A Replay Of 1929? Don't Count On It
Today some have questioned whether we could have another 1929-style Depression. The answer is no — at least, it shouldn't happen.Then we had over 25% unemployment; now it's 6% and could move somewhat higher, which is typical for economic corrections (see chart above). Then, by 1934 about one-half of mortgages were in default, today it is only 6%. Nearly 94% of homeowners are still making their monthly payments.
So what's the big lesson to be learned here by the public? That this financial crisis was the result of yet another Big Government program that had great intentions but created devastating unintended consequences that hurt millions of people.
It was not the fault of African American groups, which naturally want to help their people. Nor was it the fault of America's free enterprise system, or a lack of enough regulation. No, it was Big Government once again trying to run a private industry.
28 Comments:
This argument isn't very convincing. 1934 is 5 years after 1929. How do you know things won't get that bad by 2013? It's pointless to compare the start of the current crisis to the worst part of the Depression.
I think back in 1929 most people wanted to work and were hard working. Today, in contrast, I think a whole lot of people are working hard to find ways not to work.
The financical crisis we are in is a great excuse to sit at that soon to be foreclosed on home and watch that new flat panel tv that financed.
Could we find ourselves in another 1929 type depression. You bet we can.
It is folly to think that we are not on a downward spiral.
No matter who gets elected president...the economic future of our country does not look good. It is going to take lots of work, patience, and luck for us to move beyond our current circumstances.
"Face it: you got this one wrong. Why should anyone think you're not getting it wrong again?"...
Face it anon the only reason the economy is in the condition it is in now is due to people like your fellow travelers inserting themselves into the market, something that like you they know nothing about...
Here's one of your fellow travelers still sticking his foot in his mouth last year...
Let's not forget where this all started: It was then, for the best and purest of reasons, that well-meaning Democratic members of Congress brought the Community Reinvestment Act into being.
The main idea, as the late Democratic Sen. William Proxmire said on the Senate floor in 1977, was "to eliminate the practice of redlining by lending institutions."
Why do people always screw up the definition of censorship and point to the 1st Amendment?
"at least, it shouldn't happen."
Yeah, typical economist assurance. Don't know at all but hope the heck!
NO! IT WILL NOT HAPPEN HERE!
It might well happen in Germany. The 30s depression started in 1924 when they outlawed minimum wage. Over the next 5 years consumer spending dried up as their incomes dried up. What was left in 29 was a phantom of a growing economy lacking the base of consumer spending. The lack of consumer spending had unemployment skyrocketing before the Fed tried to fix things and messed up the money supply like they are doing today. The job market is not dependent on the stock market, but vice-versa.
In Germany, the minimum wage was rendered ineffective with the creation of the low wage unprotected sector. Since then, their wages have been plummeting and so they do lack the expected consumer support that every economy relies on, so as THEY try and fix the money supply, THEY will find no consumer base to support their business capacity.
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Back in the mid 1970's there was a commercial for Memorex recording tape starring Ella Fitzgerald. Ella belts out a song and at the end of the commercial she manages to shatter a glass with her voice and the announcer asks, "Is It Live Or Is It Memorex?"
Here we are in 2008 and we're asking the same question today. "Is it real or is it fake?"
What are you talking about, you ask? Paystubs......paystubs? Yes, paystubs.
I came across this website that sells a software program that allows you to create and print your own paystubs. "Create Paystubs Instantly" - They state that for $49.95 their software is a way to "Verify Income For Anyone Easily!" Check it out for yourself: http://www.fakepaycheckstubs.com
As though we haven't had enough problems in the mortgage industry, with stated incomes, falsified appraisals, straw buyers and fraudulent property flippers, now we have the problem of fake paystubs.
There is only one reason in this world for someone to purchase this software.....FRAUD! That's right.....FRAUD!
The website has a big disclaimer stating, "WWW.QUICKSTUBS.COM OR ANY OF ITS AFFILIATES ARE NOT RESPONSIBLE FOR ANY MISUSE ASSOCIATED WITH THIS PROGRAM ONCE THE BUYER HAS FILLED IT OUT WITH THE INFORMATION THEY CHOOSE TO USE."
What is really disturbing is that the website also says, "VERIFY INCOME FOR ANYONE, ANYTIME!" They further state that - "THIS COMPUTER PROGRAM IS INTENDED TO CREATE NOVELTY PAYCHECK STUBS FOR ENTERTAINMENT, AND AMUSEMENT PURPOSES ONLY!!"
