Best explanation for Weimar Republic Inflation I ever read....

MMT of course his total liberal BS. Say one thing intelligent about it If you can.

 

I have to admit that is certainly an interesting way of viewing that particular even in history!

I began a discussion on a forum that you may want to get into yourself:


https://www.facebook.com/groups/1834261990161498/

Rebuilding Economics Steve Keen Academy

A "viable alternative for mainstream economics." That sounds kind of challenging but that is exactly what has been on my mind since 1994 when I read specifics on how President Abraham Lincoln had saved American taxpayers four billion dollars in interest payments.

How about A Unified Field Theory of Modern World Problems as a starting point.

1. The G-20 is facing not merely billions, but actually trillions of dollars in investment in sea walls, pumping stations, dikes and levees as they attempt to deal with the threat of rapid cracking and sliding of ice on the West Antarctic Ice Sheet and Greenland.

One obvious alternative is financing the deliberate large scale desalination of ocean water for agriculture and reforestation. One nation on earth has experienced cooling in their climate since 1950. That nation is Israel. One theory is that turning deserts green causes cooling of the climate. On a per capita basis Israel led the world in a combination of planting trees and large scale desalination of ocean water for agriculture, reforestation projects and for towns experiencing drought.

https://permaculturenews.org/2012/1...ack-where-it-belongs-in-the-earth-tedx-video/
TONY LOVELL ON SOIL CARBON: PUTTING CARBON BACK WHERE IT BELONGS – IN THE EARTH (TEDX VIDEO)

...
I live in Nova Scotia, Canada and I feel that the funnelling effect of the Bay of Fundy means that my neighbours in Truro and Pugwash, Nova Scotia, are in the position of the proverbial canary in the coal mine.

This gives us an opportunity because this forces us to look at this more seriously than people who live far inland.

.......Mr. Jaimie Bailley........ I have a question on basic physics that I believe you can turn
into a mission in life.

In my part of Nova Scotia, Guysborough County near Sherbrooke, the difference from
low tide to high tide isn't much more than one meter.

As you know extremely well........ in parts of your riding the difference from low tide to high tide is around FIFTEEN
meters.

My question is.......... if a significant amount of cracking and sliding of ice on the West Antarctic
Ice Sheet were to occur...... and if average ocean levels were to rise by one meter...... would the
difference along part of the Bay of Fundy continue to have a FACTOR OF 15 X?

Would a one meter rise in average ocean levels translate into another fifteen meters added to high tide
due to the funneling effect that the Bay of Fundy has on the tidal waters as it comes in???????

I don't know the answer to this question.

I am hoping that there is some other factor that would lessen the
multiplier effect on high tides in parts of your riding........... but the
question needs to be asked...... because my online friend Mr. Carl Cantrell
gave me an alternative theory on how to address climate stabilization that
has the side benefit of also directly addressing the threat of rising ocean levels.

Obviously every cubic meter of ocean water that is desalinated and added to the
water table of Israel, Jordan, Qatar, Tunisia, California, Saudi Arabia, Australia or any
other nation with lots of desert is good news for people whose homes are along the Bay of Fundy.

http://www.politicalforum.com/index.php?threads/jamie-baillie-nova-scotia-israel-and-jordan.506627/
Jamie Baillie, Nova Scotia, Israel and Jordan.

 

MMT makes it possible to visualize financing a series of projects that can save
the G-20 not only billions of dollars... but actually trillions of dollars in investment in
sea walls, pumping stations, dikes and levees in the event that the West Antarctic Ice Sheet
or the Greenland ice begins to crack and slide more rapidly.

And all at the same time that we produce more food..... people need food!

 

Unless...... a variation of MMT begins to be applied in the USA......
it would be impossible for land prices in rural USA, especially within a hundred miles of cities to
skyrocket out of sight for most potential buyers!

http://www.politicalforum.com/index...-fed-policy-pay-off-usa-national-debt.489825/

Could a real estate boom plus better Fed policy pay off USA national debt?

....

 

I have nominated Mr. Chris Brown to be chosen as National Leader of the Democratic Party
to face President Donald J. Trump in 2020.

President Trump could coopt much of Mr. Chris Brown's campaign platform which would turn
out to be a win - win - win - win - win scenario for 95 - 99% of Americans and I suspect a similar
percentage of residents of planet earth!

http://www.politicalforum.com/index...emocratic-party.489935/page-2#post-1066961109

Nominations for potential leaders for the Democratic Party.

