Jump to content
drbubb

Weimar 1920-21 : "It felt like deflation was underway"

Recommended Posts

NOTES: Lessons of Weimar

======================

What we can learn from 20's Madness

 

Wholesale Price Index : US$1.00 equals

July 1914 :...... 1.0 : ..... 4.2 Mark

Jan. 1919 :...... 2.6 : ..... 8.9 Mark

July 1919 :...... 3.4 : .... 14.0 Mark

Jan. 1920 :..... 12.6 : .... 64.8 Mark

July 1920 :..... .... : .... 39.5 Mark

Jan. 1921 :..... 14.4 : .... 64.9 Mark

July 1921 :..... 14.3 : .... 76.7 Mark

Jan. 1922 :..... 36.7 : ... 191.8 Mark

July 1922 :.... 100.6 : ... 493.2 Mark

Jan. 1923 :.. 2,785.0 : .. 17,972 Mark

July 1923 : 194,000.0 : . 353,412 Mark

Aug. 1923 :.......... : 4.6millionMark

Sep. 1923 :.......... : 98.millionMark

Oct. 1923 :.......... : 25.billionMark

Nov. 1923 726 Billion. 4.2trillionMark ... Hyperinflation chart

 

Source/ Right hand column figures:

http://www.nrw2000.de/weimar/rentenmark.htm (in German)

 

Impact of Hyper-Inflation :

 

+ People were paid by the hour and rushed to pass money to loved ones so that it could be spent before its value meant it was worthless. People had to shop with wheel barrows full of money. Restaurants did not print menus as by the time food arrive…the price had gone up !!

 

+ Bartering became common - exchanging something for something but not accepting money for it.

Bartering had been common in Medieval times !

 

+ Pensioners on fixed incomes suffered as pensions became worthless.

 

+ The poor became even poorer and the winter of 1923 meant that many lived in freezing conditions burning furniture to get some heat.

 

+ The very rich suffered least because they had sufficient contacts to get food etc. Most of the very rich were land owners and could produce food on their own estates.

 

+ The group that suffered a great deal - proportional to their income - was the middle class. Their hard earned savings disappeared overnight. They did not have the wealth or land to fall back on as the rich had. Many middle class families had to sell family heirlooms to survive. It is not surprising that many of those middle class who suffered in 1923, were to turn to Hitler and the Nazi Party.

Share this post


Link to post
Share on other sites

STRATEGIES - What I wrote back in 2004 (with some deletions):

 

Here's my "expected" Hyperinflation Scenario :

 

The US tries to reign-in inflation thru higher rates, its economy slows, and it finds it too painful. So the printing presses come on, and the US gets hyperinflation for 1-3 years. Followed by the inevitable severe recession.

 

OR: ...goes its own path, neither high rates, nor printing too much money and winds up with stagflation.

 

If we get these scenarios, then:

 

Wise Americans would try to get their money offshore into more stable currencies. Those that cannot would do better to invest in gold shares, since gold prices would shoot up. I doubt that gold would be confiscated this time (Americans would put up too much fuss), but if it happened then physical silver (not confiscated before) might be a good thing to hold, and gold shares, of course.

 

OR: If we get stagflation, stocks would do better than bonds, but both would fall. Property would be hit badly by high interest rates. Rising taxes (arent we seeing that?) would keep after tax incomes from rising much. The economy would look weak relative to the Far east, which might do well. Smart place to invest? Ah... Gold shares might do well ...too. Maybe Japanese equities, if demand begins to bounce back there (since Japan started its depression "early")

====

 

UPDATE in 2012:

 

We certainly got much of this:

 

+ Gold and Gold shares have shot up (but gold outperfomed more than expected)

 

+ Shares prices crashed when the economy ran out of steam in 2008

 

+ US property prices slid, as they did also in the UK outside of London

 

No signs yet of Hyperinflation, will we experience another bout of deflation before that.

Share this post


Link to post
Share on other sites

I combined a second thread into the Old one

 

This one was Merged in...

20 May 2012 - 09:34 PM

The Weimar Pattern - Is it repeating ?