You gotta ask yourself....when was the last time you sat around with your friends laughing and joking about your paystub? I don't think so! In our society, we don't usually discuss our pay, much less our paychecks. We might talk in generalities, however, we don't show others our paystubs.
I have to wonder how many software programs they've sold and how many of them will be used to defraud mortgage lenders into making a loan.
This type of software being sold calls for lenders to double check everything a person presents to them because you never know.........
"Is It Live Or Is It Memorex?"
"When someone like the well-respected Dennis Gartman starts today's letter noting that he is more frightened for world capital markets than ever in his 30+ years of trading, things are not good"...
Why? Is Gartman worried his public pronouncements regarding gold?
"So what's the big lesson to be learned here by the public? That this financial crisis was the result of yet another Big Government program that had great intentions but created devastating unintended consequences that hurt millions of people."
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Oh yes let's ignore the greed on Wall Street, greep of rating agencies, credit default swaps, derivates, 20 to 1 leveraging and etc.
Only a simple minded fool would lay blame on "goverment inserting themselves into the market"
http://www.cbsnews.com/stories/2008/10/05/60minutes/main4502454.shtml
What government agency forced Lehman Brothers to made bad business decisions snd go bankrupt?
> No matter who gets elected president...
One of them, however, is going to tell everyone it's not their fault, that it's all the fault of greedy rich bastards.
One of them is going to tell them that they need to take some responsibility and not demand that the government "fix" the problem via bread and circuses.
Who ya gonna want in office?
> in 1924 when they outlawed minimum wage.
Arman, we get it that your head is so far up your ass that it's sticking back out the top, but AT LEAST try and make your idiotic lies not be QUITE so easy to debunk.
ANYONE who has examined the collapse of the economy of the Weimar Republic knows that it was due to
a) The massive debt load created by the allies as a part of war reparations
b) The fact that Republic tried to print its way out of the situation, leading to the same sort of insane inflation levels seen today in Zimbabwe.
You know, you ought to have that condition looked at my mathematicians and physicists... since it seems to violate physics, I'd think they'd be intrigued by the possibilities it represents..
> Only a simple minded fool would lay blame on "goverment inserting themselves into the market"
Only a simple minded fool would imagine that they DON'T have a lot to do with it under current attitudes, like yours.
No one who has a clue is claiming that the greed of both a range of home buyers AND lenders is irrelevant.
Tthe fact is, the FMs are at the heart of it, and they led the way into these idiotic policies, and otherwise sensible lenders were pressured into them as well by people attempting to inflict race-preferential lending decisions on them.
One of Obama's earliest activities was extorting local banks to lend to loan candidates without adeqate histories to make them good lenders... racially based loans.
It was extortion based on the CRA, along with threats by the JD to expose such banks as "racists". Banks were threatened with protests and boycotts, with all the excessively bad publicity that entails.
Yes, once the ball was rolling, the poorly justified instruments got used in places where such pressures were not present -- and that DOES fall on the lenders, as well as the buyers
But even when there were people, Bush, McCain, and other members of the GOP, attempting to rein in the bad financial behavior -- not less than 14 separate times during the Bush admin -- the Dems were relentlessly obstructionist, first in committee, then, after 2006, wholesale.
(Yes, the GOP bears some responsibility, in the sense that, before 2006 they did not ram it down the Dem's throats with their override capability)
The government created the impetus, and when the snowball got rolling downhill, the Dems stopped everyone attempting to stop it from getting out of control.
In the end the responsibility breaks down about like this:
65% Dems.
20% GOP.
10% lenders.
5% buyers.
Notice who gets the lion's share of that -- The Government and The Dems.
It seems kind of simplistic to blame one group or another for this problem.
ANYONE who has examined the collapse of the economy of the Weimar Republic knows that it was due to "
Educated opinion mistaken for fact.
b) The fact that Republic tried to print its way out of the situation, leading to the same sort of insane inflation levels seen today in Zimbabwe.
Money is not made in printing. Money is created in lending. Money is not money until it is borrowed. Money is normally retained on the bank ledgers. Instruments like checks and printed bills are issued from money on the ledger. The printing of checks and bills have almost no effect on the real money supply. Bank income and willingness to lend on collateral is the source of all money.
