Thursday, November 17, 2011

On Germany during the hyperinflation of the early 1920's and current events

"Over most of Germany
the lead was beginning to disappear overnight from roofs.

Petrol was syphoned from the tanks of motor cars.

Barter was already a usual form of exchange;
but now commodities such as brass and fuel
were becoming the currency of ordinary purchase and payment.

A cinema seat cost a lump of coal.

...Herr von der Osten kept a girl friend in the provincial Capital,
for whose room in 1922 he had paid half a pound of butter a month:
by the summer of 1923 it was costing him a whole pound.

‘The Middle Ages came back,' Erna von Pustau said.

Communities printed their own money, based on goods,
on a certain amount of potatoes, or rye, for instance.

Shoe factories paid their workers in bonds for shoes
which they could exchange at the bakery for bread
or the meat market for meat.

Those with foreign currency,
becoming easily the most acceptable paper medium,
had the greatest scope for finding bargains.

The power of the dollar, in particular,
far exceeded its nominal rate of exchange.

There were stories of Americans
...who ran up accounts (to be paid off later in depreciated currency)
...and of foreign students who bought up whole rows of houses
out of their allowances.

There were stories of shoppers who found that thieves
had stolen the baskets and suitcases in which they carried their money,
leaving the money itself behind on the ground;
and of life supported by selling every day or so
a single tiny link from a long gold crucifix chain.

...The ECB now has to either become the lender of last resort
that Europe so desperately needs,
or the Euro must fall.

There is no other choice."

Grant Williams

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