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Quantitative Easing Did Not Work For The Weimar Republic Either

Did printing vast quantities of money work for the Weimar Republic?  Nope.  And it won’t work for us either.  If printing money was the secret to economic success, we could just print up a trillion dollars for every American and be done with it.  The truth is that making everyone in America a trillionaire would not mean that we would all suddenly be wealthy.  There would be the same amount of “real wealth” in our economy as before.  But what it would do is render our currency meaningless and totally destroy faith in our financial system.  Sadly, we have not learned the lessons that history has tried to teach us.  Back in April 1919, it took 12 German marks to get 1 U.S. dollar.  By December 1923, it took approximately 4 trillion German marks to get 1 U.S. dollar.  So was the Weimar Republic better off after all of the “quantitative easing” that they did or worse off?  Of course they were worse off.  They destroyed their currency and wrecked all confidence in their financial system.  There was an old joke that if you left a wheelbarrow full of money sitting around in the Weimar Republic that thieves would take the wheelbarrow and they would leave the money behind.  Will things eventually get that bad in the United States someday?

Of course we are not going to see hyperinflation in the U.S. this week or this month.

But don’t think that it will never happen.

The people of Germany never thought that it would happen to them, but it did.

The following is an excerpt from a Wikipedia article about the Weimar Republic.  Take note of the similarities between what the Weimar Republic experienced and what we are going through today….

The cause of the immense acceleration of prices that occurred during the German hyperinflation of 1922–23 seemed unclear and unpredictable to those who lived through it, but in retrospect was relatively simple. The Treaty of Versailles imposed a huge debt on Germany that could be paid only in gold or foreign currency. With its gold depleted, the German government attempted to buy foreign currency with German currency, but this caused the German Mark to fall rapidly in value, which greatly increased the number of Marks needed to buy more foreign currency. This caused German prices of goods to rise rapidly which increase the cost of operating the German government which could not be financed by raising taxes. The resulting budget deficit increased rapidly and was financed by the central bank creating more money. When the German people realized that their money was rapidly losing value, they tried to spend it quickly. This increase in monetary velocity caused still more rapid increase in prices which created a vicious cycle. This placed the government and banks between two unacceptable alternatives: if they stopped the inflation this would cause immediate bankruptcies, unemployment, strikes, hunger, violence, collapse of civil order, insurrection, and revolution. If they continued the inflation they would default on their foreign debt. The attempts to avoid both unemployment and insolvency ultimately failed when Germany had both.

When the Weimar Republic first started rapidly printing money everything seemed fine at first.  Economic activity was buzzing and unemployment was very low.

But as the following chart shows, when hyperinflation kicks in, it can happen very quickly.  By late 1922, the effects of all of the money printing were really starting to hit the German economy….

Once you start printing money it is really, really hard to stop.

By late 1922, inflation was officially out of control.  An article in The Economist described what happened next….

Prices roared up. So did unemployment, modest as 1923 began. As October ended, 19% of metal-workers were officially out of work, and half of those left were on short time. Feeble attempts had been made to stabilise prices. Some German states had issued their own would-be stable currency: Baden’s was secured on the revenue of state forests, Hanover’s convertible into a given quantity of rye. The central authorities issued what became known as “gold loan” notes, payable in 1935. Then, on November 15th, came the Rentenmark, worth 1,000 billion paper marks, or just under 24 American cents, like the gold mark of 1914.

Hyperinflation hurts the poor, the elderly and those on fixed incomes the worst.  The following is an excerpt from a work by Adam Fergusson….

The rentier classes who depended on savings or pensions, and anyone on a fixed income, were soon in penury, their possessions sold. Barter often took over from purchase. By law rents could not be raised, which allowed employers to pay low wages and impoverished landlords in a country where renting was the norm. The professional classes — lawyers, doctors, scientists, professors — found little demand for their services. In due course, the trade unions, no longer able to strike for higher wages (often uncertain what to ask for, so fast became the mark’s fall from day to day), went to the wall, too.

Workers regularly got wage increases during this time, but they never seemed to keep up with the horrible inflation that was raging all around them.  So they steadily became poorer even though the amount of money they were bringing home was steadily increasing.

People started to lose all faith in the currency and in the financial system.  This had an absolutely devastating effect on the German population.  American author Pearl Buck was living in Germany at the time and the following is what she wrote about what she saw….

“The cities were still there, the houses not yet bombed and in ruins, but the victims were millions of people. They had lost their fortunes, their savings; they were dazed and inflation-shocked and did not understand how it had happened to them and who the foe was who had defeated them. Yet they had lost their self-assurance, their feeling that they themselves could be the masters of their own lives if only they worked hard enough; and lost, too, were the old values of morals, of ethics, of decency.”

Of course not everyone in Germany was opposed to the rampant inflation that was happening.  There were some business people that became very wealthy during this time.  The hyperinflation rendered their past debts meaningless, and by investing paper money (that would soon be worthless) into assets that would greatly appreciate thanks to inflation, many of them made out like bandits.

The key was to take your paper money and spend it on something that would hold value (or even increase in value) as rapidly as possible.

The introduction of the Rentenmark brought an end to hyperinflation, but the damage to the stability of the German economy had been done.  The German economy went through several wild swings which ultimately resulted in the rise of the Nazis.  The following description of this time period is from an article by Alex Kurtagic….

The post-hyperinflationary credit crunch was, not surprisingly followed by a credit boom: starved of money and basic necessities for so long (do not forget the hyperinflation had come directly after defeat in The Great War), many funded lavish lifestyles through borrowing during the second half of the 1920s. We know how that ended, of course: in The Great Depression, which eventually saw the end of the Weimar Republic and the beginning of the National Socialist era.

By the end of the decade unemployment really started to take hold in Germany as the following statistics reveal….

September 1928 – 650,000 unemployed

September 1929 – 1,320,000 unemployed

September 1930 – 3,000,000 unemployed

September 1931 – 4,350,000 unemployed

September 1932 – 5,102,000 unemployed

January 1933 – 6,100,000 unemployed

By the end of 1932, over 30 percent of all German workers were unemployed.  This created an environment where people were hungry for “change”.

On January 30th, 1933 Hitler was sworn in as chancellor, and the rest is history.

So where will all of this money printing take America?

As I wrote about in a previous article, the amount of excess reserves that banks have stashed with the Federal Reserve has risen from about 9 billion dollars on September 10th, 2008 to about 1.5 trillion dollars today….

What is going to happen to inflation when all of those excess reserves start flowing out into the regular economy?

It won’t be pretty.

Just consider the ominous words that Philadelphia Fed President Charles Plosser used earlier this week….

“Inflation is going to occur when excess reserves of this huge balance sheet begin to flow outside into the real economy.  I can’t tell you when that’s going to happen.”

“When that does begin if we don’t engage in a fairly aggressive and effective policy of preventing that from happening, there’s no question in my mind that that will lead to lots of inflation.”

Oh great.

And so what is Bernanke doing?

He is printing up lots more money.

But isn’t this supposed to help the economy?

I wouldn’t count on it.

According to USA Today, the following is what Plosser says about the effect that QE3 is likely to have on our economy….

“We are unlikely to see much benefit to growth or to employment from further asset purchases.”

But we will get more inflation, so our monthly budgets will not go as far as they did before.

The other day I was going to the supermarket, and my wife told me that she wanted some croissants.  When I got to the bakery section I discovered that it was $4.49 for just four croissants.

If it had just been for me, I would have never gotten them.  I am the kind of shopper that doesn’t even want to look at something unless there is a sale tag on it.

But I did get the croissants for my wife.

Unfortunately, thanks to Federal Reserve Chairman Ben Bernanke soon none of us may be able to afford to buy croissants.

I still remember the days when I could fill up my entire shopping cart for 20 bucks.

And it was not that long ago – I am talking about the late 90s.

But paying more for food is not the greatest danger we are facing.  Bernanke is destroying the credibility of our currency and he is destroying faith in our financial system.

Bernanke may believe that he is preventing the next great collapse from happening, but the truth is that what he is doing is going to make the eventual collapse far worse.

Better get your wheelbarrows ready.

  • Alvin

    With this being the electronic age the process will go much FASTER. No need to print and distribute paper money, all done on a key board. Make preparations now as once it starts it will be too late, the “in the know” will get out first leaving the masses holding the bag (empty bag) as with this money cannot even use to keep the fire going in your fire place. The gasoline has been spread, just need for something to strike the match. Any chance that paper money will lose value slower than digital money ?
    Coins such as nickels may be worth holding on to for buying small items.