I decided to begin a new discussion with this idea:

http://www.politicalforum.com/index...eader-to-face-president-trump-in-2020.518678/

MMT proponent Chris Brown for DNC national leader to face President Trump in 2020.

 

For the record..... the personal message from AboveAlpha that i quoted on June 15th, in post #18, page one...... was originally sent to me on May 19th, 2017........ so I did really think about this for nearly a month before I quoted his personal message...........

All of us psychologically profile the people we really like.... to at least some degree.... and my feeling is that AA is seriously worried that George Soros and Warren Buffet..... and whoever will join them........ could create economic havoc in many American cities....... if their plan and gambit to devalue the USA dollar is even moderately successful...... even for a number of months.

We Canadians will probably tend to benefit economically from this disaster because many Americans who can easily obtain visas, will move north to our nation in order to benefit from a more stable economic climate. This should probably result in a boom in the housing sector in Canada..... which you would tend to think would benefit many other sectors of our economy as well.............

No wonder P. M. Justin Trudeau is courting the Chinese so actively........
because the currency that is planned to partly replace the USA Dollar as the word's reserve currency.... could well be printed in China???????

AboveAlpha knew that my being Canadian would give me a freedom to deal with this number in a different manner than most anybody else could..... the fact I live about a hundred miles from Truro, Nova Scotia, (the fairly large town with some of the worlds highest tides).... is important as well......... and was surely also a factor in why he wanted me thinking about what could happen in the USA... .and in Canada.... if those trillions of Petro-dollars hit the markets too fast... .and cause confusion and fear in the minds of investors............


http://www.politicalforum.com/index...ge-soros-vs-mark-taylor-and-crazytate.515832/

Warren Buffet and George Soros vs Mark Taylor and CrazyTate?

 

But....... if President Lincoln had decided to pay the bankers those
extra four billion dollars US to make them very, very, very, very happy........
it would have not necessarily done much to assist American farmers........
because bankers can only eat one filet mignon at the time...........

.... and in order to increase demand for beef ..... you need to get more money into the
hands of the average American!

 

Partly because there are quite a few major investors who want the USA dollar devalued.......
and are willing to go public with their plans to arrange it.


http://www.politicalforum.com/index...ge-soros-vs-mark-taylor-and-crazytate.515832/



Warren Buffet and George Soros vs Mark Taylor and CrazyTate?


https://totalwealthresearch.com/ric...-gamble-bet-u-s-collapse-warns-cia-economist/

Buffett’s $55 Billion Gamble is a Bet on U.S. Collapse, Warns CIA Economist

 

True..... but when that extra four billion dollars........
goes into the hands of a segment of the population who consider themselves to be the elite.......
above 99.999% of the people...........
then that 0.001% elite... tend to do with the extra four billion......
pretty much what the elite families of the town of Canso, Nova Scotia did.......
at the time that Fr. Moses Coady Ph. D. was raising up The Antigonish Movement...........

That segment of the population...... high level bankers.... already have lavish homes.....
that are well furnished... .so they tend to invest that extra four billion in projects.....
that often..... DO NOT create jobs for the ignorant masses..... the 99.9% of the population????

http://coadyextension.stfx.ca/people/leaders/moses-coady/

Simply ..... two large aristocratic families had a monopoly on the marketing of the fish caught by the fishermen of Canso. When Dr. Moses Coady organized the fishermen into a cooperative...... who marketed the fish themselves........ they were astonished by the HUGE increase in revenue that came to the fishermen through their cooperative.

 

First, the post you quoted is half nonsense. There was no destruction of factories in Germany during WW1. None.
The western front at the end of the WW1 had not even entered Germany yet. And aerial bombing back then was minimal...at best.
Reparations were very bad...but he just flat out made up the part about German factories being destroyed after WW1.

And back in the time of the Weimar Republic, the definition of inflation WAS an increase in the money supply.
Today, it is more to do with prices.

It's simple logic.

If you have $1,000 dollars and 1,000 widgets in an economy...each widget averages $1 in value. If you suddenly double the money supply, then each widget now averages $2 in value.

Venezuela flew in plane loads of paper to make more currency. The result? 800% inflation.

https://www.wsj.com/articles/inflat...orders-bank-notes-by-the-planeload-1454538101

https://tradingeconomics.com/venezuela/inflation-cpi

You cannot print money like mad and not eventually have inflation. Just ask Venezuelans.

 

Destruction is a word... subject to definition.....
during WWI the factories of Germany had been switched over to wartime footing.......
and switching back to consumer products.......
is not an entirely easy thing to do.......
especially under the conditions Germany faced after losing WWI.

