When Money Dies: The Nightmare of Deficit Spending Devaluation and Hyperinflation in Weimar Germany
When Money Dies is the classic history of what happens when a nation’s currency depreciates beyond recovery.In 1923, with its currency effectively worthless (the exchange rate in December of that year was one dollar to 4,200,000,000,000 marks), the German republic was all but reduced to a barter economy.Expensive cigars, artworks, and jewels were routinely exchanged for st...more
Consider the mid-war inflation of the mark: it went from being around 1 Gold Mark= 1 Paper DM to 1 Gold Mark= 1 TRILLION Paper DM within a scant four years. Such a radical inflation led to some strange events, including--
* thieves stealing suitcase...more
Fergusson certainly touches on these things but his w...more
This isn't to say one can't follow the story, or that it is not worth reading. It is just unfortunate that a...more
The main thing I got from the book was a much better sense how it happened: I had vaguely assumed the inflation was a conscious tactic to evade pa...more
30 years ago it would have seemed self-evident madness to print money to reflate an economy, as was done in Germany, Austria and Hungary in the 1920s. The excuse - if there can be one - for politicians at that time was...more
At times it is very hard to follow and even contradicts itself: as an example we are told on one page that middle-class Germans on fixed incomes were forced to sell their valuables to buy the bear necessities; two pages later...more
What is most interesting and valuable about it is the first hand accounts of the massive distortions in the economy in general, and prices in particular....and who lost (most people) and who benefited (yes, there were a few).
For example, the money printing not only caused p...more
“‘In the whole course of history, no dog has ever run after its own tail with the speed of the Reichsbank. The discredit the Germans throw on their own notes increases even faster than the volume of notes in circulation. The effect is greater than the cause. The tail goes faster than the dog.’” (quoting Lord D’Abernon, 117)
Paper marks: “Havenstein rubles” (165)
So what exactly happened in the Weimar Republic?
In short, the post-war Weimar Republic found itself with a staggering amount of debt. The government lacked the political will to raise taxes or to cut spending. Therefore, to deal with these debts, Germany chose the "easiest" path -- the path of printing money. Anyone familiar with Germany's history knows what happened next -- the death of...more
Until I was halfway through, I didn't know about the recent resurgence of interest in the book. (I discovered it through a reference elsewhere.) Despite the publisher's blurb about "quantitative easing" on the back of the book, and the author's Conservative credentials, I think anyone reading this as a cautionary tale about modern monetary policy may leave disappointed. As i...more
I should add that the origins of the Weimar...more
Also contains a far bit of dodgy arithmetic eg 50% per month being equivalent to 300% per year (it's actually about 13000%). It also mentions the mark falling by 250% in a month - was it really worth a negative amount?.
However, the social and political history makes up for the failings in other areas, and uses the proper size of a billion (12 noughts), using milliards and billiards for 9 & 15 noughts res...more
Great book, but the economics for myself are sometimes a little difficult to grasp. It is good advice to heed, for any country, and it does explain how extremists can take advantage of peoples perilous situation...more
I read this as part of a research paper on the economic roots of World War II and it makes a clear case as to why Germany ended up the way it did and why they'd follow someone, really anyone, who told them that things would get better.