The German hyperinflation, 1923

PBS/George J.W. Goodman (aka Adam Smith)/1981

German citizen uses currency as wallpaper in 1923“The cities were still there, the houses not yet bombed and in ruins, but the victims were millions of people. They had lost their fortunes, their savings; they were dazed and inflation-shocked and did not understand how it had happened to them and who the foe was who had defeated them. Yet they had lost their self-assurance, their feeling that they themselves could be the masters of their own lives if only they worked hard enough; and lost, too, were the old values of morals, of ethics, of decency.” – Pearl Buck, who was in Germany in 1923

USAGOLD note:  We came across this article last week while researching another topic and thought it worth passing along as a matter of interest. By posting it, we do not mean to suggest that we expect hyperinflation to burst on the scene anytime soon.  At the same time, one of the points made is that, once a central bank sets foot on the road to inflation, it is difficult to step back.  “So the printing presses ran,” writes Smith, “and once they began to run, they were hard to stop. The price increases began to be dizzying. Menus in cafes could not be revised quickly enough. A student at Freiburg University ordered a cup of coffee at a cafe. The price on the menu was 5,000 Marks. He had two cups. When the bill came, it was for 14,000 Marks. ‘If you want to save money,’ he was told, ‘and you want two cups of coffee, you should order them both at the same time.'”

Repost from 3-9-2020

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