Wednesday, December 10, 2008This is a quote from Weimar Germany: Promise and Tragedy, a new book about the Republic. I highly recommend it.
The below passage is about the dawn of hyperinflation. At its zenith, one dollar was worth 4.2 trillion marks.
From page 135:
The government made available to business in the Ruhr a huge range of credit instruments, while various ministries and agencies paid out wages for unproductive work, unemployment benefits, and welfare support. By the end of June, the government had guaranteed 2.5 trillion paper marks' worth of credits to business, and had provided another 5.2 trillion marks in the form of subventions to the railroad and postal service and social supports. The government had neither the gold reserves, the moral legitimacy, nor the real economic production required to meet its obligations. But it had printing presses, and these it used with abandon.
Note how Weimar Germany extended 7.7 trillion dollars in credit instruments to businesses.
Now note how America has extended 7.4 trillion dollars in credit instruments to businesses.
Posted by Penn @ 6:53 PM | |