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>"far worse than any inflation." In 1923 the exchange rate has reached 1 trillion DM for 1USD. We all know how it had ended.

by FpUser 4y ago

EGreg 4y ago
Nearly every hyperinflation example (there are very few, in fact) has something additional to that stuff. In the case of Weimar Germany, there was the little matter of THE VERSAILLES TREATY that required them to endlessly pay war reparations and punitive payments in gold. Britain told France to cut it out, but France was mad enough at the Germans that they continued. This led to the rise of the Nazis and WW2. https://www.history.com/news/treaty-of-versailles-world-war-ii-german-guilt-effects https://www.history.com/news/treaty-of-versailles-world-war-... You should read more economic viewpoints, such as Walter Mosler on hyperinflations: https://moslereconomics.com/wp-content/uploads/2020/11/Weimar-Republic-Hyperinflation-through-a-Modern-Monetary-Theory-Lens.pdf https://moslereconomics.com/wp-content/uploads/2020/11/Weima... Oh, and meanwhile there was a "free money miracle" going on in nearby Austria, and clearly did not lead to hyperinflation, quite the opposite: everyone paid off their taxes due to the demurrage of the free money... keep in mind this was while all around them there was a growing depression... even Mises institute grudgingly agrees! https://mises.org/library/free-money-miracle https://mises.org/library/free-money-miracle
- FpUser 4y ago
  >"but France was mad enough at the Germans that they continued. This led to the rise of the Nazis and WW2." Oh I know that. My argument was rather pedantic. Now since you've mentioned it I wonder if the situation with Russia might to the same outcome eventually.
  - deleted 4y ago
    [deleted]
- bfdm 4y ago
  Warren* Mosler, one of yhe founders of Modern Monetary Theory. Lead author was Phil Armstrong, and he did a great discussiom of the paper on the MMT podcast.
  - astrange 4y ago
    Rather, he is Modern Monetary Theory. MMT doesn't have an actual theory of the economy; it uses the standard model and just has a different vibe. So it's just whatever he and Stephanie Kelton feel like saying at the time. The most notable different policy prescription (job guarantee) is odd because it's originally a right-wing program they just decided is left-wing.
    - citizen_friend 4y ago
      Just because they don't completely redefine economic models from the start doesn't mean MMT isn't a theory. They clearly have different ideas about how policy should be implemented and what will happen. Their description of how government issued currency, coercion, and tax act as a tool to capture services from the economy (as opposed to filling up a treasury for the government to spend) is extremely underrated in mainstream economics. > right-wing program they just decided is left-wing. Why would MMT be limited to traditionally left/right boundaries?
      - astrange 4y ago
        > Just because they don't completely redefine economic models from the start doesn't mean MMT isn't a theory. Yes it does, it makes it not an economic theory but a political one. > Their description of how government issued currency, coercion, and tax act as a tool to capture services from the economy (as opposed to filling up a treasury for the government to spend) is extremely underrated in mainstream economics. It is Abba Lerner's functional finance and it essentially only applies to the US federal government, as noone else is big enough. But they also like to extend it to "banks don't lend out deposits", which isn't true. And the idea that you can raise taxes to control inflation doesn't appear to be true either. > Why would MMT be limited to traditionally left/right boundaries? Cuz they're only trying to sell it to left-wing politicians.
- akuchling 4y ago
  Note that professional historians are not united on the Treaty of Versailles being too onerous and a cause of Ww2, though that's certainly the conventional vaguely-heard-about-it impression. https://en.wikipedia.org/wiki/Treaty_of_Versailles#Historical_assessments https://en.wikipedia.org/wiki/Treaty_of_Versailles#Historica...
  - edgyquant 4y ago
    Okay? It was definitely the leading cause regardless of what some modern day historian is trying to convince us of.
- thworp 4y ago
  For a more Austrian viewpoint that is very well sourced and quite compelling imo I'd recommend this series of videos: https://www.youtube.com/watch?v=YygQ0Wq0wDA https://www.youtube.com/watch?v=YygQ0Wq0wDA It argues quite convincingly that war reparations had almost nothing to do with the hyperinflation and that the seeds were sown way before ww1 and then watered during WW1 when germany essentially became a command economy and finally harvested by the first Weimar government's managment.