Share this post


Link to post
Share on other sites

QUOTE (DrBubb @ Jul 14 2010, 09:32 AM)

Strengthening currency in the first half of 1920

xxxwk.jpg

"Gold marks" fell into mid-year, before the hyperinflation took off

 

Might we get a Stock crash ? .. update

001zu.gif

... and a Gold-price drop .. update

xxxr.gif

 

... Before a panic, and a reckless reaction leads to money printing

 

Germany had its Deflationary scare, before the leap into Hyperinflation

Share this post


Link to post
Share on other sites

Some FACTS here about the Weimar Republic, and its aftermath

 

Share this post


Link to post
Share on other sites

Looking at the CRB - A long term chart

 

oz6.gif

 

It looks as if the CRB index is resting right on the mid-point of the up-channel

 

In mid-1920, in Weimar Germany: "It felt like deflation was underway"

 

27tx.jpg

 

With Gold so weak over the past 1-2 years, it feels like deflation all over again.

 

Here's the CRB Index for the past Three Years / update : xx

 

iskz.png

Share this post


Link to post
Share on other sites

digc.jpg

 

Check out the other "Weimar Rooms":

=================================

 

Charts / Links : http://tinyurl.com/WeimarRm

 

Thread - GLP : http://www.godlikeproductions.com/forum1/message2357885/pg1#40293767

. . . . . - Advfn : http://uk.advfn.com/cmn/fbb/thread.php3?id=6965263

 

And Watch THIS ONE too !

Share this post


Link to post
Share on other sites
(As was posted elsewhere):


P., your:

"History does not repeat although it sometimes ryhmes. Today may ryhme with Weimar or the seventies, but they are not the same"


I agree - the rhyme is much more likely than the repeat.


I suppose the main point of this is to see that a Deflationary scare, may be needed to push the world towards higher inflation.


In our time, it may take a stock market crash, which has been predicted by various Hindenburg Omens, to push the world towards a stronger QE response. Let's see if we get the stock crash, and the stronger QE response in the months to come.

Share this post


Link to post
Share on other sites

New Long Term Chart, using updated data : source

 

cve0.png

 

Ladies and gents,

 

The UP-Cycle is not done yet !

(If you expect it to be as long as the Average prior Upcycle):

 

To 1999: 187.16
Ave : Upmove : H : 322% : 21.7+ yrs : 6 Times
Therefore, history Predicts:
2021 : 789.8 : H +322% : 22+ : :
And after that, will the US Dollar still exist ??

Share this post


Link to post
Share on other sites

(Article thanks to L. on another thread):

 

EXCERPT:
Bonds and gold also rallied big on the news with the yield on the benchmark 10-year US Treasury dipping sharply to 2.69 percent (from 2.85 percent the day before) while gold rose more than 4.1 percent to $1,364. The US dollar was hammered savagely on the news, dropping to a seven-month low against a basket of major currencies. According to Reuters, the buck “saw its biggest one-day slide in more than two months” and “has fallen to levels not seen since well before Fed Chief Ben Bernanke first floated the idea of reducing the stimulus in May.”
Bernanke attempted to justify his reversal (some are calling it a “head fake”) on continuing weakness in the economy, particularly high unemployment and tightening in the financial markets. He also implied he was worried about the possibility of a government shutdown and the impact that would have on the anemic recovery.
While Bernanke presented a rational defense for his pet program, he was not convincing. The truth is, the Princeton professor is out on a limb and doesn’t know how to get down. That’s why he didn’t trim his bond buying by even a measly $5 billion per month, because he’s afraid the announcement would trigger a selloff that would unravel his $2.8 trillion reflation effort. So he decided to stand pat and do nothing.
. . .
QE doesn’t even increase inflation which is why the Fed is still unable to hit its target rate of 2 percent. The fact that inflation has stayed so low (The Consumer Price Index was up just 0.1% in August) while stock prices have more than doubled at the same time, proves that Bernanke’s nearly $3 trillion in liquidity has not “trickled down” to the real economy at all. The injections have merely boosted profits on inflated asset prices for financial parasites and speculators.
Even hedge fund managers like Duquesne Capital’s Stanley Druckenmiller are now willing to admit that QE is a farce. Here’s what Druckenmiller said in an interview with CNBC following Bernanke’s announcement on Wednesday:
“This is fantastic for every rich person. This is the biggest redistribution of wealth from the middle class and the poor to the rich ever.”
Indeed, while the dwindling middle class faces deeper budget cuts and tattered safety net programs, the rich have never had it so good.
HOL: (Yep. Got money? The Fed has trotted out to yer rescue.)
L. : (rofl) I particularly like what it is being called...a 'head fake"!!
HOL:
If we get a stock crash, which seems likely at some point -
The Fed may apply the "medicine" even more liberally.
Those who are not able to protect themselves, are the ones who will wind up suffering - and that is many ordinary people.
L.: yes it is of course...I guess they have got what they wanted and that is more of the world's wealth!!
HOL: It may be a plan, or they just lack the courage to try the things that could help ordinary people to get jobs, and get ahead, since that may endanger their (tightening) power structure