 

"The First World War destroyed a good third of the nation’s [Germany] wealth and led to a drop in industrial production of approximately 40 percent by 1918."

Source: https://encyclopedia.1914-1918-online.net/article/organization_of_war_economies_germany

Didn't make it up.

Regardless of the definition, the effect is exactly the same.

Few thoughts.

First, you need to re-evaluate your logic.

If you doubled the money supply and deposited all that money at the Central Bank (or people deposited the money in their own savings accounts), prices wouldn't change at all because business owners don't react to changes in the quantity of money, they react to changes supply relitive to demand. If supply increases and demand stays the same, business will lower prices until they can clear inventory. If supply declines, businesses will increase prices to prevent clearing in excess of supply.

Now, if you doubled the money supply overnight, yes you would have inflation.

But, conversely, if productivity doubled overnight, prices would be cut in half (proving that prices aren't the result of the creation or destruction of currency alone).

Thus prices are a reflection if the level of productivity relative to demand.

Demand is the result of people who have money and the desire to spend it.

Sure, but look at the precipitating event....

Venezuela unwisely based its economy overwhelmingly on a single import, oil. When the price of oil declined across the industry (because productivity increased relitive to demand), the money Venezuela had already created and was in circulation was worth less (before large scale money creation began). Why? Because that money could buy twice as much oil. Thus the currency was worth significantly less. Because Venezuela relied so heavily on exports of oil, the economy began to fail as they earned significantly less from the sale of oil. The government, due to lack of diversification, now had a real problem. The nations agriculture industry could not support its own population. Imports of food became significantly more expensive. The government's response has been to create more money and this has driven inflation.[/QUOTE]

 

Sorry, but I don't do long, multi-quote replies...they just end up taking FOREVER and usually lead nowhere.

I will answer the first part and that is it.

You typed: 'The precipitating cause was the loss of productivity due to the destruction of factories during the war'.

Here is the armistice line at the end of the war. If you look, you will see that the Allies had not even entered Germany yet. And aircraft were WAY too crude and few to have destroyed any significant German industry.



And Germany beat Russia in 1917...so there was no way German industry was destroyed.

The reason for the drop in production was all of the men killed in the trenches AND by the end of the war, Germany had thrown just about every man they could find into the Western Front meat grinder. There were simply not enough men left to work the factories (or the fields).

You assumed it was from destruction and stated it as fact. If you are going to post an erroneous fact as truth - I have every right to call you on it.
Next time, I suggest you not guess when you do not know.


As for the rest, I have gotten into these arguments FAR too often with people. You want to think money printing does not lead to inflation....go ahead.

I KNOW it eventually does.

We are are done here...good day.

 

Quantitative easing?

 

Well, I did say 'eventually'.

Plus, QE is temporary as the bonds are now being paid off when they mature...and the Fed slowly winds down it's MASSIVE balance sheet.

Plus, I imagine the electronic money created by fractional reserve banking is probably even more then QE.

I am talking about the 'printing' of money simply to try and kick start an economy. If QE was bigger and permanent and not aimed primarily at equity markets, I think it would have a definite negative effect on inflation (i.e. make it go up).

Plus, almost all major nations are doing it as well - in different ways. So, it can be argued that all major currencies (dollar, Yen, Yuan, Euro) are being weakened at the same time...thus masking the inflationary effects (something I believe was done deliberately as all the major banks adopted roughly the same policy at the same time).

You can only dump so much money into a struggling economy before the value of your currency starts to go down.

 

[/QUOTE]


Wow!!!!
Awesome answer on this Econ4Every1!

I am optimistic that the world economy could be so positively transformed by the year 2021 that we hardly recognize it.

Those of us who are terrified of any changes though will find the shift scary but......
amazing new opportunities will be created, (G-d willing).... pretty much in every sector of the economy.

I have a question for you Econ4Every1...... could the introduction of high mileage internal combustion engine technology...... that I believe was patented back in the 1970's or even earlier..... assist in causing a boom in real estate prices within a hundred miles of major USA cities?

Decreasing the cost of going back and forth to their land in the countryside...... or to their job in the city.....I would think could significantly alter the formula?

http://www.politicalforum.com/index.php?threads/ocean-acidification.394228/page-2#post-1064736134

I have reason to believe we are at the cusp of a revolution in low cost methods of transportation that will cause us to place a higher value on real estate outside the cities.

http://www.politicalforum.com/index...-fed-policy-pay-off-usa-national-debt.489825/

Could a real estate boom plus better Fed policy pay off USA national debt?

