , repair, carve and woodwork etc. when you can't buy it, you need to make it or fix it yourself.Buy clothing and shoes that may not be pretty, but will last.Take your support of the giant companies away! look to network/private company products, they employ people more fairly, and the money circulates locally.The products are usually better and safer too.By the people, for the people? isnt that how it was supposed to go???
This juvenile type of thinking is unbelievalbe.
If you are thinking survivalist, then invest in stuff that makes you independent and will have value no matter what. Like gold, guns, ammo, real estate and a reliable bicycle.
Ultimately it doesn't matter if we bailout no one or everyone. A fiat currency system will always implode at some point.
The cure is easy though not without pain and suffering: (A) The federal gov't must declare bankruptcy -- not to liquidate but rather to reorganize the debt. (B) We must demand that Congress END THE FED! (http://endthefed.us). Call, mail, email, fax your senators and representative and tell them to pass HR 2755 introduced by Rep. Ron Paul. And demand a gold and silver backed currency as the U.S. Constitution demands (See US Const Art I, Sec 8 and 10). (C) A Bretton Woods type conference must be called by the federal government with the other economic powerhouses (China, Russia, the EU, India) to negotiate an exchange rate.
Don't expect to see this go down without bloodshed and probably the Second American Revolution, however. The international banking mafia is not going to die easy. But they must be taken out of power.
If everyone receives $1,000,000 checks from the government tomorrow, prices for goods would quickly adjust upward and no one would be the richer.
Of course those who ran out and spent it first would benefit from using their money before the prices rose.
Those who weren't so quick, or decided to save their money, would watch the value of their million, in terms of what it is exchangeable for on the market, rapidly decline.
This is inflation. Governments and their contractors get the "new" money and use it in the "old" economy. As it spreads, prices rise, which means that those who don't get early benefit of the new money watch the value of their savings and paychecks decline.
Check out the Zimbabwe link. The government is handing out bills to its citizens denominated in HUNDREDS OF BILLIONS OF ZIMBABWE DOLLARS. Wow! Everyone's rich!
Yet I don't see everyone rushing to immigrate to Zimbabwe because there you can become a billionaire overnight.
It doesn't matter if you earn $1 a week, as long as your rent is $1 a month and all other prices are correspondingly low, then $52 a year is just fine.
Prices will always rise with government fiat currency because the government cannot resist printing up free money and using it. This inflation taxes away your savings. A day's wages put aside as savings in 1908 would be worth 15 minutes worth of wages today. This is a 97% taxation (robbery) of your property.
Today's economists say a little bit of inflation is good. This is not unlike claiming that a little bit of mercury in your system is good. The truth is that it is always bad, but if no one is really paying attention because the outward effects are subtle enough...
The coming world inflation will be anything but subtle, so now is the time to dump these funny little paper products and reinvest in things that have market values that do not depend upon a government declaration of value.
An ounce of gold saved away in 1908 was worth $20.67. What's it worth today?
I'm not sure what you are saying here. If 15 minutes of labor today would buy what it took a whole day to pay for in 1908, that is saying (assuming an eight hour work day in 1908 that real wages today are 32 times what they were in 1908.
This sounds pretty good, and I would not be surprised if it is true.
If this is what you are saying, it hardly seems like robbery. I'm recalling from memory, as I furnished these data to my class last week, but I believe real GDP was about 900 billion in 1929, and it is about 11 trillion today. (source: www.bea.gov, Current dollar and Real GDP accts.) Even if a lot of the 11 trillion went to Iraq, we are a lot richer nation today (producing much more goods and services) than in 1929. Even on a per capita basis, we are much richer. Real wage rates have had a similar rise since then, although I don't recall these data from memory.
xyzsch:
Inflation causes prices and wages to rise, but not savings. It doesn't even matter if wages rise faster than prices, the fact remains that rising prices is equal to devalued savings.
Why should a man's labor, set aside in the form of savings, be destined to buy less in the future? If I save enough for a car, but decide to wait 10 years, why can't those savings still be able to buy a car? Who took the value from my savings? Why is work done in the past worth less than work done today?
It's not. It's being taxed away.
Government creates inflation, which is their way of taxing savings. To me, that is robbery.
And since you brought it up, I respectfully beg to differ with your opinion that we are richer today than we were in 1929.
