JackRiddler wrote:.
Ellen Brown's article argues for what I've been saying. She says the German hyperinflation was not primarily a strategy of the government, but a function of foreign speculation exploiting the insight that Germany could not repay its World War I debts. (Vultures!) Clearly, the devaluation of the currency by trillions was out of proportion to the amount printed or the seignoriage, as they called it. The issue was the inability to pay, and the resulting assumption of a political as well as economic crisis.
She doesn't mention that the Reichsbank (under Schacht) was able to reboot the currency after 1923 and the good years of Weimar followed. The disaster that led to the Nazis taking power came because of the Depression, in the years of deflation following 1930.
The foreign speculators who did the run on the Reichsmark in the early 1920s did it for gain. Their counterparts with regard to the dollar today would be BRIC, EU, London, Japan and lots of big banks and corporations that hold dollar reserves. They won't do such a thing unless they see gain. I expected they would as far back as 2004, influenced by the hyperinflationists of that time. I was wrong, the dollar's value underwent a correction but no collapse. The other powers don't want that yet, so it won't happen by plan. Yet. They are preparing or at least hedging for it with bilateral trade agreements in their own currencies. In the Wall Street thread, I have delineated a mechanism by which they could in fact convert their dollars into a new mechanism for settling trade balances amongst themselves. But if and when they do this, it will be primarily a political decision to end the period of American hegemony and empire.
vanlose, you give various examples of planned disasters that leave the rich richer each time. None of these were hyperinflations, however. The neoliberal strategists never worry much about unemployment, but they hate inflation. It's not a surprise to you, is it? I think it's clear by what mechanism deflation makes the rich richer, and why they like that. It's also clear why they love asset inflation, a.k.a. bubbles (you can make money on the pump and on the pop!), and why they also like commodity inflation, a.k.a. bubbles in derivatives. By what mechanism would currency hyperinflation make them richer? The most you've been able to offer is that they can use the threat of it to induce terror so that they can cut spending and commandeer more pools of collective capital (like Social Security or public pension funds). But how would the actual hyperinflation do that? The only claims I've seen have been from libertarians saying "the government" wants it to reduce its debt. But "the government" is in the hands of those who don't really care about its debt. They are happy to bankrupt it one day, long as they make out like bandits today.
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i was going to say something and then realized that you'd said it. re Ellen Brown saying what you're saying. it's true. but then again she's dealing with a situation where one can make the distinction between the bank and the government.
the situation we're looking at now is one in which it's fairly diffficult to make that distinction, again cf., Inside Job. what "libertarians" say pretty much follows the "common" economic playbook.
if the people who brought about the 2008 "crisis" happily looted the companies they worked for, i don't see what could stop them for doing much else. and so far nothing has stopped them.
re gold as a fallback in a post-dollar collapse. it's a stupid notion. gold has the price it has and functions as an investment in this "economy". if you bought it at 300 sometime in the eighties and sell it now or when it tops and the "economy" is still in place then good on you. but if you think that it'll be worth 1400 or whatever price it hits when it tops and will hold that value post-collapse you're in for a surprise.
the value of "gold" on this market has no influence at all on its value in a post market scenario. an ounce of gold now will get you 1400. in a post market scenario and ounce of gold will be an ounce of gold. what it gets you will be determined by what the seller is willing to give you in exchange. it might get you a house. it might get you a gallon of gas. what it's value will be then no one knows, least of all Glenn Beck.
if you have gold in the post market it's likely that you may have the then medium of exchange in hand, meaning you're ahead of the curve. but if people/your community opt for something like the calgary dollar, all you have is some PM that someone might be interested in. then again they might not. this though is contingent upon a global collapse and post market scenario. (meaning all the people who are now managing the market disappear basically, and i have a hard time seeing that happen. that doesn't mean they couldn't subject the us to hyperinflation or any other form of manipulation exclusively if they smell profit. again, the FED forcing usgov into default scenario upthread is one of the things they could do. it's not the only thing.)
by the way, i don't think the collapse will happen. i do think it will be reset. those are entirely different things. re hyperinflation: if the "market" as is begin betting against the dollar you might get a hyperinflation scenario plus a default of the us gov as dreamed up by the independent FED. then intro the bancor or SEC or whatever, a global currency. or the amero? or maybe just a new dollar.
a recent example of the type of hyperinflation Ellen Brown talks about (call it Schactian) is Zimbabwe. she wrote an article on it google her name, hyperinflation and Zimbabwe. think it was on huffpo or some such place. it's out there anyway.
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