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> Ok, bear with me for a moment - what if the US would use actual physical gold coins instead of dollars? You'll get a bear economy, leading to the eventual de
by cyberax 7mo ago
> Ok, bear with me for a moment - what if the US would use actual physical gold coins instead of dollars?
You'll get a bear economy, leading to the eventual deflation and collapse.
Fun fact: it was not hyperinflation in Weimar Germany that led Hitler to power but _deflation_ because of its insistence on sticking to the gold standard.
- kr1m 7mo ago> Fun fact: it was not hyperinflation in Weimar Germany that led Hitler to power but _deflation_ because of its insistence on sticking to the gold standard. Do you have a source for this? AFAIK https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_R...
- cyberax 7mo ago"Hyperinflation caused Hitler" is one of the common narratives that "everyone knows". But German economy was actually growing during the hyperinflation era and by the time of Hitler's ascension, the hyperinflation had long been in the past. I personally edited this very Wikipedia article several times, but my changes got reverted by goldbugs who want to memory-hole it. This article has a nice explanation: https://www.hertie-school.org/fileadmin/user_upload/20191101_Inflation_Redeker_neues_Layout.pdf https://www.hertie-school.org/fileadmin/user_upload/20191101... If you don't believe the numbers from it, they can be corroborated easily.
- kr1m 7mo agoThanks for sharing. I can corroborate some of the unemployment numbers in Lords of Finance and have no doubt there was some deflation. I do think the seeds of the Third Reich were sown well before this period mostly due to the insistence of France wanting full reparations and Germany borrowing in foreign currencies. https://en.wikipedia.org/wiki/Lords_of_Finance https://en.wikipedia.org/wiki/Lords_of_Finance
- cyberax 7mo agoHyperinflation undoubtedly left a huge psychological scar, especially because it happened right after the loss in WWI. But it did not cause a long protracted unemployment period that directly resulted in mass disgruntlement. And most importantly, the deflation was directly caused by Germany's insistence on staying on the gold standard. And this has been an almost ironclad law: large countries that insist on gold standard end up with stagnating economy. If you want another interesting tale from the opposite side of the spectrum: https://en.wikipedia.org/wiki/W%C3%B6rgl#The_W%C3%B6rgl_Experiment https://en.wikipedia.org/wiki/W%C3%B6rgl#The_W%C3%B6rgl_Expe... - it's a town that was issuing "decaying" money in 1930-s and this helped to revitalize its economy. Another example often cited by Paul Krugman was Washington's childcare coöp, but it's a bit too small-scale.
- atoav 7mo agoI always thought it was the musical energy of Bertold Brechts "Die Dreigroschenoper" that lead Hitler to power. /s Just because two things are correlated in time, doesn't mean they are necessarily causally linked. Surely there are multiple factors at the same time behind the rise of a demagogue. In the case of Hitler the grievances of WWI played probably a much bigger role than economic problems.
- dmoy 7mo agoFair, but at the very least "hyperinflation caused Hitler" is a significantly weaker statement than "deflation caused Hitler", given that the former was replaced by the latter like 8+ years before Hitler's takeover. Economic problems was a big part though, the 1929-33 great depression. It features heavily in political literature pushed by the Nazi party leading up to takeover. You know, like "Arbeit und Brot", etc.
- dmoy 7mo agoHyperinflation in weimar Germany ended by what, 1924-ish with a return to gold standard? Hitler came to power 8+ years later
- CyberDildonics 7mo agoFake economics to "stable money causes hitler" in two sentences. Countries used gold or metals either directly as currency or to back paper currency for hundreds of years. If their governments overspent they collapsed. Saying you need inflation or you get hitler is pretty wild.
- cyberax 7mo ago> Saying you need inflation or you get hitler is pretty wild. Not really. You need inflation, or you end up with stagnation. https://en.wikipedia.org/wiki/W%C3%B6rgl#The_W%C3%B6rgl_Experiment https://en.wikipedia.org/wiki/W%C3%B6rgl#The_W%C3%B6rgl_Expe...
- CyberDildonics 7mo agoYour proof that the economic system that worked for hundreds of years doesn't actually work is a small town that issued their own currency, which allowed them to nominally pay people less and there were more jobs? That's what inflation does, everyone gets paid less, but they don't realize it because they just see the same number coming in and more going out. And then because of that, somehow noninflationary currency results in hitler in 8 years (even though it was used for hundreds of years). I think you should look at the other end, which is governments going broke and not being able to inflate their way out of it.
- cyberax 7mo ago> Your proof that the economic system that worked for hundreds of years It did not. The economic system that was in place for hundreds of years kept the population in a permanent state of depression. Most people had barely enough money to buy necessities. The economic growth exploded, surpassing _millenia_ of innovation within mere _decades_ once we got rid of the golden chains. But I guess that you fancy yourself being landed gentry and not a landless serf?
- CyberDildonics 7mo ago
- killjoywashere 7mo agoUh, yeah, I'm gonna need more of an explainer on that.