By Charles Stampul
We are in the early stages of a one hundred year inflation and what happened this week makes hyperinflation a fait accompli. The parallels between the US today and Germany 100 years ago are eerie. They include a global pandemic, an insane woke ideology, early stages of world war, and a cut-and-paste gold chart.
June 1919
The Treaty of Versailles forced Germany to pay the costs for World War I in gold over a 42 year period. German debt rose from 38.6 billion in January, 1919, to 176.6 billion in May, 1921. As the government borrowed to make reparations, the value of the Mark eroded. By 1922 Germany could no longer make any payments. Their debt grew from 52 billion in January 1922 to 150 billion just three months later, and 1000 billion by the end of the year.
March 2020
The Coronavirus Aid, Relief, and Economic Security Act (aka nobody CARES what this does to prices) created $2.2 of debt which was monetized by the Fed. When the Fed could no longer convince people that rising prices were “transitory” they began raising the federal funds rate. But the economy was too accustomed to low interest rates to accommodate a higher cost of borrowing. This week, after the collapse of ultra woke Silicon Valley Bank, President Joe Biden and Treasury Secretary Janet Yellen sat together in the Oval Office wearing surgical masks and then announced that they going beyond FDIC’s limit of $250,000 limit and make every single depositor whole. A new precedent was set. The Federal Government is now on the hook for all the debt of the fractional reserve banking system.
But there might be one difference between the inflation in Germany of 1923 and the US today. People back then were smart enough to get their money out of Marks and into gold. While chart of dollar/ gold from 2019 to 2021 matches the chart of marks/ gold from 1919 to 1921, the explosion higher is yet to happen. An epic cup and handle, however, seems to be holding form.
The blog that promotes recreational marijuana use is now warning of a Weimar Republic situation.
“The Ridgewood Blog Brings a Free Market Laissez-faire Point of View to Local, New Jersey State and National Issues.”
Promotion?
Or maybe a warning by letting folks know what’s out there………..
Of course, promoting anything that allows people to alter their consciousness and makes them more able to be manipulated…………
Now what party would that benefit?
China laughs at us.
We are approaching Glubb’s 250 in this country………………………………….
Very strange comments. Gold is up nearly $100 since this article was published. You could have traded on this and done very well. (check my track record) . There are 27 comments on a piece on property taxes increasing by 4% this article letting people know that value of their dollars is going to plummet gets no relevant response.