    • OLdFART

      Last year Sam’s club sold 50# bags of white rice for just over $15. They are now well over $18

  • SSomthing Wicked Comes This Way

    Michael writes; But what it would do is render our currency meaningless and totally destroy faith in our financial system.

    That’s exactly what they want to happen, these men are not foolish nor stupid, they are clever, deceitful and all part of a very powerful elite banking cartel.
    They have every intention of destroying our economy, in an effort to set up a one world banking system controlled by these very bankers.
    The,re goal; Control every aspect of your lives from the food you consume, to the God you worship, and all the while they will be fleecing our citizens of every last dime.
    Its happening now, You’re reading about it in the news everyday and don’t even realize the end game, its already set in motion, there’s nothing you or I can do, unless…..

    • http://www.robbysworks.com Robert

      Unless what?

    • Timothy

      Agreed- people desperately need to WAKE UP!! The amount of normalcy I see day to day is disturbing, every bit as frightening as to what I see happening to our country/world very soon. This is the end game for our fiat currency and I would bet most people either reject this because they are in denial or they are too far conditioned into eating, seeping, breathing and spending the way they were taught from good old “big brother”. Most people don’t realize it but what they are told in the news is a far cry from the truth, a fabrication at best with small bits of B.S. to side track what is real. The NWO is real and it’s not some futuristic “maybe”, It’s already here just too subtle for most to recognize. Good news right now is that we have time to prepare, but that window of opportunity is closing rapidly.

    • Erick

      Unless we fire these bankers immediately put our government on trial and recognize the situation as a majority. We need to talk to everyone about this. After people realize the gravity of the corruption people may be more weary of for whom they cast their vote. I think if we went back to constitutional law and disregard the federal government as an authority on anything other than military things would start sorting itself out very quickly.

    • wardoc

      unless……

      ….”The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”
      — Thomas Jefferson

  • Kevin2

    Germany’s QE took out Germany. The USD is the reserve currency of the world. The dynamics are different both better having a much greater pool to dilute into and worse because governments (some not too friendly to begin with) may decide to no longer use the USD in international trade. The potential dumping of dollars by governments was something Germany need not fear. In that respect we’re worse off.

    Because it’s such a cornerstone of the US economy I have no doubt that the US will go to war, major war to retain the status of the USD as the world reserve currency. The only thing worse than an economic collapse is a global war with an economic collapse.

    • dude

      so which country will US Govt attack to retain US Dollar as world reserve currency? China , Russia, or NK?

    • Eisenkreutz

      True that.

    • jox

      This has already happened. It seems that the real reasons of the Iraq and Libya wars was that they tried to sell oil in other currencies than the dollar.

  • McKinley Morganfield

    A nice, but fearful, collection of info/data. Now is the time to invest in commodities: food with a long storage life, wines and liquors, simple things like matches, candles, first aid supplies, and silver. We will see hyperinflation followed by deflation and then a collapse of the system.

    • dude

      Do you mean Bullion silver or Papaer Silver?
      Will Paper Silver work?

    • GSOB

      yup

    • Matt

      And coffee and stuff us city folks can’t grow on our little 1/4 acre lot. We stock up on rice, beans, oatmeal, flour and freeze dried items from http://www.srmarketplace.com. You can’t find freeze dried chicken or powdered eggs at the local store and this place always had good deals.

    • Optimistic Pessimist

      Good comment – I’ll add to that, yes fearful but with knowledge and understanding we can combat fear, overcome it and even turn things to our advantage.

      OP

  • Mondobeyondo

    And you all know what happened after the Weimar Republic collapsed, right?

    Yeah, some Austrian guy (although most people think he was born in Germany, he was actually Austrian) became really famous. No, not Arnold Schwartznegger.

    Let me think…. umm… Hisser? Hipster? Ah yes… Hitler. Will this be our future as well? God help us if it is.

    • http://www.robbysworks.com Robert

      If it is, it will not take the form of evil but of hope, noble goals, and high ideals.

      • Mondobeyondo

        One can only hope… but remember that Germany was a highly cultural and intellectual country before The Bad Days happened. If such an economic and political crisis could happen to them, it can definitely happen to us. Our scientific, medical and cultural successes will not save this country from mobs of hungry, angry people.

      • onething

        You don’t think that Hitler spoke of hope, high ideals and noble goals? We are already evil…we invade small, weak countries and kill their women and children.

    • K

      Mondo, well done. A rare man who not only reads history, but understands the lessons. We both know what comes next don’t we. As things get worse, which group will it be blamed on this time? No facts, no proof, just blame.

    • Eisenkreutz

      It already is. Look at the angry black muslim communist we voted into the white house. Always the Bolshevik rats promise equality and happiness and always they bring death and destruction. Given the chance Obama will enslave us all. And hes going to.

    • DB200

      Mondo,
      To have an idea how desperate the Germans were at that time: they voted an Austrian for prime minister. Not even one of their own, but a foreigner. Can you imagine that Americans are so desperate that they would vote a Canadian for president?

      Now you may think that all Germans were Nazis in the 30s. Wrong. They were not. If I remember history class well, Hitler got about 34% of the votes in 1932. But with shrewd politics and control of the streets with his SA, he and his cronies soon took all the power. With the support of bankers and industrialists.

      • Mondobeyondo

        That’s very true. Not all Germans were Nazis.

        My memory fades me (high school history was a loooong time ago, and there’s bound to be some errors in this), but if I recall, the Nazis were actually VOTED into power!! Germany actually held presidential elections in those days, and I believe the Nazis came in at 3rd place. After President Hindenburg died – yes, the zeppelin was named for him – Adolf Hitler took total control of the country. Then came the Reichstag burning, the anti-Jewish laws, the pogroms, the invasions of Austria and Czechoslovakia, the lame “peace” treaties (“peace in our time!” said Neville Chamberlain)…

        Unfortunately, once things got going (in a bad way), those who don’t want to be a part of it are forced to become a part of it, or leave the country. Either that, or be placed in a “re-education camp”… and that is what I fear could happen right here, in the land of the free and the home of the brave.

        • DB200

          Well Mondo, let me complement that:

          Hindenburg (who was part of the industrialists and bankers) died in 1935, and at that time the democracy was already completely eroded so Hitler could easily take over this position. The Reichstag was burned in 1933, set afire by a Dutch Communist Van der Lubbe to protest against the Nazis. Hindenburg, not exactly a friend of the commies, passed a decree invoking civil liberties to be suspended. Then the mass arrests of Communists started, including members of Parliament. At that point, with so many Parliament seats empty, Hitlers NSDAP obtained majority in Parliament and the rest is history.

          My grandfather traded with the Germans in the 30s and he knew it would be war. In 1937, after a couple of beers, he was told: First, we want to make a little bit of war (Zuerst wollen wir ein bisschen Krieg machen). So you could see it coming, but only if you kept your eyes and ears wide open.

          I can tell you many more stories about the occupation in WW2 but I won’t bother you. It is just enough to tell you that 70 years later there are still scars in society. Hyperinflation is a pick nick compared to 1940-1945.

  • Robert silva

    Sorry Michael
    I could never resist to leave a comment:
    The croissant situation is wonderfully linked with the french revolution history

    Man, where are all of us going to?
    Do we have a safety place to be?

    Thanks for the three blogs of yours
    reading it always Here from brazil
    always reading you and learning a lot and of course trying to prep hard, but still very confused with the times we’re living

    • Michael

      It is great to hear from someone in Brazil, and I am glad that you are enjoying the websites. :)

      Michael

    • Optimistic Pessimist

      The croissant situation rings a bell with me: Saw the price of a tin of tuna yesterday at £1, a year ago it was 45p.

      OP

  • BeenThere

    I am amazed at how rapidly the hyperinflation ramped up just in the year 1923 alone. Looks as if it could easily happen in the US in the near future.

    • Mondobeyondo

      It can, and it will.

  • http://www.gangarosa.com/navyseals.htm prepguy

    Maybe we will start using wheelbarrows as currency?

  • http://www.prepper-resources.com PJ Prepper

    GREAT article Michael, updating this link for my update tomorrow. Thanks for doing the research required to post this, people really need to understand what a dire position we are in as a country.

    PJ

    Prepper-Resources.com

  • Imaplaneiac

    Michael,what’s your third web site; as mentioned by Robert the Brazilian blogger. I know of only this blog and the endoftheamerican dream.

  • http://EconomicCollapse Already Gone

    My wheelborrow was stolen will a red wagon work?

    • Mondobeyondo

      I think you’re going to need something a little larger than a Radio Flyer wagon. Like that fisherman from “Jaws” said, “We’re gonna need a bigger boat”.

