Those who fear for democracy's future should remember Roosevelt's 1944 words: "People who are hungry and out of a job are the stuff of which dictatorships are made"
Germany's hyperinflation was due to foreign currency debts forced on Germany by the Versailles Treaty, true.
However, this doesn't mean that inflation is not ever a problem.
I can't speak for Canada, but for the US - the problem with inflation is that you cannot have stunted blue collar wages AND inflation. US wages during Biden's term are up comparably with increases during Trump's term, but real US wages during Biden's term are negative due to inflation.
Advocating high inflation plus low interest rates is far more a subsidy to the wealthier sections of a nation than anything else: these classes are most able to take on debt which is eroded by inflation and are also able to get disproportionate income increases whether by salary or income from investments.
I also note that low interest rate regimes penalize retirees who are dependent on fixed income.
The low interest rate regimes of the past decade plus are an anomaly in history; longer term trends conform far closer to interest rates at levels more like the present one.
except for the central bank role, which is not the cause of the inflation.
The Wiemar hyperinflation was caused by crippling war reparations (in gold which they did not have) and invasion of the industrial Ruhr valley. Not by "printing money". The German CB had to issue more currency so wages could keep up with the price level (causes by the reparations) so people did not starve. The printing money was an effect, not cause.
Thanks - to be clear, both my article and the one you've attached are drawing heavily from the same source - Schact, who was the finance official who actually solved the issue and ended Hyperinflation.
Schact and IMF make it clear that the hyperinflation was caused both by the demands for reparation, but also because of another aspect of MMT, recognized by the Bank of England, which is that private institutions can also play a role in money creation.
Schact makes it clear that it wasn't central bank as a public entity printing money, but that the central bank had been privatized and that private banks were extending credit that was convertible into marks, and that credit was even being extended to speculators to short the currency.
Another excellent article. Thank you for this. I'm reading a good article by Branko Milanovic, a professor at the London School of Economics.
It's in Foreign Affairs: the article is called: The Clash of Capitalisms.
Germany's hyperinflation was due to foreign currency debts forced on Germany by the Versailles Treaty, true.
However, this doesn't mean that inflation is not ever a problem.
I can't speak for Canada, but for the US - the problem with inflation is that you cannot have stunted blue collar wages AND inflation. US wages during Biden's term are up comparably with increases during Trump's term, but real US wages during Biden's term are negative due to inflation.
Advocating high inflation plus low interest rates is far more a subsidy to the wealthier sections of a nation than anything else: these classes are most able to take on debt which is eroded by inflation and are also able to get disproportionate income increases whether by salary or income from investments.
I also note that low interest rate regimes penalize retirees who are dependent on fixed income.
The low interest rate regimes of the past decade plus are an anomaly in history; longer term trends conform far closer to interest rates at levels more like the present one.
No hyperinflation in known history has ever been caused by "printing money". Your own article gets the history mostly correct - https://dougaldlamont.substack.com/p/the-history-of-hyperinflation-in
except for the central bank role, which is not the cause of the inflation.
The Wiemar hyperinflation was caused by crippling war reparations (in gold which they did not have) and invasion of the industrial Ruhr valley. Not by "printing money". The German CB had to issue more currency so wages could keep up with the price level (causes by the reparations) so people did not starve. The printing money was an effect, not cause.
https://gimms.org.uk/2020/11/14/weimar-republic-hyperinflation-through-a-modern-monetary-theory-lens/
Thanks - to be clear, both my article and the one you've attached are drawing heavily from the same source - Schact, who was the finance official who actually solved the issue and ended Hyperinflation.
Schact and IMF make it clear that the hyperinflation was caused both by the demands for reparation, but also because of another aspect of MMT, recognized by the Bank of England, which is that private institutions can also play a role in money creation.
Schact makes it clear that it wasn't central bank as a public entity printing money, but that the central bank had been privatized and that private banks were extending credit that was convertible into marks, and that credit was even being extended to speculators to short the currency.