In 1929 we were running a slight trade surplus, no national debt, and $900 billion in GDP (in 1929 dollars!). There was no country richer.
Now we have an $11 trillion GDP, $10 trillion in debt, and a $900 billion trade deficit. And since it is all calculated in fiat dollars, which is nothing more than monetized debt, how is it exactly that the world's largest debtor is rich?
We have stuff because creditors, the rest of the world, have let us run up a tab.
Payment due date is approaching.
Two points of clarification:
1. Real (inflation adjusted) interest rates have generally been positive in the past. People are only willing to lend if they do not lose by doing so. I do not have data off the top of my head on this, but I am confident of this.
2. The GDP data I quoted are real GDP figures in 2000 dollars. Thus the $900 billion figure is NOT in 1929 dollars. Nominal GDP for 1929 was closer to $100 billion dollars. So again, the data tells us the nation's output has increased more that ten-fold since 1929. In spite of inflation, we have done pretty well in the last eighty years. Check the bea website to verify that I am correct on this.
Right now, the Fed is more concerned about possible financial collapse and deflation. deflation raises the real rate of interest, and thus makes borrowing more expensive. Food and energy are very volatile, so we will have to watch closely what happens to prices in the next few months.
I agree that we have to address the trade and budget deficits. We cannot continue to be a debtor nation forever. Something has to be done about the growth of entitlements, especially health care.
People tend to forget that the *** weren't truly "right" wing. They're fond of calling them that, perhaps to make themselves feel more comfortable, but the fact is, the full name of the Nazi party was "The Nationalist SOCIALIST party"! As far as I am concerned, the US is already there. We have the nationalist part: "We're the policemen of the world". And for the socialist part, well, just look at how the government is expected to redistribute wealth! (Aka as the welfare state).
We even make lampshades from the hides of the dead. Well, no, not literally, but the NIH has a price list (I've seen w-my own eyes) for dead baby parts, from aborted babies. ("Because they're dead anyway, so we might as well use them".) And don't anyone ever tell me "we're different from the ***" because we're not.
I read a book written by a man who was involved with the communist party in Germany during WW I and II. From his account, I learned that there were MANY different political parties at that time. The ***, communists, and socialists were three distinct parties that didn't actually agree on much. The more I learn about the differences, the more amazed I am that having grown up with an American education, I thought they were all esentially the same.
On that note, I did live in Norway for some time and it proudly considers itself a socialist nation. It is certainly not perfect, but the standard of living is very high. Makes me think that we Americans shouldn't be so quick to vilify a system just because we all grew up thinking that "socialist" is a bad word.
I'm not sure what the perfect system is, but it's probably not complete unregulated capitalism either.
@Veslemor
Theoretically, socialism should work, but most of the time, it forgets to factor in Human Nature. Mankind needs incentive to work and be productive. That's why it's so hard to get off of welfare. At least in VT, you can get more in benefits than the average VT worker. Why go out to find a job?
Norway may offer incentives for those who work hard. The more incentives, the more productive people become, the more productive, the higher the standard of living. The type of socialism that the US is trying to embrace, encourages laziness. I know a few people who have taken a few "sick days" to avoid paying into the higher tax bracket.
Nanciesweb,
What do you consider incentive? What about working for the advancement of humankind or for personal satisfaction? Have you ever seen Zeitgeist Addendum? This is precisely the topic of the movie. Firstly, the movie proposes that there really is no human nature. Our adaptability is our strong point. We have adapted to the idea that we need something outside of ourselves to provide us with an incentive to "work". Did you know that many ancient cultures had no words to differentiate work and leisure? Without "work" the human brain would be free to create things we never dreamed of while we were busy, busy, busy at our jobs which (many) create nothing of any real benefit to anyone.
To put it bluntly, many of you have a slave mentality. You believe that your masters provide order for you. That something outside of yourselves must provide you an incentive to be productive. This is such a complete dis to humanity. Let's stop thinking of ourselves as so... dirty. For pete's sake we only use a tiny fraction of our brains! God only knows what we're capable of! We're being held back, people! Our current society is HOLDING BACK our advancement/evolution.
Watch Zeitgeist Addendum. It will deprogram you right quick! (When I say you, I'm not speaking directly to you, nanciesweb, but everyone reading this.)