Friday, Dec 21, 2007
The policies of a Banana Republic, here in Europe
Gold Money: Print, Print, Print
Finance Minister: General Idi Amin Dada, there's no more money left in the Treasury
Idi Amin: Well go print some more
Let's flash back to Weimar Germany in 1923. As that country's monetary problems worsened, the central bank, the Reichsbank, in the misguided thinking of that day printed one-half trillion of Reichsmarks. It also had the aim to provide liquidity.
Is there anything essentially different between what the Reichsbank did and what the ECB just did? Absolutely not.
Posted by lvmreader @ 01:36 AM (370 views) Add Comment
4 Comments
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1. Ttimgg said...
Well I don't really understand much economics but I do understand that there is a difference between printed money and credit. When a government prints notes to pay its staff it does not incur a debt. When a bank lends money, it expects the money back, with interest.
The difference is crucial. Printing notes leads to hyperinflation a la Weimar. Issuing credit eventually leads to deflation a la Great Depression, after a period of inflation.
2. David Smith's Sub Prime. . . said...
But but but Mr. Murdoch told me to tell my readership that this wasn't inflationary...
3. sovietuk said...
http://en.wikipedia.org/wiki/Image:Inflation-1923.jpg
4. James said...
"Is there anything essentially different between what the Reichsbank did and what the ECB just did? Absolutely not."
Is there anything essentially diffferent between a cat and a dog? Absolutely not.
But they are quite different animals. Lazy comparison does not a truth make.