Money is the backing and the credit of the local bank. It uses preprinted vouchers from the fed in some of its operations. These notes are useless to the economy until they are lent out, just as your checks have no meaning until you give them to someone.
Again, your condemnation of me reeks of narrow minded ignorance.
Is it rude to remind you of your post 12 Jan 2008?
Frankly I prefer honesty, and being clearly shown where I made a mistake I find a most valuable learning opportunity, but most people are more intent on feigning intelligence than attaining intelligence.
I think the truth shall set you free, and if you have a tool to set someone's mind free of untruth's bondage, then it behooves you to use it.
Arman,
I have read a lot of your posts and your responses are nearly always very well articulated, although I hardly ever agree with your conclusions. However, sometimes you just sound like an arrogant dick. I assume that there was a lot of lunch money taken from you by the bigger kids, and your intellect (or pseudo-intellect) has become your #1 defense. I would prefer it if you just stuck to the facts. You actually give your argument much more credibility that way. Just an observation.
>>> ANYONE who has examined the collapse of the economy of the Weimar Republic knows that it was due to "
> Educated opinion mistaken for fact.
Handwave passed off as argumentative proof...
"Put Up or Shut Up".
> Money is not made in printing. Money is created in lending. Money is not money until it is borrowed. Money is normally retained on the bank ledgers.
Irrelevant to your argument about the Weimar Republic's collapse. Often euphemistic, "Resorting to the printing press" is truthful when the Weimar Republic is concerned, when inflation was so bad that a 1923-issue 50-million mark note is worth US$1 at issuance, and worthless a few weeks later. The Weimar Republic literally printed physical money in an effort to get out from under its war debts.
Its inflation was one of the worst in human history, and had people spending money as quickly as possible just because it was getting devalued so rapidly. You would, as I've heard it described, take a wheelbarrow full of money to the store to buy the week's groceries. Towards the end, they "reset" the currency by replacing the old Papiermark with the new Rentenmark -- at a ratio of one TRILLION to one, and the Rentenmark was worth about one US Quarter.
All subsequent actions in the Weimar did nothing but mask the problems -- no actual solutions to Germany's underlying economic issues were performed. The end was Hitler's rise to power.
> Again, your condemnation of me reeks of narrow minded ignorance.
No, my condemnation of you exudes a whiff of repulsion at your attempts at obfuscation and pseudo-argumentation by
a) handwaving.
b) tap dancing.
Trust me -- if you stop engaging in what appears to be intellectual dishonesty (I'm giving you credit for not actually being stupid), I'll stop condemning you.
You appear to imagine that your argumentative cheating goes unnoticed by others. What you fail to grasp is that most just ignore you and don't call you on it. There's a vast chasm of difference.
1) I agree, Mark: any analogy with the Great Depression is misleading, maybe even fatuous.
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2) Where we disagree: the problems in the housing market are traceable to multiple causes and responsiblities . . . as is the case in nearly every complex situation in human affairs. That's why economists, like political scientists and other social scientists, are trained to use multi-regression techniques in modeling --- just as they look for multiple causes and try to weigh them qualitatively, if good quantitative data aren't available, in case-studies.
Fannie and Freddie were pushing for more and more housing mortgages and insuring them, and hence bear some responsibility for the current financial crisis . . . now global in reach.
But financial markets and especially new innovations --- such as various derivatives like CDOs (collateralized debt obligations)and credit-swaps and the repackaging of all these to pass risk along by financial enterprises to some other enterprise down the line --- emerged recently, were totally opaque once they entered the long chain of linked trading world-wide, and ignored basic principles of credit-analysis and risk-management.
At some point, the efforts to deny that these investments were risky and subject to major volatility ended in a huge reverse collapse of panic selling and a recognition that creditors --- a hedge fund, an investment bank, a giant insurance company like AIG, a commercial bank involved in investment activities, or a "virtual bank" --- were extravagantly over-leveraged to dangerous degrees.
Si monumetum requis, circumspice.
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3) Want some concrete evidence?
In 2004, the SEC, chaired by William Donaldson (a Bush appointee) became worried about these runaway derivative instruments --- especially since the deals further along the chained links were totally non-transparent and unknown to the original mortgage banks and insurers and initial repackaging. And so he started allying with the Democratic-appointed Commissioners on the SEC and sought to begin bringing these skyrocketing market transactions under SEC regulations.
The outcome?