  • http://www.survive2balive.com GA

    QE until they can’t QE no more. Time to expedite the preparedness. Check us out at http://www.survive2balive.com for some basics on how to get started. Its absolutely going to get painful for all of us, even the prepared, but you can help minimize your sufferring by getting your preparedness strategy together now! Time is growing short.

  • Weimar Wheelbarrow

    Shining up the rims on my wheelbarrow now! Gonna load it with Bennie Bucks and go to town at the Sack ‘n’ Save, woo hoo!

  • Bill

    I’m sure you all have heard the one about an Indian tribe making obummer a member by giving him the name Walking Eagle because of being so full of crap he can’t fly. Please listen (Click here) to Walking Eagle’s tax plan as explained by Dick Morris.
    Michael haven’t you figured it out, they are printing more money so we can pay more taxes!

    Has anyone else decided that neither party deserves their vote?

  • karen sampson

    Its just a really *********** up neo-Nazi like thing the fed and Bernanke have realized and are doing. By pumping more weightless money into the system and increasing prices on food and prices of everything they feel they will be able to get rid of unwanted poor people and less fortunate. It’s amazing how many of Hitler’s plans are in place in the western world today.

  • Uncle Sam

    That is a nasty chart.

    Bailout..QE1..QE2…..QE3!

    Long silver.

    May Your Dow Never Jones!

  • YH

    “Bernanke may believe that he is preventing the next great collapse from happening, but the truth is that what he is doing is going to make the eventual collapse far worse.”

    I would add that “Bernanke may believe that he is preventing the next great collapse from happening…”, on his watch.

  • Paul

    Actually due to the fact that this all digital$$$ the process will occur differently than Weimar.

    There is no real money going out to the public, it is going to the banks/wall street and they are putting it back into the derivatives/fractional reserve banking system.

    Eventually it will hit the public as some money begins to seep into the private sector/small and larger businesses.

    When the velocity of money goes from stagnate to a rapid pace, by maybe 2015 or so due to people seeing their money losing value and the need to get what they can and stock up now, combined with the seepage as spoken above it will then be a waterfall moment.

    Hyper-inflation of some sort will begin, and it will be interesting to see how it compares to Weimar.

    I think it will be similar in some ways but will be more different as the u.s. dollar is the reserve currency and is linked as the petrodollar.

  • michelle

    they didn’t have credit cards…how will that effect the situation?

    i think silver coins will prove to be a sound investment…

  • salvadordaly

    By the end of the decade unemployment really started to take hold in Germany as the following statistics reveal….

    September 1928 – 650,000 unemployed

    September 1929 – 1,320,000 unemployed

    September 1930 – 3,000,000 unemployed

    September 1931 – 4,350,000 unemployed

    September 1932 – 5,102,000 unemployed

    January 1933 – 6,100,000 unemployed

    Notice the timeline. This just does not just happen over night. For those of you who are waiting for that AHAA! Moment. It has already begun in the U.S. Do not think that the results of this election will change that. If you have not started to prepare, get to it!

  • http://yahoo.com richard swank

    ALL YOUR POSTS ARE OUTSTANDING, BUT THIS ONE IS BY FAR MY FAVORITE. I BELIEVE FOR THOSE WHO DON’T REMEMBER THE PAST THEY ARE DOOMED TO REPEAT IT. I READ ABOUT THIS MANY YEARS AGO AND IT HAS ALWAYS STUCK IN MY MIND. THE SAD PART IS I THINK WE WILL BE THE GERMANY OF THE 20ST CENTURY, IN THE 21ST CENTURY.GOD HELP US ALL.

  • http://blogjeffvark.wordpress.com JeffVark

    I have a stack of $50 Trillion dollar Zimbabwe notes that I give to my friends as a reminder of what will happen when unrestrained money printing occurs. The destruction of the Zimbabwe currency is a relatively recent event. (“Those that don’t learn from history are doomed to repeat it.” -George Santayana) Be smart, be safe, be prepared!

  • Jaguar34

    Prepping prepping prepping…….

  • Per Jespersen Elneff

    USA 1 del USA dollar i omløb…..
    New World Ordre USA = 12 dele dollars i omløb udenfor systemet… = 12 x False dollars
    Omveksel alle jordens valutaer til nye sedler… Der vil være et kæmpe overskud af værdiløse false penge.

  • Tappedops

    Hate to break the the bad news… but nothings going to happen till late 2016… hiperprices will go up 6% over the next 3 years…slow burn—they know were on to them…no oct sprize…no ww3…nothen… for 3 years plus… booorrring…

  • Mondobeyondo

    Those charts are downright scary. I haven’t been this scared since I saw that last Obama campaign ad. Pay attention, because this is what QE3 is going to do to the U.S. dollar. It might be time to get a passport…

    • Mondobeyondo

      I’m Mondobeyondo, and I approve this comment. Urghhhh…

      • Michael

        What are you running for Mondo?

        Michael

        • Mondobeyondo

          Definitely not for President of the U.S.! I don’t have the money. LOL!!

  • 007

    yes, QE3 is a disaster but why not profit from this collasel stupidity. We live in very challenging times. But with severe conditions, there are also severe opportunities. Here are some great stocks tailor made to profit from the disastrous consequences of QE3. If you still have a portfolio left you may want to take a look at these stocks. They make great stocking stuffers this Christmas.

    GLD, PHYS both hold gold in secure vaults So your shares will equal a certain quantity of 24k gold. . As Bernanke and the other central banks print massive amounts of money, gold, will naturally rise against the dollar and almost all other currencies. Gold has been a established currency for over ten thousand years. It can not be counterfeited and it can not be mass produced. With the ECB and the FED printing massive amounts of money, expect Gold to make a move toward $2,400 by year end. These stocks allow you to easily invest in gold and are highly liquid. You can buy and sell these stocks in an instant through the market.

    The next stock you might want to consider is GNT this invests in gold mining and other oil resource companies. As Bernanke prints money the dollar will fall and the gold mining stocks as well as oil (black gold) will rise even faster than the price of gold. Moreover, this stock pays a great 12% dividend which is disbursed monthly. This dividend will give you a chance to stay ahead of inflation as well as profit from the rising value of gold.

    The next stock tailor made to profit from QE3 is NLY. This company borrows money from the FED at a rate of .001% and then buys mortgage baked securities that have interest rates of between 4% and 9% . The kicker is that the mortgages it buys are all guaranteed by the US government. So there is no risk of the mortgages going bad. This stock pays a handsome dividend of 14%.

    As the ultimate end result of QE3 is going to be rampant inflation and civil unrest, you will want to get in on the gun sales bonanza as the public scramble to buy guns to defend their homes. And I have the stock for you. RGR- Strum Ruger is very reasonably priced. It just produced it’s one millionth weapon this year. It has no debt and massive cash reserves. It pays a respectable dividend of over 3%. Its only problem is trying to produce guns fast enough to meet the fevered pitch demand for their guns. It is also an excellent candidate for a possible short squeeze that could send the stock to Pluto. If Obama wins the election, this stock could double in only a matter of months.

    Additionally, you may want to round out your portfollio with WMT- Walmart- Walmart is an excellent recession stock to have in your portfolio. At present 10% of every retail sale in the United States goes through Walmart. Wallmart is the leading seller of firearmsand and ammunition in the U.S. Additionally, Walmart is the leading retailer in the US collecting he most food stamps, welfare payments, disability payments and social security payments of any company in the US. Walmart pays a nice 3% dividend and it’s stock has done nothing other than go up dramatically through the 2008 recession. It is an excellent stock that allows you to profit from all of the out of control government entitlement programs as well as allowing you to participate in the gun and ammunition buying craze.

    Finally you might want to round out your portfolio with GOV- This company seeks to take advantage of the bloated and wasteful federal government. It invests only in buildings which are rented to the federal or state government. Governments commit to very long leases and they don’t really care how much they pay in rent. They also rarely move. To add insult to injury they even rent to the United Nations which the US pays for. After Bernanke prints his money it is paid to this company as payment for bloated and unreasonably high rents. GOV then takes these rents and distributes them to you the shareholder with a fat dividend of over 7%. This stock price is very stable and gives you a chance to benefit from the mind numbing ridiculous government deficit spending which is bankrupting this country.

    When investing in a QE3 environment you want to invest as closely as possible in companies thatn are the closest to the printing press money or the natural bubbles which QE3 creates. I believe these stocks fit the bill to profit insanely from the insane QE3.

  • Bernie

    It’s already starting with food prices. Actually, it started with crude oil prices. All the cards are in place for a major economic meltdown.

  • FK

    I hope everyone cash out all their stocks, bonds, and any money left in the bank and buy physical gold and silver now. Stop their market manipulation. Let’s usher in and speed up the dollar collapse now because the longer we let them drag this out, the more these elites and bankers have time to steal and accumulate even more wealth. When a new monetary system comes, I don’t want these same people in controlling position or it will just be another 100 years of same thing all over again.

