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Like the U.S. Federal Reserve, the Reichsbank was overseen by appointed government officials, but was operated for private gain. What drove the wartime inflation into hyperinflation was speculation by foreign investors, who sold the mark short, betting on its decreasing value. In the manipulative device known as the short sale, speculators borrow something they don't own, sell it, and then "cover" by buying it back at the lower price. Speculation in the German mark was made possible because the PRIVATELY OWNED Reichsbank (not yet under Nazi control) made massive amounts of currency available for borrowing. This currency, like U.S. currency today, was created with accounting entries on the bank's books. Then the funny-money was lent at compound interest. When the Reichsbank could not keep up with the voracious demand for marks, other private banks were allowed to create marks out of nothing, and to lend them at interest. The result was runaway debt and inflation. Thus, according to Schacht himself, the German government did not cause the Weimar hyperinflation. On the contrary, the government (under the National Socialists) got hyperinflation under control. The National Socialists put the Reichsbank under strict government regulation, and took prompt corrective measures to eliminate foreign speculation. One of those measures was to eliminate easy access to funny-money loans from private banks. Then Hitler got Germany back on its feet by having the public government issue Treasury Certificates. Schacht , the Rotchschild agent, disapproved of this government fiat money, and wound up getting fired as head of the Reichsbank when he refused to issue it. Nonetheless, he acknowledged in his later memoirs that allowing the government to issue the money it needed did not produce the price inflation predicted by classical economic theory, which says that currency must be borrowed from private cartels. What causes hyper-inflation is uncontrolled speculation. When speculation is coupled with debt (owed to private banking cartels) the result is disaster. On the other hand, when a government issues currency in carefully measured ways, it causes supply and demand to increase together, leaving prices unaffected. Hence there is no inflation, no debt, no unemployment, and no need for income taxes. Naturally this terrifies the bankers, since it eliminates their powers.
there is some ugly stuff i omitted for the sake of good taste, that's tangential. what interests me is the economic, financial and monetary aspects of the story, and most of all, if there's any truth in, or is it debunkable, or just debancable? 'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
Just to pick the worst:
On the contrary, the government (under the National Socialists) got hyperinflation under control.
Hyperinflation happened in 1921-3. The nazis came to power in 1933.
Schacht , the Rotchschild agent, disapproved of this government fiat money, and wound up getting fired as head of the Reichsbank when he refused to issue it.
In reality:
Hjalmar Schacht - Wikipedia, the free encyclopedia
After Hitler took power in January 1933, Schacht won re-appointment as Reichsbank President on 17 March. In August 1934 Hitler appointed Schacht as Germany's Minister of Economics.
After Hitler took power in January 1933, Schacht won re-appointment as Reichsbank President on 17 March.
In August 1934 Hitler appointed Schacht as Germany's Minister of Economics.
He was a minister until 1943, though in practise fell from power in 1936-7, after which he was involved in coup plans against Hitler.
Oh, and what set off the German hyperinflation was trying to pay the reparations.
So, whatever they are trying to say, it has nothing to do with what happened in Germany in the 1920ies and 1930ies. Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
Weimar hyperinflation reached its peak in 1923. Hitler came to power ten years later, in a deflationary environment.
The entire Wikipedia article on Hyperinflation in the Weimar Republic is worth reading to get the history clearer.
The Reichsbank was privately owned but government-controlled. Prior to 1922 directly, then it was independent. Following the Dawes-plan, the Reichsbank was independent but half or its board appointed by foreign powers. Following the Young-Plan, the board was since 1930 appointed by the german government again.
Schacht did co-create the Rentenmark and thenwas appointed president of the Reichsbank. He did resign in 929 to protest against the Young-Plan. In 1933 Hitler demanded money creation and or credit from the Reichsbank but the president Hans Luther was reluctant. Lurther was then sent as ambassador tot he US and Schacht returned.
Now it gets interesting:
"Then Hitler got Germany back on its feet by having the public government issue Treasury Certificates."