Republicans in Congress howled for his head, and so in 2005 he "resigned" and was replaced by a wholehearted free-market enthusiast, Chris Cox. No regulation of CDOs, credit-swaps, and other financial hanky-panky, high-risk financial transactions in the next 3+ years. Just the contrary.
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4) The result here?
Cox admitted publicly, two weeks ago, that he had been badly wrong. Financial markets couldn't self-manage and self-regulate themselves.
(Cox had no choice to own up to his responsibility. The Inspector General of the SEC issued a withering report of its delinquent behavior in the Cox and even early Donaldson era. (Donaldson and the SEC decided in 2004 to allow investment banks to increase their leverage from 10 or 11:1 up to levels of 30:1).
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5) A general methodological observation by way of conclusion.
It repeats what I started out saying under 2).
Virtually nothing complex in human affairs --- even our individual motivation --- is an outcome of one cause. It is almost always multiple-caused, and the duty of social scientists is to sort out these causes, model them mathematically (statistically) if possible, and try to weigh their contributions to these outcomes.
And any good policy advice will have to take into account the knowledge we have acquired in this way. Such as --- please note --- the best studies of the financial collapse and clogging of the credit system in the Great Depression, carried out by our current Federal Reserve chief: Ben Bernanke.
We are lucky. To try dealing with a huge burst of financial collapse and a possible confidence-crisis of herculean dimensions by means of simple gut-level inferences from an ideological set of premises would be a disaster.
That happend in this country between 1929 and 1933.
The most powerful Treasury Secretary in history until now, Andrew Mellon --- in both the Coolidge and Hoover administrations --- dominated all economic policymaking between 1929 and 1933. His ideological gut-level instinct then?
"Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.... That will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people."
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Michael Gordon, AKA, the buggy professor
1) On a another plane, I am constantly surprised by the cocksure declarations about factual events that inform some of these regular posters in this thread. Especially since a few minutes spent using google could easily lead to some accurate information if you know any of the sources.
2)Take the collapse of the Weimar Republic, 1919-1933. What has been said in this thread has, alas, reflected mainly ignorance and instinctive ideological preferences . . . little else.
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3) What happened in the final years of the Weimar Republic and how it related to the Great Depression.
* The first 3 to 4 years of the Republic were consumed in turmoil: attempted right-wing coups, armed insurrections by left-wing extremists (smashed quickly in late 1918 and 1919 just after the war), and huge irregular militias formed by all the major political parties.
* As for the hyperinflation, it flared in those years, but it was totally brought to a quick end in 1923 by the new Chancellor, Gustav Stresseman, who replaced the discredited Mark with a new currency.
* Germany entered a period of stability and prosperity for the next 6 years under Stresseman . . . the era known as the Weimar Republic's golden age.
* The Great Depression hit Germany almost as hard as it hit the US and Canada: unemployment was somewhat lower than in these stable democratic countries by 1933, but the Republic was badly discredited. It never had the support of right-wing militarists and conservatives, nor on the left of a fairly large Communist party; and large segments of the middle class had been alienated by the hyperinflation of the earlier period.
* Class conflicts were sharp, and extremist ideological parties hemmed in the moderate Social Democrats and Liberals that ran the Weimar Republic from 1919 to 1933.
Stresseman died in 1929.
No other effective political coalition could be summoned in the next 3-4 years, and essentially all the next Chancellors ruled by right-wing dictatorial power . . . each of them appointed by the President.
* The last of these dictatorial Chancellors was Adolf Hitler, who was appointed by the President (Hindenburg, the hero-general of WWI) because the conservative elites in the political, financial, and business world (as well as in the army) thought that they could use Hitler's growing popularity for their own ends.
* At the start of the Great Depression in 1929, the Nazi Party --- formed by Hitler right after WWI ended --- was still fetching a tiny part of electoral support (2.6% of the total). Within a year of the massive financial collapse, the failures of one business after another, and soaring unemployment --- remember, never as high in Germany (around 19-20% vs. the US’s 25%) --- the Nazis now became the second largest party in the Germany parliament (18+%). By late 1932, that vote soared to 33%. Hitler was then appointed to dictatorial powers by Hindenburg on the advice of major conservative leaders, who --- to repeat --- thought they could use him for their own purposes.