    • 007

      Stocks are likely safe through the election. They also generally hold up well in an inflationary environment. However, the market will collapse as soon as the FED can not print more money.

  • chiller

    I’m going to invest my money in wheelbarrow locks.

  • bpoor

    Pay down your debts ,stop buying feel good crap before the deep gloom ,gloooommmmmmmm arrives……………….

  • WarriorClass III

    Legal immigration, due to the Immigration Reform Act of 1965, has done more damage to this country than illegal immigration could ever have hoped to do. Americans now think it’s OK to replace the population of freedom loving Americans with third world collectivists, as long as it’s “legal.” Legal immigrants now out number the American population of 1965, which is why we have Obama for President. See “Alien Nation: Common Sense About America’s Immigration Disaster” by Peter Brimelow.

  • the ragged trousered philanthropist

    You never fail to amaze me with the shear volume of wonderous information you assail us with on an almost daily basis. How you find time to shop for croissants AND research and write such comprehensive articles defies comprehension.
    This particular article is one of your gems and ought to ring alarm bells for us all.
    It seems TPTB are intent on hyperinflation and MUST be aware what the consequences will be.
    You are no doubt aware that the greatest shortcoming of the human race is its failure to properly understand the exponential function.
    Dr Albert A Bartlett of the University of Colorado produced a fantastic video back in the 90’s entitled “Arithmetic Population and Energy” which clearly explained this (the exponential function) and starkly illustrates what will inevitably happen because of it.
    I have found it seminal in my thinking and it convinced me that ALL goverments must be corrupt. The laws of arithmetic are immutable and politicians MUST know this. So why do they ALL continue with this failed system of borrowing and paying compound interest, ie debts on debts.
    If I did not know better I’d call it madness.
    Were that it were only that.

  • TooLittleTooLate

    Well, The Spanish 10yr bonds are back over 6% today even with the money printing the ECB is doing… http://www.zerohedge.com/news/2012-09-26/spanish-10y-bond-yield-breaches-6-highest-3-weeks-nothing-still-fixed and, you have normal folks eating out of trash bins http://www.cnbc.com/id/49162890

    We’re on that path and, it won’t be much longer now…. Wake up the folks you can.

    I used to get so enraged at all of this… It’s amazing how jaded I’ve become… I wouldn’t call it accepting but, I’ve come to the conclusion that there is nothing I can do to change any of this… there is nothing any politician will do about any of this except make it worse and, the music is about to stop and the world’s countrys are about to have to find a chair to sit in.

    Well, buckle up because we’re about to have a rough ride really soon, I’m afraid.

  • David C.

    It just amazing how we’re still continuing in this present course with all this going on and unfortunately the media is too busy pandering and helping this (non)president in this upcoming re-election, to notice anything.

  • TooLittleTooLate

    I’ve wondered if it’s possible for us to go through a deflationary cycle first…. except for commodities and energy….. there simply isn’t demand that would cause inflation… If everyone is poor without money, prices have to go down… then as the money supply inflates, prices have to go up anyway as the entire system implodes.

    It’s so hard to predict…

    Well, I spent 400.00 at Sam’s club over the weekend and only filled one basket…. my brother in law was here when I got back and made some comments about how our pantry looked like we were prepping for Y2K…. I just said that food prices were only going up. Some folks will never get it….. He’s mad at his mother for going to the 2016 movie and agreeing with the content. I can’t even bring up our economic situation…. he would never allow himself to think his life may change soon…. Hopefully, there will be enough food for him too.

  • Mal reynolds

    Amerika does go to war to preserve the petro$.
    Iraq wanted to start trading oil for gold.
    Libya was starting to trading oil for gold.
    Iran is trading oil for gold with India, how soon until they are taken out?

  • justamom

    Thanks for doing your homework, Michael. There is a history lesson here for all us— if we can see it and act upon it. However, history teaches us that man rarely learns from history….

  • Barn cat

    Bernanke and the other people responsible for the coming hyperinflation aren’t stupid. They aren’t ignorant fools. They’re evil. They’re doing it deliberately. Their goal is to set up a one-world government. They don’t care that 250 million Americans will die because of what they’re doing. It all fits in with the UN’s Agenda 21.

  • everythingisfine

    Neither this article nor any that I have ever read explains why the excess reserves that is currently sitting in the Federal Reserve accounts will need to be released into the economy. Explain the conditions under which this becomes necessary and we will then have the basis for predicting when and how inflation will occur.

  • a cruel accountant

    We own more to the federal reserve than the currency in the economy. This will end in deflation unless the treasury starts printing physical currency.

  • Tim

    “Hyperinflation hurts the poor, the elderly and those on fixed incomes the worst.”

    Yes, but many Americans are suffering now. We’ve had near-zero interest rates for four years now. And what has that policy done to help the economy? Many elderly Americans used to rely on Social Security and the interest earnings on their life savings. Now their only real income is Social Security because earning an appreciable amount of interest income today requires a significant amount of savings–much more than most elderly Americans were able to save during their working years. I’m earning 65 basis points on the small sum that I have in a local credit union. I remember quite a few years ago, before this perpetual ZIRP nonsense, when I was earning 5% on a money market savings account. I could have almost lived off the monthly interest earnings.

    I wish I knew how much longer TPTB can keep this system going. There is no easy way out of the situation we’re in. The choices required to turn this around and get on a sustainable path would be very painful for everyone. And few politicians are willing to take that path. Most in Washington are only interested in getting reelected. But continuing on our current course will certainly lead to collapse and will be even more painful for everyone. Do we want the pain now or later? Either way it’s coming.

  • ALICE

    It buys time to get our finances in order…How much time? The sooner we take real action,the better…The more time we spend fudging our data, the worse and the longer our recovery will be…Kicking the can down the road seems to be our favorite drug for the future..

  • none

    GOOD NEWS: Micheal:
    I found a flaw in your economic theory:
    You stated:
    The truth is that quantitative easing has always been about bailing out the banks, and the hope is that this will trickle down to the folks on Main Street as well, but that never seems to happen.
    THE TRUTH: Quantitative easing can be best explained by the following.
    Ben and his bankers are having a few tax-deductible, beers at the local upscale dinning institution.
    They feel the effect of the beer and go stand in front of the urinal in the men’s bathroom.
    Ben and his banker friends can feel the trickle-down effect.

  • Selaretus

    It has been my contention that if the Gov. REALLY wanted to help Mainstreet, they should forgive Gov. insured student debt outright. I sent this suggestion to Oboob shortly after he was elected President, but neither did he pursue it or even reply to my suggestion. What he did do was give the can a giant kick down the Road of Reality by going along with bailing out the TBTF banks.God forbid he do something that might actually help US! And Misfit Mitt won’t be any better.

  • Brian W

    Well, I have firewood and toilet paper stocked up, so there’s two things that won’t gobble up my useless dollars. Oh,,,and my wheelbarrow is brand new and locked up in the barn!!!

  • SmallerGovNow

    Forget the wheelbarrows, load up on silver, gold, guns, and food while you still have the chance…

  • Martin

    I do agree that what the feds are doing is bad. But, I gather things are more complex than people are making it out to be in regards to feds printing money.

    For example, mortgage backed securities (MBSes) are backed by a house and MBSes can be used to buy something. So they are a form of cash.

    In other words, the feds are using cash to buy cash.

  • dianec

    Michael….. did you send your article to Bernanke and Obama? They might want to see what they are doing to our country.

    Oh, never mind, I’m sure they know what they are doing on purpose.

    Heaven help us.

  • RICH99

    Well it seems to be staving off the collapse here !!!

  • Rocky Bleier

    Not really comparable situations. We aren’t paying back war reparations in gold, and no invading troops are seizing our coal mines, iron and steel factories,and railways.

  • Brian

    there will be another holucaust history will repeat itself ****************

  • Thomas James

    I am always shocked to see in the supermarket a bag of chips for 4.99! What an outrage. It used to be like $2.49. Price increases in our everyday food is what’s really going to hammer us.

  • David G.

    Great article. Wonderful quotes from other works. Well done!

    I would reccomend only one change: instead of your last line, I would change it to “better keep an eye on your wheelbarrows.” Since, of course, you’re playing off the reference to what you wrote earlier, if you leave a wheelbarrow full of money out, a thief is likely to take the wheelbarrow, and leave the money…

  • Max Goldberg

    The price has been the same in the dollar

    terms for years. But it has dropped in gold three

    times in the past 5 years. Want to see what is the

    gold price at the moment? Please check my website:

    http://www.sh1ny.com

    Max Goldberg

  • http://www.justwondering.co.nz/ Alan Vallis

    “They have every intention of destroying our economy, in an effort to set up a one world banking system controlled by these very bankers.”

