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