Those purposes included, right behind doing something drastic about the economic crisis, doing what virtually all the elite right-wing groups in Germany wanted: remilitarization on a vast scale, overturning the Versailles Treaty that ended WWI, and dominating Europe militarily and politically in eventual war. Hitler’s and the Nazis’ extremist racist anti-Semitism and declared hatred for not just the Communists, but Socialists and Liberals and democracy and capitalism --- the Nazi Party was a slogan shortcut for its name, the German Socialist Workers Party --- had a much wider appeal among the German population. That was especially true of the large numbers of farmers, small businessmen, civil servants, teachers, university students (the Nazis won control of student government in virtually all German universities), and certain segments of big business.
Fears of Communism and the Soviet Union also played a role, though throughout the Weimar period between the early 1920s and its end in 1933 all governments secretly trained German pilots and other officers in the Soviet Union (in return for German technological military knowledge) . . . all in violation of the Versailles Treaty.
* Appointed to the Chancellorship in January 1933, Hitler quickly outmaneuvered the right-wing conservatives who brought him to power. In March of that year, he called for new elections and this time won 43.9% of the vote. The total control by the Nazis quickly followed. Hitler assumed total power, dissolved the Parliament, ended all democratic liberties, reassured big business and finance --- he decimated the more radical leaders of the S.A. brown-shirts storm-troopers (millions in number) with the use of his SS black-uniformed Hitler-elite to reassure them and the army heads --- and began rapid remilitarization.
The huge defense spending, followed by a welfare state for the German masses and scapegoating Jews and democrats and all others, ended the Great Depression and prepared Germany for an effort at global conquest and the Holocaust.
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4) The wider fall-out of the Great Depression in Europe. Rampant democratic collapse.
* The wider fall-out of the Great Depression in Europe was the collapse of other new and unstable democratic countries after WWI throughout East Europe --- all except the Czech Republic by 1939 --- were ruled by right-wing militarized dictatorships, as were Spain, Portugal, and Mussolini’s Italy (1922 on). And France, the big democratic country left on the Continent after 1933 --- and a great power --- was consumed in internal turmoil from 1934 right until the German victory over it in May and June 1940 . . . its political spectrum polarized between ideological extremes on the left and right, aggravated by the Great Depression (which hit that country later).
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4) The collapse not just of capitalist economies all over the Continent, but of democracy and the emergence of extremist militarized or outright Fascist countries had one other long-reaching effect --- this one benign.
Specifially, it led the Swedish Social Democrats --- like all Socialist Democratic parties it had condemned the Communist control of the Soviet Union and fought continually with the Communists (in Germany, the CP called the Social Democrats “Social Fascists --- to draw the ultimate conclusion.
On the leadership's view, it was necessary to compromise with the controlling business and financial classes; renounce the ultimate socialist goal of total nationalization of the business and financial sectors; and in return, settle for the development of a growing welfare-state that left (yes!) virtually all of Swedish business in private hands. That is the case today.
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5) Post WWII's echoes.
That welfare state, emerging in Sweden in the early 1930s, was emulated after WWII everywhere in the democratic countries of Europe.
Never again would naked capitalism be able to destroy democracy through a new major economic crisis and collapse. And for the first time in 100 years or more, the primary ideological conflict in West Europe (and now, fortunately, in the former Soviet satellites too) between socialism and capitalism has ended in the adoption of a mixed economy.
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6) A nice little quote to end here:
"To be ignorant of one's ignorance is the malady of the ignorant." --- Amos Bronson Alcott
Michael Gordon, AKA the buggy professor
"Irrelevant to your argument about the Weimar Republic's collapse. "
What??!!
You state that this money was created by printing it. I state that money is not created in the printing. You say irrelevant??? What's the matter with you? Stupid or something??
Money must be lent through the bank system to be of any relevance at all! Your assertion that there was just too much printing shows an extremely superficial comprehension of what makes money money! Or in other words, a very narrow minded ignorance!
Anon
Thanks for the read. I'm sorry if you feel that I sometimes get too emotional, but I have an extreme sensitivity to bs.
I wish you'd sign your postings so that I could tell one anon from another.
> * As for the hyperinflation, it flared in those years, but it was totally brought to a quick end in 1923 by the new Chancellor, Gustav Stresseman, who replaced the discredited Mark with a new currency.
Deceptive and disingenuous.
I don't claim to be an expert on the whole situation, but I do know substantially more than you credit me with.