    On the right track, but not quite correct. There is already a one world banking system controlled by the 0.0001%.

    The Fed and most central banks are privately owned by those—like the Rothschilds—who are so asset-rich that they don’t give a toss about inflation. They screw the 99% all the time and every so often they screw the rest of the 1% as well.

    If you read Michael’s post “Where Does Money Come From?” you’ll get the picture:
    http://theeconomiccollapseblog.com/archives/where-does-money-come-from-the-giant-federal-reserve-scam-that-most-americans-do-not-understand

    For a more detailed explanation see my blog post on Paul Grignon’s animated movies:
    http://alanvallis.wordpress.com/2012/05/28/where-does-money-come-from/

  • Washington

    Published on Apr 15, 2012 Man Who Lives In Detroit’s Abandoned Packard Plant Since 2005

    Perhaps the biggest shortcoming of Detroit “ruin porn” is it inherently ignores the very real people who still live in the city. Now there’s a convergence — the amazing story of Allan Hill, the man who legally lives inside the city’s abandoned Packard Auto Plant.

    http://www.youtube.com/watch?v=4FOO0t5OEV4

  • http://www.surviving12-21-2012.blogspot.com doctor buzzsaw

    If it’s NOT the money we print, it will be the money we owe and if it’s NOT that then it will be derivatives and if it’s NOT that it will be the fiasco in Europe. One or all of these scenerios will be our end or it could be something we didn’t even think would happen like a stock market collapse. Something has our name on it and our government and the FED are all out of bullets except for printing MORE and MORE and MORE money.
    Oh and how did that work out for the Weimer Republic or Zimbabwe where a loaf of bread cost 1.6 Trillion Dollars. That’s were we are headed IF we get that far but I am betting against it…
    Tick Tock, Tick Tock, Prep hard – Perp Fast, Time is Oh Oh Oh so short!

  • DB200

    About Ben Bernanke: I heard on the radio an economist saying that Ben will go into history as the WORST central banker ever. An Michael’s story is just supporting this.

    • Mondobeyondo

      Has there ever been a good central banker?!!

      • DB200

        Of course not, the spectrum is from “bad” to “worst”. And Mr. Bernanke has a solid pole position, he really is the number one when it comes to incompetent central bankers.

        • 007

          It gets worse. Since our Fed was created in 1919, other countries loved the idea of being able to print as much money as possible. This evil entity has now spawned 32 other central banks all racing to see who can print the most money. This can not end pretty.

  • A.S.

    This is a warning sign for Jews, Christians and any other person with morals and ethics to get out of the U.S. asap! Germany was the leader in human ethics in its day of glory and within a few years turned into a tyrant no better than Stalin. If it happened in Germany, there is a high probability it will happen in the U.S. When inflation will be 50% it may be too late. In fact, if Obama wins (selected by the Bilderbergs to be exact) it will for sure be too late. So in my view the time limit is late October for all G-d fearing, moral, hard-working people, to leave the U.S. most likely indefinitely!

    • chunkeroo

      AS,

      Where are good places to relocate in your opinion?

      I am concerned this is global and worldwide unlike prior crashes which were contained. It seems like USA and all the western countries including Europe and Australia and Canada will all go down together.

      I think the world power structure will be totally reorganized – with the USA no longer a controlling superpower which constrains certain countries like russia, china, ect… the entire world will change. The USA is basically Big Brother protector to Europe/Canada/Australia. They have not had to invest adequately in their own national defenses thanks to the benevolent superpower that has had their back since WW II.

      You bring up a very interesting issue: after this crash how will the world reorganize? I think people used to the comforts and softness of modern living will be open to ANY leader who can promise to bring back the good times. The “hot house flowers” will simply be unable to cope or tolerate post-crash conditions. Of this I am absolutely certain. The least inconvenience or discomfort will send them over the edge – wait till the SHTF.

      You are quite right – Germany was probably one of the most educated, scientifically minded countries on the planet at that time and it did not prevent the ascent of der fuhrer.

      A friend yesterday who is very sunny and optimistic by nature commented she was glad she did not have any children to bring into the coming mess!

      I have a feeling you have thought this relocation through and I am very curious what conclusions you have reached.

      • 007

        The Grand Cayman Islands are becoming my favorite spot to escape to in a crisis. Also looking at other self sustaining democratic islands that are international banking centers. Also they have no income tax.

    • cachon

      Where do I go? Mexico? How about Job,Housing,relative????

      • DB200

        Yeah, go to Acapulco (well not really of course).

    • hipshotpercusion

      Santayana wrote…”Those who forget history are doomed to repeat it.” The same Central Banking scum that destroyed the German economy are in the process of doing the same to us.

      As for leaving this country, I don’t think so. I plan to stick around and fight. Its almost time to “Saddle Up and lock and load!”

    • Austin

      Food security and personal safety are the biggest concerns, so anywhere with both of those is good. I moved to Fiji 13 yrs ago and we recently bought a farm to prepare. For young people with professions, New Zealand is a good choice, but they have immigration barriers to older people- th opposite for Fiji and many other countries where Americans and others retire to- anyone with a fixed income can get a residence visa if they pay a couple of thousand dollars, and the US dollar is still very valuable- so move your funds into AUS or NZ dollars NOW.

  • david

    Inflation and hyperinflation are two different things. Hyperinflation isn’t just inflation on steroids. It occurs when at some point, the public loses confidence in the currency. There’s some critical mass that needs to be reached. Many here in the US have lost faith in the currency; just not enough of the population…yet…

    So inflation is a monetary phenomenon, and hyperinflation is a mass-psychological one.

  • Rodster

    Welcome to the wonderful world of Gary2. :P

    “Anti-cuts protests erupt on streets of Athens and Madrid”

    http://news.yahoo.com/anti-cuts-protests-erupt-streets-athens-madrid-160009097–sector.html

  • George

    A loaf of fresh baked French bread at Safeway in Alaska
    Has shrunk by 30 percent in the past 12 months

  • mikael

    If you have trubbles with visualizing this tema, the drop of vale in a corrency system, like dollar.
    Its of no relevance where, what time, even what race collor or ceed, its universal, the same idiocy is been done, time and rime again.
    Like the roling tides.

    And we never learn, why, that must be the biggest question in human history, why the fu… dont we learn anything. I have the words of an old statemetorolgist on the tube saying some decades ago, the the summ of our collective memory almost never reatches further back than 2 weeks.
    In any aspect, also wether.
    A wise man.
    And equal wisw is this video, J.Napolitanos The fall of an empire.
    A masterpeace of story telling and outlining.
    http://www.youtube.com/watch?v=TSHFWQAFINQ

    This sceem is the main problem and will eventualy drive us down the drain, conspiracy teories, well fu… when the wall slams you in the face, dont forgett that you where warned, a empire bulided and maintained by perpetual wars and plundering nabos, mat be glorious to behold, a military miths so bigg, like the greates empire of them all, outclassing anything else thue mans history, the mongols, lasted just some generations
    before it eventualy imploded.

    And right now, the USA have pased sustaiability, the debth is everlasting, do you gett it, america will never be able to pay it back.
    Never.
    And the debth is even rising, day by day.

    So all the rest of us have to do is to wait for the to lines to cross, and the USA will end up as Spain, next years, i gess, the foodriost beginn, and the it will automaticly escalate into a grimmer perspective.
    Look to Spain, the scrappbook for the future of the USA.

    wake up

    peace

  • Washington

    A Corporatist Chief Justice: The Role of John Roberts in Citzens United [Part 1] JOHN ROBERTS JULY 30, 2012 BY: AARON PHILLIPS

    http://www.examiner.com/article/a-corporatist-chief-justice-the-role-of-john-roberts-citzens-united-part-1

  • McKinley Morganfield

    “That’s exactly what they want to happen, these men are not foolish nor stupid, they are clever, deceitful and all part of a very powerful elite banking cartel.
    They have every intention of destroying our economy, in an effort to set up a one world banking system controlled by these very bankers….”

    I predict the have started a fire they can not put out. Here is the USA there are too many people with hundreds of millions of guns. Their plans are merely the work of mice and (greedy) men.

    • 007

      I agree. It is so easy to see a worldwide economic crash and crisis. Then the villains that caused the disaster will rush to the rescue. They will say our problem is we don’t have a world central bank and a one world currency. That will be the game of the century, getting the best conversion to the one world currency.