Share this post


Link to post
Share on other sites

IS a PERFECT STORM for Gold Brewing?

 

Here's one who thinks so:

 

As of early afternoon in New York, Comex August gold was down $36.10, or $2.6%, to $1,333.20 an ounce. Volume has been high for a Friday,

 

Triland Metals says. “It is important to step back from these short term knee-jerk reactions to the bigger picture,” Triland says. “The inflexion point of QE (quantitative-easing) program activity was in late 2012 and the gold market reacted accordingly; ultimately following April's large flush-out, gold has priced in a reduction in the pace of the program already. Whilst the tapering of stimulus is highly likely at some point in the next few Fed meetings, it is the sensitivity of the wider markets to these announcements that is the most alarming. The wider press is also now realizing the house-of-cards scenario that QE has created -- inflating the assets of the very rich to artificially high levels and keeping borrowing costs un-naturally low for prolonged periods of time. It seems that the Fed will have a tough time reducing these purchases, let alone reducing the monetary base; something that they need to do if they want to control inflation that is round the corner. The perfect storm for the next leg up in gold's secular bull run (see back to 1971 Nixon shock) is brewing.”

 

===

/more: http://www.kitco.com/news/2013-09-20/KitcoNewsMarketNuggets20130920-kitco-market-nuggets.html

 

The Fed's "natural constituency" can no longer tolerate "market" interest rates.

Share this post


Link to post
Share on other sites

PROBLEMS WITH OUR PRESENT MONEY SYSTEM : Damage being done, Current Risks


lzed.jpg

Responding to comments by Peter Barnes, on Advfn's Gold thread


/ this is of some relevance here too /


PB:

"PS: Frizzer's book ,"Life AFTER the State", is due soon.

It's surprising how many who posted on this thread gravitated towards Austrian economics."


EI:

I have ordered a copy too.


Here's a little interview about it - Now a bit dated perhaps




Dominic Frisby states that the extraordinarily uneven distribution of wealth in country's like Britain and America is a consequence of our system of money. Those who receive the newly created money first benefit over those who don't -- a process which compounds over time and leads to an ever greater concentration of wealth among the top 1%. They also point out that government redistribution of wealth -- whether via inflation or through welfare payments -- is placing incredible pressure on the middle classes, who are finding themselves squeezed like never before.


Currency competition would take away the state monopoly on money and thus its ability to redistribute wealth via inflation. Dominic's favoured model is to go back to metal money that is stored in vaults, and where ownership can be transferred without much effort. Bitcoin is another example of an independent currency. They also talk about the idea of a currency that is backed by equities. The free market is best at creating the most efficient solution to a problem -- which in this case is the need for a reliable international currency.


/Part-2/


PB:

"One of the biggest flaws being, that if there were a recovery, and banks started to loan the mass of money.Then fractional reserve would multiply this by 10."


Yeah - A jump in the velocity of money would surely trigger inflation.


However, they will not be not be so eager to lend it, because of the Shortage of acceptable collateral. The big US property price crash, has undermined their willingness to use property so aggressively. From many years to come, LTV / Loan-To-Value on property are likely to be kept at more prudent levels.