The economy was restored by implementation of of a new currency which was backed by foreign loans which only buried the problem, much like the excess costs of Social Security are currently buried.
Once the Depression occurred, the loans bounced back into a problem and the economy collapsed again.
You further ignore the fact that the elites of Europe and the USA were noting the looming threat represented by the Soviet bear, and one of the chief reasons they were looking the other way as Germany rearmed because they recognized that the National Socialists and the Soviet Socialists were natural enemies, not the least because they approached their socialism from opposite sides of the spectrum (left vs. right). Hitler and Stalin outsmarted them and formed the Molotov–Ribbentrop Pact which left Germany free to turn on the West, after they split Eastern Europe between them.
In short, the buildup of Nazi Germany was hardly an accident.
> "Irrelevant to your argument about the Weimar Republic's collapse. "
What??!!
You state that this money was created by printing it. I state that money is not created in the printing. You say irrelevant??? What's the matter with you? Stupid or something??
You're a lying sack of crap, Arman.
I said "It's irrelevant to YOUR argument. It's not irrelevant to ALL monetary arguments".
MONEY is whatever people use as a medium of exchange. If people are using Gold, Paper Notes, Bits in a Computer, or Cigarettes, you can obviously inflate or deflate the currency by altering the amount of it in circulation (one of the convenient things about cigarettes as a medium of exchange is that, if there are too many of them, people smoke the excess).
When you take Paper notes and print them, "then put them into circulation" (unstated because I assume you were smart enough to grasp that. Perhaps I was wrong), then you inflate the currency.
It was precisely this action, of placing more and more (then larger and larger) notes into circulation which was the inflationary act. "Granting credit" had nothing to do with it, excepting its role in placing said money into circulation. That was not now. The transfer of money was a physical process, as was the dissemination of it. Without the printed money, you could not "grant credit" to someone. "Well, we'll give you this loan of 5 million marks, but we have no cash to actually give it to you with, so you won't be able to do anything with it..." Pfeh. Idiot.
AT BEST you are playing with words, and, if so, you are an even bigger jackass than you have appeared to be so far. If that's not what you are doing, then you are a just a lying sack of fecal matter.
"When you take Paper notes and print them, "then put them into circulation" (unstated because I assume you were smart enough to grasp that. Perhaps I was wrong), then you inflate the currency."
No. The bulk of money circulating is not circulating with preprinted notes that the fed creates. The money supply is based on the bank lending system. The paper notes are an addendum to the banking system and as such almost meaningless to it. Long before standardized currency, bank credit was issued by letter, draft, and/or check. Money has always been an entry in the bank ledgers and does not need government involvement for the banks to circulate it.
I should imagine that in times of hyperinflation that the notes are less required than in normal times, because bills in your pocket are eroding in value, while money in the bank is at least gaining back some interest. Paying by check would give you a few more days interest at the bank. The higher interest rates that Keynes said would fight inflation increases incentive of lenders to lend, and decreases the reliance upon the paper currency.
> No. The bulk of money circulating is not circulating with preprinted notes that the fed creates.
STOP CHANGING THE VENUE OF THE ARGUMENT ASSWIPE.
The statement was about the WEIMAR REPUBLIC.
I quote:
ANYONE who has examined the collapse of the economy of the Weimar Republic knows
Your original statement AND RESPONSE was about the WIEMAR REPUBLIC.
I quote:
It might well happen in Germany. The 30s depression started in 1924
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Not the #$%#$# Fed.
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Jackass.
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>:-/
.
"Jackass"
Is that your new signature?
The title of this thread is "A Replay Of 1929? Don't Count On It".
I made the mistake of mentioning Germany in my original post (the fourth on this thread), and you thought that the rest of my post was about Germany. No! The Depression was of American doing, and started in 1924 when the minimum wage was outlawed in the US.
When you started talking about the inflation of the Weimar republic, I am well disposed to discuss it, and the effect of Keynesian idiocies upon it. Money is not created in the printing! This statement is absolutely true, regardless what your teacher told you. This statement is absolutely imperative for a comprehension of what happens in all instances of hyperinflation, including Germany. That you think the statement changes the subject is due to you narrow minded ignorance, and nothing else.
You said that cash transfer in those days relied upon the paper notes from the central bank printing service. I tell you that money existed long before any central bank, and does not at all depend upon the central bank's activities.
Your resorting to derogatory comments clearly illustrates a lack of intelligence. So sorry about that.
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