  • john jackson

    Once again, Michael has given us another example of the road we are heading down and why you must be prepared…

    http://theelevationgroup.net/presentation/register.php?a_aid=a6affed9&a_bid=e6b01db8

  • Gay Veteran

    off topic but I went to Bass Pro this past Saturday to buy 9mm ammo and they were almost out

    today I saw a guy in a Homeland Security (the original sounded better in German) stormtrooper uniform with a bomb sniffing dog in front of the University of Baltimore. WTH???

  • Richard

    What am I doing?
    I’m breathing.
    Why am I breathing?
    To keep alive.
    Yes, but what am I specifically doing at this moment?
    I’m writing to you, Michael, asking you, PLEASE, to stop the silly questions.

    Wouldn’t it be much better – and more powerful – to say: Inasmuch as I’m breathing to stay alive, I’m also writing to you asking you to stop the babytalk and just state your equally powerful message.

    Even the title of your article yesterday was a silly question. Don’t worry, we don’t need our interest piqued and jump-started by having you ask our questions for us. It’s condescending and quite unnecessary.

    Otherwise, another great article, as usual.

  • http://Nowebsite William

    Nothing in the above blog is exagerated about Weimar. I wasn’t born then, but my grandfather told me often how he lost the fruites of 25 years of hard work: He pioneered the growing of white asparagus in Germany, which was back-breaking work, got paid in rolls of Gold Marks, gave then to his bank and got paper receipts, soon to be worthless. Had he kept the rolls of Gold Marks he would have been fine.
    Will we in North America resist the siren call of someone who says he can save us?
    The Germans couldn’t resist Hitler’s siren call! Hail John Maynard Keynes and his witchcraft that got us started.
    William

  • Mad Max

    “What luck for rulers that men do not think!” [HITLER]

    Our government is just a reflection of the ignorant people that put up with them. Kind of like NAZI Germany. The people were stupid to follow Hitler and they paid dearly for it. You deserve what you get, so stop complaining, you’ve earned it.

    FIGHT THE CAUSE – NOT THE SYMPTOM
    OsiXs (Common Sense 3.1)

  • http://Nowebsite William

    Typographical error correction to my above comment: That should be Fruits of his Labor, not fruites.
    Sorry
    William in Canada.

  • Ben Melman

    James Sinclair’s ‘Mineset” had a link to this article. Very interesting.

    Must have been 8-10 years ago when I read Sinclair comparing the US economy to the Weimar Rebublic, and I thought he was crazy. Now it is impossible not to see. The only issue we have is how much time before the collapse occurs?

    What Philadelphia Fed President Charles Plosser could have added in his remarks is that the Fed has been printing money for over 10 years now – all the while unemployment continues to rise. The only thing that’s changed in that time is how the government jilts the statistics to show that unemplyment is badm but not that bad at 8-something%. Sorry, they’re not counting those that have fallen off the roles. The most conservative stat I’ve read on unemployment has it at 16%. And most of the country is living off the government either through housing assistance, food stamps and right through to borrowing money for college at 90% of the people will never pay back.

    64 years-old and I’d never even imagined that the US could be what it is today.

  • http://infowars.com cletus van damme

    So simply put, we need WW3 to get us out of the hole. It makes perfect sense, history always repeats itself.

    • Kevin2

      Well it’s doubtful that WW3 could be contained with the use of conventional weapons. Einstein (a pretty bright guy) said, “If WW3 is fought with nuclear weapons, WW4 will be fought with sticks and stones”.

      TPTB have been attempting to stop WW3. Personally I think their micro-management has increased instability (probably by choice) and therefore increased the probability of what they feared. The world has been under a lot of control for a long time. The power elite are loosing their grip. Like all change it’s a two edge sword. Chaos is not always a good alternative to control even if it’s unwanted.

      • MWD78

        WWII only pulled us out of the last Depression because we still had a manufacturing base domestically. Now with all of our manufacturing outsourced off-shore, look at what over a decade of perpetual warfare has already begotten us.

  • Xander cross

    Interesting.

  • http://theeconomiccollapse shabba

    Can someone tell me what was the percentage of money printed in weimar compared to their money base.

  • http://theeconomiccollapse shabba

    in 1921

  • dmitry

    I was looking for my wheelbarrow, but I couldn’t find it. I’ll use a small cart instead ;=).

    Michael,

    Thanks for sharing the Financial German history. I never heard it since my school days.

  • Gary2

    Michael–we can Never be like weimer germany. To even suggest this is a stunning degree of ignorance.

    The USA is and never can be like that and to suggest this is not reality.

    I know it makes the right wing nuts giddy when you throw them this red meat but it is in no way reality

    • Alvin

      and just what the hell do you base that on.
      The average 1930’s German was educated and hard working for that time frame and a hell of a lot more moral. The typical Democrap has no problem in killing 50 million babies because they don’t want to be responsible for their actions. The typical democrap in the past 4 years has run up trillions of dollars in debts because they are either too lazy or stupid to go out and work, leaving the rest of us to clean up the mess. I have no doubt that a society that is willing to kill 50 millions babies will now start killing older adults by declining to give them healthcare. It time that people like you get up out of the wagon and start helping to pull the wagon.

      • Paul

        Wow, all that QE that started under Bush. Gone! Never happened. I’m glad though that you are concerned for (American) babies. Maybe you might spare a thought for all the babies and children killed in America’s depredations in other countries. You may even find this infanticide was something of a bipartisan affair politically.

      • Gary2

        I base this on the fact that I have a brain and am capable of critical thinking something that is sorely lacking on this site by many posters including Michael at times.

        all you need to do it think about why we can never be like the 1920’s Germany and you will figure it out on your own.

        • HecatesMoon

          Gary2, so, you think we will pull out of this o.k.? I know things aren’t exactly the same, but could we not end up in a similar situation? Or like Greece or Spain?

          • HecatesMoon

            They are putting locks on garbage cans in at least one Spanish city now to keep people from raiding trash cans for food. Ugh…how awful. They say it is a health concern.
            I can only believe it would truly be one of two things. Outright greed– you can’t have what you didn’t pay for! Or true, utter stupidity. Those making the rule have never truly been hungry.
            No decent heart would deny these people if they are so reduced. They would let them survive and feed themselves by whatever means so long as no crime were involved.
            So sad…
            I thought this was a good point to rant about it…

        • John Tlag

          Gary2, if you have an opinion to contribute, back it up. Telling someone “the answer should be obvious if they think about it” is bad form. The idea here is to exchange ideas. Support your assertion with some facts.

      • frannie fargo

        yes, romney wants to end the “entitlements” to older americans (social security, medicare, etc.) so yes, once they are in they will not only be killing babies but starving and maiming old people too.

    • 007

      Amazing counter argument.” This won’t happen to us. You are just ignorant, evil or stupid to suggest it”. Spoken like a true radical left wing socialist. Grow up.

    • 98Bravo

      Gary2, Please explain why this will never happen? Why and how are we immune from the rules of economics and mathematics? Please give us the reason behind your thinking.

  • JustanOguy

    I remember being a kid when my parents bought some antique furniture in Germany. Stashed away in some hidden compartments (very common for furniture made in that era to have hidden compartments) was a couple of hundred billion in these Deutsche Marks… I thought we had struck it rich. Lol.. I have one of the $5 Biilion Deutsche Marks framed above my desk.

    Reading that excerpt from Paper Money by Adam Smith (George Goodman) through the Pearl Goodman link you provided was pretty enlightening on German Life while it was happening… and all of the very similar things taking place today if you just look around.

    Copper thefts, gas siphoning thefts, people complaining about not making enough to live, etc, etc.

    I’ll have to get that book and read it. Many of us know about the Weimar Republic but most of us don’t know about the daily life as it actually took place.

    Just wanted to say Thanks for the entertaining read. I just returned from the grocery store to pick up some milk and some other miscellaneous items that were on sale so the timing was perfect. Spent $20 for enough to last a day or two..

    And that was with the majority of the items being on sale.

    Passed on the slice of German Chocolate Cake for $2.99 a slice.. and I was craving it. But I used to be able to get it for $1 a slice about a year or two ago so $2.99 is a little hard to accept.

    Thanks Again..

  • Old Man

    Will QE3 work? Of course it will. It will work “100%”.

    Consider the benefits:
    1) The amount issued is tiny compared to everything. It will be easily absorbed without being noticed. Indeed, the more QE3 money is issued, the less it will be noticed.

    2) Every QE3 dollar issued is one less dollar debt to be repaid. Isn’t that wonderful? Hell, even Social Security will have its future restored.

    3) By the time the next president is sworn into office, lots of new money will be available for pork. Just in time for stimulus. As to stimulating who, that depends on who is the president. But that’s just details. The politicians will be stimulated for sure.