And the drop in incomes, and the smaller number working, means that unsecured loans to individuals are likely to be less aggressively lent.


So how will the banks get the money out, and into people's hands - if they cannot find acceptable collateral? One way, has been to lend money against stocks - and Margin Loans on stocks are now at a record level. THAT in itself is a danger sign, and that sort of lending could be approaching a climax and reversal. If stock prices drop, margin calls by banks could trigger a more rapid fall in prices somewhere along the way.

Share this post


Link to post
Share on other sites
*QUESTIONS which arose Later (after the interview)

====

Would a redesigned currency stop the rot, where our political process cannot ?

Or do we simply need to hit the wall in a gigantic crisis, before voters re-learn the virtues of spending discipline?


Can you be on the right wing, and believe in Sound Money, - and still be socially conscious?

I would say that those things now come together, because the current system of piling up more and more debt, is bound to lead to a crisis, which may cause an abrupt and sudden end to the nice benefits that some are enjoying.


But this reality (dangers of debt) is very hard to discuss in the present political environment (where so many people are feeling impoverished.)


As DF said: Wealth concentrates around those who have best access to the Money.

Share this post


Link to post
Share on other sites
How can the US cope with this WITHOUT Hyperinflation?


$17 Trillion U.S. National Debt? Try $211 Trillion


September 23, 2013 by Mark O’Byrne


“If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That’s the fiscal gap,” he says. “That’s our true indebtedness.”



Share this post


Link to post
Share on other sites

BOTTOMED AND BASING ? - for the next move higher

 

That's what I see in this chart:

 

DBA / Agricultural Fund ... update : 5 years

 

8n.gif

 

Others, with similar charts : CRB, CU, ... ? : Gold , JJG

 

And here are the FIVE YEAR CHARTS

 

+ for DBA ... update : all-Data

763p.png

 

+ for CRB ... update : all-Data

of13.png

 

+ for JJG ... update : all-Data

98f0.png

 

Here's the All-Data chart for DBA

amq4.png

Share this post


Link to post
Share on other sites

The Commodity Rally may be short-lived

 

 

The Commodity rally since JULY is running out of gas . . . Update

 

qu8.gif

Share this post


Link to post
Share on other sites

The Sexual Decadence of Weimar Germany

. . .

Wiehe provides the following useful facts and statistics:

 

In 1931, over 60 percent of German films were produced by Jews and 82 percent of the film scripts were written by Jewish writers, though Jews made up less than 1 percent of the German population (0.90%). A quick look at the names of directors, producers, stage managers, actors, script writers and critics, “revealed everywhere an overwhelming preponderance of Jews.”

 

12-320x259.jpg

 

Alexander Szekely, German brothel in Ghent

 

A cursory survey of the film titles, Wiehe tells us, shows us that the Jews had only one thing on the brain: sex. Here are some typical titles: “Moral und Sinnlichkeit” (Morals and Sensuality); “Was kostet Liebe?” (What is the Price of Love); “Wenn ein Weib den Weg verliert” (When a Woman loses her Way); “Prostitution” (Prostitution); “Sündige Mutter” (Sinful Mama); “Das Buch des Lasters” (The Book of Vices).

 

“The sensational titles correspond to the sleazy contents,” Wiehe complains. “All wallow in filth and display with cynical frankness the vilest scenes of sexual perversion.” [3]

 

Light entertainment (revue/burlesque) was a Jewish innovation. The revue theaters, all concentrated within great cities such as Berlin, were owned and run almost exclusively by Jews.

. . .

Finally, there was the rich field of sexology: a new science consisting largely of dubious “case histories” purporting to reveal the depraved sexual habits of various anonymous patients. In order to give an air of academic respectability and erudition to these masturbatory fantasies—thrilling adventure stories involving necrophilia, bestiality and handkerchief fetishism—the more exciting details were often given in vulgar Latin “in order to exclude the lay reader.” [6]

21-320x227.jpg&

Otto Dix, The Salon, 1921
Berlin prostitutes awaiting the pleasures of the evening

 

However, it was not long before the Latin was diligently translated into the vernacular for the benefit of the unlatined lay reader, thus defeating the purpose of the prim “schoolmaster’s Latin”.