 

Don't you think the days of teaching from MV=PT looks a little suspect? QE boosting was massive (and it was printing money, so let's not pretend otherwise). In prior era, we'd be stating hyperinflation and running away like it was a killer bunny with a holy handgrenade. What went wrong in the rhetoric?

 

Well, QE is no guarantee that the money will enter the economy if the banks don't lend it or spend it. And QE was designed explicitly to stimulate the equity markets...not the economy, per se. And it did just that.
Also, once the bonds in QE reach maturity, the Fed can pay them off (in essence).
In other words, the QE debt is (theoretically and stated as such as) temporary. Whereas government debt just keeps getting rolled over.

Plus, since all major currencies are doing forms of this, all currencies are being negatively affected...thus the U.S. Dollar index is not largely changed.
This further masks the effects of money 'printing'.
If only America were doing this and running huge deficits...the dollar index would surely fall significantly...which would significantly raise the cost of imports/commodities and thus raise inflation.
But this is not happening as everyone is drinking from the punch bowl.

 

So this is an occasion where macroeconomic theory fails? Let's not forget that the whole financial crisis experience was also alien to the 'we know stuff we do' theoretical macroeconomists. They've been brought to heal since. And that necessarily includes their previous white lies that they understood how things operate.

 

In one way.....
just as encouraging citizens to purchase USA and Canada Saving's bonds during WWII
decreased inflation.....
so also.... all the many financial tools on the market at this time is diverting money away from overly excessive consumer spending that could indeed cause more inflation / devaluation of national currencies.

The Trump Presidency is somewhat decreasing inflation.....
by increasing investment.......

Dow rockets past 24,000, building on incredible post-election surge

http://money.cnn.com/2017/11/30/investing/dow-24000-stocks-wall-street-trump/index.html

 

How do you envisage the US eliminating its consumption led trading imbalance?

 

Which economic theory? There are lots of them.

The 'Krugmanites' who think more and more money printing is the way out have been proven wrong as this theory has stagnated the world's economies. Europe, Japan and America have all stagnated. They keep dumping more and more cheap money into their economies, and all they get are these tepid growth rates (China is different in that it started from waaaay back - plus it's hard to know what numbers they post are legit).
And if you look at the employment-population ratio (a far better unemployment measure then the U-3 IMO), the ratio is still no where near where it was at the start of the 'Great Recession'.
Plus, the M2 money Velocity is by MILES the worst in recorded history...which proves that people are not spending their money...just spending new debt.
Now, the Fed (and other central banks) are trapped. They don't dare raise interest rates or the party is over. Plus, government deficits will skyrocket as interest rates grow.
Fundamentally, the economy is a mess....in America, Europe, Canada and Japan (which is in MAJOR trouble with GINORMOUS debt and a declining population).

I suggest that had the government just balanced their budgets, left interest rates at historic norms and let the economies fix themselves (basically as was done after the 1920/21 depression), that the recovery would have been FAR quicker, GDP growth would be far higher by now and debt levels would be nowhere near what they are today.

 

Not in macroeconomics! Lets be honest now: it was macroeconomists, and their belief that they knew the economy, which enabled the financial crisis. Have they really recovered since?

You miss reference, for example, to how austerity has corrupted policy-making. That is again the fault of macroeconomists. They didn't kick the stupidity of it in the shins.

 

There are lots of different macroeconomic theories. Krugmanomics. Keynesianism, Austrian School and on and on.
I am - if anything - an Austrian schooler.
Yes, most economists lately have been Krugmanites/Keynesian's. And yes, they have been proven wrong, IMO. But I doubt they would see it that way.
They think they SAVED the world from collapse (utter nonsense, of course).

Not sure what your point is here.

 

Believe you or an encyclopedia?

Look it's simple. Germany outspent all other nation in the war. Inflation was caused by a number of factors, but when the Brits blockaded the supply of raw materials this began the rise in inflation for reasons I've cited over and over again. The ratio of money created, to the supply of goods created could not be maintained because, as I've pointed out, they ran short or raw materials.

Add to that the fact that the money that German spent after the war was largely to purchase gold (rather than to help rejuvenate the private sector). Every dollar that flowed out of the country didn't do anything to revitalize German industry, which was, despite your revisionist claims, severely depleted after the war.

As far as money printing and inflation, it's like asking is 60mph too fast, the answer it, it depends. Creating money does not, by necessity create inflation, but it can and the kind of inflation caused in Hungry, Germany, Zimbabwe, et. al were unusual examples of economies that ran up against resource constraints, not willy eyed drunk politicians spending wildly on whatever they wanted.