    4) All that new bucks will get circulated in the world, and used by foreigners. Who will get suckered again. And if they play hard ball, the Marines are ready for action! They are well trained in fighting foreign wars.

    5) What about inflation? There will be minor inflation, which is good. See, such controlled amount of inflation, superbly managed by the Fed, will make US labor more attractive because labor cost will be lower. Outsourced jobs will return. Chinese companies might even outsource some work to USA. For example, they just might send their brand new aircraft carrier to the US for outfitting with the latest goodies such as F-18 Super Hornet. Even a nice paint job. This is all due to QE3.

    6) Finally and most importantly, QE3 is critical to the Fed’s very survival. See, it was the Fed amazing policies that caused a bit of a hiccup in the US economy. They need to fix this, restore faith. And prove Einstein’s quote utterly wrong. What quote? He said some nonsense about those who created problems cannot be the one who fix them.

    But what about the big fear of a Wiemar Republic style inflation? Have no fear my friend. See America is not post-WW1 Germany. The folks in charge here are much smarter, and America actually won 2 wars recently. Wiemar lost a big war and the winners all ganged up on it. Screwed the poor country to the max. Nobody dares to gang up on America I can tell you that. Which is why the wise people at the Fed dares to QE this and QE that. Whatever country dares to abandon the dollar will get the Exceptional treatment.

    • Bill

      Old Man,

      I understand you’re being sarcastically witty, but I’d like to add to your “benefits” with my own observations.

      Consider the misconceptions –

      1) The amount issued will barely be felt by the average American because it’ll go directly into the balance sheets of the top 1%. By purchasing Agency MBS’s, it’ll lower their interest rates and increase market values. The increase in values will make them gitty!
      2) I’m not understanding your calculus here. By increasing the Fed’s balance sheet, how will that lower the debt? What it will do is make it easier to pay down the debt using deflated dollars, but that’s what the Weimar did and we all know how THAT turned out.
      3) Yes, all that money will be available for another round of stimulus. All those deflated dollars flooding the economy…
      4) Perhaps foreigners will get suckered again or perhaps they’ll flip the bird at the dollar and form their own currency. When what do we do? Send in the Marines to force them to use our worthless currency?
      5) Hyperinflation is already here, it’s just stuck right now in the balance sheets of the mega banks. All that fiat money is building up the stock and bond markets while interest rates keep their present values at near zero. As banks start looking elsewhere for “alpha” in their portfolios, they’ll start pushing some of that money into the real economy, and then watch out!
      6) The Fed is already beyond survival. Emperor Ben is doing all he can to convince us otherwise but it’s already too late.

      We’re not smarter and the last four conflicts we were involved in were either stalemates or outright losses. The rest of the world will be more than willing to gang up on America once they think we’re too weak to defend ourselves. Just look at what happens to the schoolyard bully once he’s unable to torment the weaker kids on the playground.

  • WarrenBuffet

    Germany just didn’t want to pay off its WWI reparations, thats why it printed all that money- to crush the can.
    Unless theres a black swan, US can still kick the can for years.

  • Mohammed Sobhan

    What we can do about it ? What do you suggest for the US citizens. We should try to live better as the all golden days are gone. Our objective should be to live in peace in mind with almost everything. Does anyone believe that as per the holy Quran the day of judgement is near. We see sign of the end of the Universe and we must prepare for the last day in this universe.

    Please suggest what can we do now .

    Thanks.

  • Pastor Glenn

    Frankly, I’ve been expecting this to happen since 1980, when I became a Libertarian (later I moved on to the US Taxpayer Party, which is much more Christ-oriented but otherwise broadly similar). The US Taxpayer Party is now known as the Constitution Party.

    Anyway, when Reagan stole the Libertarian’s thunder in the Presidential election and claimed he’d cut the deficit, I was suspicious. Unfortunately, I was right – and Reagan doubled our $1 trillion deficit in about 4 years. It’d taken 204 years to get $1 trillion into debt, as a nation; and four more to double it. I was disgusted.

    Now we are adding over a trillion per year on a $16 trillion debt, and the Con-gress hasn’t passed a budget (as legally required) in years. Plus the Fed (which we all know actually ‘owns’ the vast majority of the governments of the world, and especially the US ‘government by and for the people’ – NOT) hasn’t published M3 numbers in years.

    This video will tell you everything you need to know in 30 seconds. Watch the face of the man on the right.

    http://www.youtube.com/watch?v=-_N0Cwg5iN4

    The gentleman on the right is Austan Goolsbee and he was on Obama’s team, until he left in 2011. You have to wonder if the scales started to fall off his eyes when he sat next to the ex-Fed Reserve Chairman Alan Greenspan in this interview.

    • Tim

      I was interested in the Constitution Party years ago. I even met their candidate for the 2004 presidential election–a very charismatic and bright man and a gifted speaker. I even visited the church he and his family attended (in Maryland). Sadly, he didn’t have his home in order. His sons were miserable and couldn’t wait for the church service to be over. They were also rude. A few years later, the man’s wife divorced him. And it’s not hard to see why. He was a little too friendly with other women, including one of my own family members. I’ll just leave it at that.

    • http://www.facebook.com/craig.nim Craig Nim

      While Reagan did increase the debt, remember he was at war with the Soviet Union … and won. War is costly. Always.

  • blueridgeviews

    The Wiemar Republic was printing money when no one else was.

    Today is very different. All of the world’s central banks are printing money.

    Is this the prelude to a long envisioned (central bankers dream) one world currency? Government?

    • Paul

      I suspect this has been the intention all along.

  • bobbobbob

    more lies more stupidd talkk
    REMEMBER the elderly r racists but they r not stupid. that jerkromnney wants to voucherizee medicare. thecubanos in fla. r against that. u loose theywill vote4the president. learn how to think if u can

    • GSOB

      learn how to write first

  • Panto

    !!!

  • El Pollo de Oro

    When the American dollar goes into cardiac arrest and inflation soars, millions of Americans who are already struggling will find their lives going from bad to worse. All that misery will bring with it considerable violence and unrest. And speak of unrest…….

    Mas disturbios y mas violencia en España:

    http://www.youtube.com/watch?v=2YH5Hwbshg4

    http://www.youtube.com/watch?v=KUey7FkdfFM

    Take a good look at these videos of the unrest in Madrid because that’s what The Banana Republic of America will look like soon. It won’t be pretty.

    In the words of Gerald Celente, when people lose everything and have nothing left to lose, they lose it. And when the money stops flowing down to the man on the street, the blood begins flowing in the streets.

  • http://southsoundphoto.com pabba

    The US government doesn’t control paper currency but they could mint a few trillion dollar coins, hand them to the feds and take back control of the money supply. Problem solved.
    It could happen, we just need to give the bankers the same social stigma as smokers – everyone will vote against them out of disgust. That and quit watching television.

  • Nj Moran

    Does this mean We will have another Nazi Germany? I guess that’s what the new world order will look like.

  • Mara Singh

    Another classic example of “Biflation”.

  • Canadian Max

    Chicken little could prove the sky was falling, he had a lump on his head. If your cash is useless, package it up nicely and send it to me.

  • William

    Readers should carefully research the fate of the Weimer Republic, Argentina about 12 years ago, and Zimbabwe more recently. Since the land of the free and brave no longer operates under the rule of law, any notion of “American exceptionalism”, which will save the day, is wrong. Nothing will stop the collapse….the question is, will YOU survive?? If you believe the official US government report on the events of 911, you will likely NOT survive…..because you have no brain!

  • Washington

    September 27, 2012 – The truth is, she’s right, at least about the U.S. government giving away cell phones. We’re going broke as a nation, yet picking up the tab for millions of Americans’ cell phone bills.

    http://www.youtube.com/watch?v=tpAOwJvTOio&feature=player_embedded

  • http://kitco rick forman

    now is the time to vote republican……at least there is less of a chance of them taking our guns away……we’re gonna need ‘em..

    • Kevin2

      For the most part that is about the only difference in the two party’s platforms regardless of their statements for public consumption. Both signed on in majority percentages to both Free Trade (on every occasion that mattered) and the deregulation of and lack of enforcement upon the financial industry.

      Both party’s occupy glass houses of practically the same design paid for by the same people while throwing stones at one another’s domain. Even more pathetic is they are built out of two way mirrors allowing no one to truly look in and both complain about the others lack of transparency.

    • Paul

      Tweedledee time huh?

  • Mondobeyondo

    What caused the Weimar collapse in the first place?

    Well… (once again, stretching my memory back to those boring high school history classes in 1980 and 1981) – one of the conditions of the peace treaty that ended World War 1, was the payment of reparations to the victors, the Allies (England, France, the U.S.)