>"far worse than any inflation." In 1923 the exchange rate has reached 1 trillion DM for 1USD. We all know how it had ended.

by FpUser 4y ago

>"far worse than any inflation." In 1923 the exchange rate has reached 1 trillion DM for 1USD. We all know how it had ended.

EGreg 4y ago

Nearly every hyperinflation example (there are very few, in fact) has something additional to that stuff. In the case of Weimar Germany, there was the little matter of THE VERSAILLES TREATY that required them to endlessly pay war reparations and punitive payments in gold. Britain told France to cut it out, but France was mad enough at the Germans that they continued. This led to the rise of the Nazis and WW2. https://www.history.com/news/treaty-of-versailles-world-war-ii-german-guilt-effects https://www.history.com/news/treaty-of-versailles-world-war-... You should read more economic viewpoints, such as Walter Mosler on hyperinflations: https://moslereconomics.com/wp-content/uploads/2020/11/Weimar-Republic-Hyperinflation-through-a-Modern-Monetary-Theory-Lens.pdf https://moslereconomics.com/wp-content/uploads/2020/11/Weima... Oh, and meanwhile there was a "free money miracle" going on in nearby Austria, and clearly did not lead to hyperinflation, quite the opposite: everyone paid off their taxes due to the demurrage of the free money... keep in mind this was while all around them there was a growing depression... even Mises institute grudgingly agrees! https://mises.org/library/free-money-miracle https://mises.org/library/free-money-miracle

FpUser 4y ago
>"but France was mad enough at the Germans that they continued. This led to the rise of the Nazis and WW2." Oh I know that. My argument was rather pedantic. Now since you've mentioned it I wonder if the situation with Russia might to the same outcome eventually.
- deleted 4y ago
  [deleted]
bfdm 4y ago
Warren* Mosler, one of yhe founders of Modern Monetary Theory. Lead author was Phil Armstrong, and he did a great discussiom of the paper on the MMT podcast.
- astrange 4y ago
  Rather, he is Modern Monetary Theory. MMT doesn't have an actual theory of the economy; it uses the standard model and just has a different vibe. So it's just whatever he and Stephanie Kelton feel like saying at the time. The most notable different policy prescription (job guarantee) is odd because it's originally a right-wing program they just decided is left-wing.
  - citizen_friend 4y ago
    Just because they don't completely redefine economic models from the start doesn't mean MMT isn't a theory. They clearly have different ideas about how policy should be implemented and what will happen. Their description of how government issued currency, coercion, and tax act as a tool to capture services from the economy (as opposed to filling up a treasury for the government to spend) is extremely underrated in mainstream economics. > right-wing program they just decided is left-wing. Why would MMT be limited to traditionally left/right boundaries?
    - astrange 4y ago
      > Just because they don't completely redefine economic models from the start doesn't mean MMT isn't a theory. Yes it does, it makes it not an economic theory but a political one. > Their description of how government issued currency, coercion, and tax act as a tool to capture services from the economy (as opposed to filling up a treasury for the government to spend) is extremely underrated in mainstream economics. It is Abba Lerner's functional finance and it essentially only applies to the US federal government, as noone else is big enough. But they also like to extend it to "banks don't lend out deposits", which isn't true. And the idea that you can raise taxes to control inflation doesn't appear to be true either. > Why would MMT be limited to traditionally left/right boundaries? Cuz they're only trying to sell it to left-wing politicians.
akuchling 4y ago
Note that professional historians are not united on the Treaty of Versailles being too onerous and a cause of Ww2, though that's certainly the conventional vaguely-heard-about-it impression. https://en.wikipedia.org/wiki/Treaty_of_Versailles#Historical_assessments https://en.wikipedia.org/wiki/Treaty_of_Versailles#Historica...
- edgyquant 4y ago
  Okay? It was definitely the leading cause regardless of what some modern day historian is trying to convince us of.
thworp 4y ago
For a more Austrian viewpoint that is very well sourced and quite compelling imo I'd recommend this series of videos: https://www.youtube.com/watch?v=YygQ0Wq0wDA https://www.youtube.com/watch?v=YygQ0Wq0wDA It argues quite convincingly that war reparations had almost nothing to do with the hyperinflation and that the seeds were sown way before ww1 and then watered during WW1 when germany essentially became a command economy and finally harvested by the first Weimar government's managment.