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In this item at Fred Sheehan’s aucontrarian blog,
Adam Ferguson’s classic 1975 tome When
Money Dies: The Nightmare of the Weimer Hyperinflation is used as
the basis for ten similarities between the Weimar hyperinflation in 1920s
Germany and the U.S. today.
(1) a high concentration of wealth among
those who leverage
(2) the middle- and lower-classes falling behind, but not
understanding or knowing it (or – knowing it but not
allowing themselves to think about it)
(3) the rise of a gambling culture
(4) including financial speculation on
the stock exchange, which spread to all ranks of the population
(5) the blossoming of a financial
industry, with quantity crushing quality (Weimar bank tellers became financial advisers since most
people were at a loss, and would take any advice, which was often horrible,
but probably well-intentioned)
(6) the “striking displays of
luxury beside poverty” (quoting Fergusson)
(7) a “growing lack of concern for
one’s fellow man” (the difference between greed and the attempt
to survive is blurred)
(8) values are distorted, in both
senses, the one feeding the other: a wife selling her husband’s gold
watch for four potatoes
(9) the quality of goods (and services)
collapses (an evolution with consequences to morale and personal dignity)
(10) denial by the central bank that it is in any way attached
to the inflation
There’s been a good deal of debate
as to whether hyperinflation could ever happen in the U.S. and much of the
discussion revolves around how the term is defined – I’ve always
maintained that a 15 percent annual increase in the CPI will feel like hyperinflation,
neutered as this price gauge has been over the last 30 years. It is striking,
however, that so many cultural changes we see today are just like in Weimar
Germany.
Tim Iacono
Iacono Research.com
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