. . .

CONCLUSION: WEIMAR GERMANY AS A DRESS REHEARSAL FOR THE SUBSEQUENT SEXUAL REVOLUTION OF THE 1960s

My own impression, though I could well be mistaken here, is that Weimar Germany can be seen as a trial run or dress rehearsal for the Sexual Revolution of the 1960s, a revolution in attitudes and behavior that was to convulse America and then spread like a moral virus to Europe and the rest of the world.

Recollect that it was in Germany during the Weimar period—in 1923 to be exact—that the Institut für Sozialforschung was set up at the University of Frankfurt. Financed by the Argentian Jew Felix Weil, this was later to become the infamous Frankfurt School. [23]

 

It is my own hypothesis that the Germans were to be the initial guinea pigs of these Cultural Marxists [24], all of them initially Jewish apart from Habermas. These were revolutionaries intent on complete social control by the imposition of their Marxist worldview on the rest of society. It is self-evident that there is no other way to get control of a society with strong moral values than to weaken those values.

 

The formula is simple: destroy the belief system on which that society is founded, especially its religion and its traditional codes of honor and decency. Promote godlessness and a philosophy of despair. To put it in even plainer language: reduce men to beasts if you wish to control them.

 

It was George Lukács [25], one of the founding fathers of the Frankfurt School, who had called for “a culture of pessimism and a world abandoned by God.” [26] And it was one of their most fanatical ideologues, Willi Munzenberg [27], who had said he wanted to turn the world upside down and make life a hell on earth. His exact words:

 

 

We must organize the intellectuals and use them TO MAKE WESTERN CIVILIZATION STINK! Only then, after they have CORRUPTED ALL ITS VALUES AND MADE LIFE IMPOSSIBLE, can we impose the dictatorship of the proletariat.

 

===

/more: http://www.veteranstoday.com/2013/09/24/sexual-decadence-weimar-germany/

Share this post


Link to post
Share on other sites

Is a Cabal manipulation through Sexual Deviance being exposed?

 

Preston James thinks so:

 

"

Bit by bit normal sex roles in America have been destroyed, also taking the normal family system with it, and all due to the quiet systematic and successive implementation of neo-Bolshevism globalist values designed to destroy America the Republic forever.

The results of the implementation of this systemic neo-Bolshevik social and economic engineering have become noticeable to astute researchers, but the actual “behind the scenes” root cause has not. In this article it will be exposed as the Third Force, some believe is lucifer a fallen angel, others believe is an long living alien ET entity which has gained great power over the earth.

The last presidents “elected” have been a CIA drug trafficker and murderer of JFK, another who ran cover for the Iran Contra Arms out- drugs in at Mena Arkansas and was rewarded with the presidency, and a sheep dipped CIA man, a complete fraud with no past and alleged to have used various fake names and over 40 different social security numbers used to obtain college aid while not having the required registration card. All of these men have been used to very craftily manipulate the public sentiment by dividing major elements to battle psychologically against each other."

 

===

/more: http://www.veteranstoday.com/2013/09/30/inside-the-beltway-iii-creating-cover-for-the-big-shift/

Share this post


Link to post
Share on other sites

The OTHER SIDE of the story

 

A Once–in-a-Century Deflationary Setup?

October 01, 2013 11:33 - Jay Taylor

 

Prechter’s view (is) that we are poised for the next major leg down in the equity, bond and commodity markets.

Following is a chart he displayed in the September issue of “The Elliott Wave Theorist.”

20131001jt_image008.jpg

f2yq.jpg

Regarding the charts above, here is what Robert Prechter said in his latest monthly issue: “Here late in the summer of 2013, stocks, bonds and commodities are poised in the same manner they were late in the summer of 1929. At that time, stocks were rising to a new all-time high, bonds had peaked a year earlier, and commodities were trading at lower prices after having topped out several years before. The aftermath was a crash in all three markets: stocks, bonds and commodities. In 1929, the DJIA topped on September 3, and the Dow Utilities peaked on September 20. This year, the DJIA has topped so far on August 5, while the NASDAQ just made a new high on September 10. It’s a similar development the same time of year.”

