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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Bid Buster who wrote (267893)11/19/2003 12:02:51 PM
From: Tommaso  Read Replies (1) of 436258
 
Germany's hyperinflation was a "consequence of the peace," to borrow part of the title of the tract that made Keynes's reputation as a young man.

France and England tried to may Germany pay for all the damages of the war, and thereby stripped the country of capital and of real money. The Weimar government resorted to literally running the printing presses. I still own somewhere postage stamps from the era that had to be run back through the presses to revalue them at a hundred times their original denomination.

Nothing close to this has ever happened in this country and is not happening now. The proliferation of debt, however, is very serious. I was just talking to a fired on Saturday, whom I think of as a cautious, prudent, person. I was recommending the stock USU to him. He thanked me, but he said, "We are now operating totally on debt. I have no money to invest."

What is going to happen to my friend and everyone else when interest rates triple? First, they will have to cut back on all sorts of spending, where they can. Ultimately they may default on some of their loans. They may lose their houses.

Whatever we are headed for, it won't be like the Weimar Republic. Maybe like Brazil, however.
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