    Germany didn’t have the money to pay reparations. So they printed the money instead. (Sound familiar??) This caused the value of the Deutschmark to first plunge, then plummet, then crash through the cellar floor. The German people were angry, to say the least. And, just as in any crisis, they started to look for scapegoats.

    Adolf Hitler was jailed for a time, wrote a book called “Mein Kampf” while in prison, and began his political career with the Beer Hall Putsch in Munich….and we all know the rest.

    Which begs the question, “Why didn’t something similar happen in Argentina and Zimbabwe? Didn’t both countries have similar economic collapses?” Well, even though they did had massive economic crashes, and both have vast material and agricultural resources, neither is a major world power, and neither has any global significance. Germany did, and still does even to this day.
    —————————
    An excellent summary of the events in Germany between the end of World War I and World War II is William L. Shirer’s “The Rise and Fall of the Third Reich”. I would highly recommend it to anyone interested in those times, and what led up to them. It’s a long read (like Tolstoy’s “War and Peace”, but definitely worth your time.)

  • Washington

    As Charlie Daniels has stated, “Something’s wrong and we all know it.”

    http://beholdapalehorse.tv/

  • Awake

    Debt monetizing is what the Weimars did, and now we are doing it. I hope this does not lead to the same chain of events. History never repeats itself, but it often does rhyme. I recommend anyone reading this to learn and develop true self reliance. This is somthing that cannot be bought, only learned. It can lead to confidence and bring clear thoughts when big decisions must be made. I pray for the courage to change what I can, accept what I cannot and the wisdom to know the difference.

  • Dezmo

    Mike,
    Anyone who has studied economy-101 knows that Hyperinflation is an effect of certain thing, certain stupid thing, done by the economic decision-maker. I wonder if the money-printing frenzy happening now is made deliberately, because I seriously don’t think that Helicopter-Ben and those sitting next to him are idiots. Or maybe they are? Let me know what you think.

    Thanks

  • http://banksandbubbles.com/ Justin

    Michael is correct and if you read Bernanke’s QE3 statement he tells you exactly where he’s taking us: “the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.” translation: THERE IS NO TURNING BACK! now is the time to prepare: “FOOD, GOLD, SILVER, SAFETY, PRAYER.”

  • Washington

    Countdown to 2012 – The Clueless Generation

    http://www.youtube.com/watch?v=50WHiYmOqTQ&feature=relmfu

  • Washington

    Editorial: Operation Screw Wednesday, September 26, 2012 – by Peter Schiff

    With the Fed decision and press conference [Sept. 13], Chairman Ben Bernanke finally and decisively laid his cards on the table. And confirming what I have been saying for many years, all he was holding was more of the same snake oil and bluster. Going further than he has ever gone before, he made it clear that he will be permanently binding the American economy to a losing strategy. As a result, September 13, 2012 may one day be regarded as the day America finally threw in the economic towel.

    http://www.thedailybell.com/4351/Peter-Schiff-Operation-Screw

  • Doug Green

    Never commented on one of these before, but I have to on this one.

    I do the ordering for the grocery department at a grocery store. I.E. I am the guy that orders in your Cheerios and tomato juice and sugar and flour, etc. Package sizes on main items like cereal have been going down nonstop, every couple months for the past year. Now they’re down to about half of what they were in 2011.

    What this means is: you are paying $3.99 for a 10.7 oz. box of frosted flakes, compared to $3.99 for a 20 oz. box of frosted flakes 2 years ago.

    My point is, consumers don’t really notice the price increase on food as much because manufacturers GRADUALLY decrease the amount of food in the package.

    • Michael

      That is a great point Doug. Thank you for sharing that insider viewpoint. :)

      Michael

    • kissitgoodbye

      fast food chains are doing the same thing.

  • don

    Nothing will change until the congress stops taking money from the FED. The FED cannot print money except to cover debt. Read G. Edward’s book the Creature from Jekyll Island. This deal was set up in 1910 and was given birth in 1913. When the boys in DC needed help they all jumped into bed. That was the beginning of ridding our currency of being backed by precious metals. When Nixon pulled the plug to pay for Veitnam, the Fed had the golden check book. It’s about Big Banks and interest revenues and taxing the little guy via inflation. The real taxation withour representation on steriods.

  • The Day After

    I suggest that we are at the point that everyone really needs to watch the movie The Day After. ABC produced this movie in the 80 s when things were still on edge with the soviets and the Germans. Over 30 million watched the movie and it was one of the highest watched made for tv movies ever. It presented a nuclear holocaust in a a real way, that was frightening. One of the comments above that Einstein used was in that movie. Freaky! More to the point about this was there was an ex KGB defector that said the Soviets had a plan in place but never executed called Operation Ryan to take the US down. Who is Romneys running mate for VP. Paul Ryan? If you people don’t believe we have been infiltrated at the highest levels of government you are sadly Nieve. They have got us boxed in at every corner and they know it. Reagan said after the movie it left him Depressed. The next day he signed a treaty of reducing nuclear warheads with Russia. Folks you better get ready, this isn’t going to end pretty. this is an enemy that cannot be defeated unless there is a 100 million or more of us taking things back at the state level first. 1 to 10 people doing it is suicide, 100 million or more is what’s needed to take our country back! be the change!

  • http://socialrebirth.org Stuart Dobson

    Excuse my ignorance, but wouldn’t hyper inflation be great news for those with mortgages? Your wages would have to go up, but your mortgage costs would stay the same, meaning you could pay off your house quicker. Those without a mortgage would struggle to get one of course as the value of houses would go through the roof.

    Or am I completely off base?

    • MamaMia!

      @Stuart

      I am wondering the same too. If you own a mortgage and hyperinflation happens, what will happen to your mortgage? There are 2 components of the mortgage and they are the principal and the interest.

      This is my thought.

      If hyperinflation happens, the Fed wants to increase interest rate to fight, or control at least, the hyperinflation. That means our mortgage rate will increase too. Consequently, the mortgage’s interest components will increase dramatically. So, if you still have a job (remember, during hyperinflation, most probably you will lose your job as businesses struggle to be alive) and some savings during the hyperinflation, you can still service the interest components. If you are able and willing to pay the high interest rate until the Fed is able to tackle the hyperinflation (lowering interest rate), then you can keep the house. There are 2 ways to lose the house. First is the bank will take your house by force. This happens when the value of the house is lower than the value of the mortgage, which happens lately in USA. Secondly, you can sell the house yourself and pay off the mortgage. You will be lucky if you have anything left at this stage because during hyperinflation, many people will go bankrupt and there is so much assets selling thus depressing the house price.

      Your mortgage principal component will still be the same.

      Hopefully hyperinflation will not happen.

    • Jared

      It all depends on the type, fixed rate mortgage vs adjustable.

      • http://www.facebook.com/craig.nim Craig Nim

        However, aren’t adjustable rates also regulated by how quickly the interest rate can increase? Thus, since inflation would have no restrictions on its explosive growth, then wouldn’t it vastly surpass the legislated limit on the growth of adjustable rates?

  • comnenus

    There was a wealthy industrialist named Hugo Stinnes who used this hyperinflation to his advantage, and ended up with 6 billion US dollars (when John Rockefeller I had at most 2 billion).

    Stinnes owned more than 600 newspapers and 100 power plants, among others.

    When he died his empire supposely broke up, but the money was never found. His desdendants are reported to own a bunch of islands on the Baltic Coast to this day.

    • MamaMia!

      There is a profile about Hugo Stinnes in Wikipedia. It is described that he took advantage of hyperinflation by leveraging and buying hard foreign currency.

      I guess this is the more logical choice rather than buying a house with a mortgage. To take advantage of the hyperinflation, you need to buy foreign currency.

      As with mortgage, leveraging by borrowing in the local currency has 2 components: the interest and principal. During hyperinflation, the interest part of the loan will increase dramatically by following the hyperinflation. Meanwhile the principal will still be the same numerically.

      Unlike a mortgage, a foreign hard currency in the bank account will get income from the interest. You can use this income to pay the interest of the local currency loan. Because of hyperinflation, the foreign currency will gain so much value against the local currency. Therefore, the interest from the foreign currency might be able to pay all the interest in the local currency loan. At the same time, paying back the principal will be like buying peanuts on the street.

      You cannot say the same if you get a mortgage for a house because the house is in the same local currency.

  • raffaro

    Allot of people are awake; they’re buying guns like crazy! @30% over cost and around 40% more than six years ago.

    An AR-15 in 1994 went for about $450.00. And less if your buddy was a class III firearms licensed dealer.

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