Copper Says It’s Over

With reference to the chart on your right, another interesting comment from the September 12, 2013 issue of The Elliott Wave Theorist talked about how copper is pronouncing the end of this asset inflation cycle: “There is an old saying, ‘Every bull market has a copper top.’ Over the past decade, no fewer than three giant investment manias peaked with a copper top: housing in 2006, commodities in 2008 and precious metals in 2011. We think copper is now in a major bear market. Thus, housing, commodities and metals remain in bear markets, too. And the economy on a long term basis is about to accelerate downhill along with them.”

I have no problem believing Prechter may be right on all fronts because the underlying market dynamic is deflationary. The powers that be are having a very difficult time in inflating the debt away. Failing to understand that the reason the depression lasted through the whole 1930s decade was because fiscal and monetary policy could not work.

===

/More-JayTaylor : http://www.kitco.com/ind/Taylor/2013-10-01-A-Once-in-a-Century-Deflationary-Setup.html

Share this post


Link to post
Share on other sites

Classic Book on Weimar Germany / Audio interview with Eric Weitz, the author

 

j9993.gif

 

MP3 : http://press.princeton.edu/podcasts/weitz.mp3

 

Weimar Germany: Promise and Tragedy (New and expanded edition)
Eric D. Weitz

A New York Times Book Review Editor's Choice
One of Financial Times's Best Books for 2007 - A History Book Club Selection

 

Thoroughly up-to-date, skillfully written, and strikingly illustrated, Weimar Germany brings to life as never before an era of creativity unmatched in the twentieth century-one whose influence and inspiration we still feel today. In a new chapter, Weitz depicts Weimar's global impact in the decades after the destruction of the republic, when so many of its key cultural and political figures fled Nazi Germany. The Weimar style they carried with them has powerfully influenced art, urban design, and intellectual life from Tokyo to Ankara, Brasilia to New York. They made Weimar an example of all that is liberating, and all that can go wrong, in a democracy.

Eric D. Weitz is Dean of Humanities and Arts and Professor of History at City College, City University of New York. He is the author of A Century of Genocide and Creating German Communism, 1890-1990 (both Princeton).

Review:

"In his engaging readings of these works, Weitz forgoes abstruse analysis. Instead, he presents them as fresh attempts to make sense of a world in which reliable beliefs about authority and order, class and gender, wealth and poverty, no longer held. His most innovative chapter is an imaginary walk through Berlin, observing the daily lives of the city's different classes. . . . Better than most histories, the book connects culture, politics and city life."--Brian Ladd, New York Times Book Review

=

> http://press.princeton.edu/titles/9993.html

Share this post


Link to post
Share on other sites

A Trader looks at Hyper-inflation

 

Victor Sperandeo: The Coming Hyperinflation

=

=

 

Aug 24, 2013

Legendary Wall Street trader Victor Sperandeo presents a compelling, data-driven case that the current US and international monetary policies are creating the conditions for a hyperinflation on a scale never seen in the United States. The talk discusses what hyperinflation is, how it occurs, where it took place in the past within other nations, and why it has to occur ( a "statistical inevitability") in the US unless the government changes its ideology drastically. Accompanied by data slides.

Share this post


Link to post
Share on other sites

BUMP - US Inflation won't be like Weimar

REPARATIONS PAID IN GOLD, was the Big Blow for Weimar Germany.   Most US debt is in USD, and that makes a huge difference

(from above):

"It is sometimes argued that Germany had to inflate its currency to pay the war reparations required under the Treaty of Versailles, but this is misleading. The German currency was relatively stable at about 60 Marks per US Dollar during the first half of 1921. But the "London Ultimatum" in May 1921 demanded reparations in gold to be paid in annual installments of 2,000,000,000 gold marks plus 26 percent of the value of Germany's exports. The first payment was paid when due in August 1921.[3] That was the beginning of an increasingly rapid devaluation of the Mark..."

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×