As long as they talk about Mefo-Bills, that is broadly true. Mefo-Bills were issued from a state owned private company but discounted by the Reichsbank. Additionally to that were also considerable budget deficits financed in traditional ways. So the Mefo-Bills were a form of unconventional monetary polica flanked by classic fiscal stimulus.
"Schacht , the Rotchschild agent, disapproved of this government fiat money, and wound up getting fired as head of the Reichsbank when he refused to issue it."
No, he invented this fiat money. It is true that he wanted to recall the Mefo-Bills in the late thirties and also wanted to reduce the budget deficits. Because this clashed with rearmament, he was fired.
"Nonetheless, he acknowledged in his later memoirs that allowing the government to issue the money it needed did not produce the price inflation predicted by classical economic theory, which says that currency must be borrowed from private cartels."
Who knows what Schacht did write. Schacht is a very unreliable Narrator, reducing everything to greater glory of Schacht. If Schacht just claimed that Mefo-Bills did not cause inflation in he thirties that much seems to be true.
This happened as follows: Germany didn't have the real resources to to pay. They were supposed to pay in either gold or foreign currency (can't remember which). So, Weimar says, no problem, I'll print some reichsmarks, go over to the exchange counter and get the gold or foreign currency I need and pay it to France. This worked once (sort of) but you know, fool me once shame on you, and France (and the markets) weren't stupid; next time Weimar tried this, everyone was on to this and no amount of reichmarks were enough to pay on exchange markets to pay the reparations, and hyperinflation was born while France occupied Germany to get its reparations in-kind.
All of this in the early 1920's, way before the Nazis.
The solution to the hyperinflation crisis also had nothing to do with the Nazis, though I think Schachtcwas involved. A new mark was introduced. This one pegged more or less to gold (reichmark wasn't ever since WW1) and circulation limited, so for awhile Germany had two currencies with a fluctuating exchange between the two.
No doubt savvy currency speculators made money during this time but saying they caused the inflation is like saying mice caused the crumbs on the floor. And no doubt it was harder to short sell the new marks, but only because there were less of them...you don't need to borrow from the central bank to short a currency... You just need to borrow it from someone, anyone.
This stuff you got here sounds like goldbuggism and pro-nazi propaganda...where did you get it? The Hun is always either at your throat or at your feet. Winston Churchill
Financial crises always spark interest in marginal critics of the system. One that's attracted interest on the left is Ellen Brown, who's got a book and a website called Web of Debt. She and her kind should be given wide berth.
This
the government (under the National Socialists) got hyperinflation under control.
The mention of Schacht as a "Rotchschild agent" (note the typo) is a dead giveaway too: "the Jewish bankers caused hyperinflation and Hitler fixed it!" is. guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
If you look at me, you will think Nordic - tall, blonde, etc
But my blood type is B -ve which is rather rare in Europe, and probably came from some Mongol ancestor who had raped one of my foremothers.
I wonder why people are still so surprised with this mingling of genetic material.
http://www.eurotrib.com/comments/2009/9/1/55028/62542/23#23
Also, do you see any reference to Rot[c]hschild causing hyperinflation in that old thread? guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
"Schacht revealed that it was the privately-owned Reichsbank, not the German government, that was pumping new currency into the economy. Like the U.S. Federal Reserve, the Reichsbank was overseen by appointed government officials but was operated for private gain. What drove the wartime inflation into hyperinflation was speculation by foreign investors, who would sell the mark short, betting on its decreasing value. In the manipulative device known as the short sale, speculators borrow something they don't own, sell it, then "cover" by buying it back at the lower price. Speculation in the German mark was made possible because the Reichsbank made massive amounts of currency available for borrowing, marks that were created with accounting entries on the bank's books and lent at a profitable interest. When the Reichsbank could not keep up with the voracious demand for marks, other private banks were allowed to create them out of nothing and lend them at interest as well.7"
No doubt, that is how I learned about that. The brown theory seems to be a zombie, resurfacing again and again.
That is another quality.
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