[ExI] Inflation graph

[John Clark]

On Sat, Nov 30, 2013 at 7:43 AM, Mirco Romanato <painlord2k at libero.it>wrote:

> The printing presses went warp speed even in WWI Germany (to finance the
> war) but the prices do not skyrocket in 1914 nor in 1918 nor in 1920. They
> exploded in the following years.
>

You are incorrect. Inflation exploded in Germany because in June 1921 the
first gargantuan payment for war reparations became due. This first payment
was for 132 billion gold-marks, that means it had to be payed in gold or a
hard foreign currency. In June 1921 there was only 50 billion gold-marks in
the entire country. It was only then that the Weimar Republic put the
printing presses into overdrive, they used paper-marks to buy foreign
currency to pay the reparations, and the mark became virtually worthless
soon after. That's terrible economic policy but given the circumstances I
don't see how they had any other choice.

> Now, with China signaling the end of US bond buying (they will not
> increase and probably will not roll over all the T-bonds they have) who
> will buy the bonds?


The answer is just about everybody is eager to buy US bonds, even long term
bonds at historically low interest rates. But if you believe you're smarter
than the free market and can see the future more clearly you should short
bonds or buy gold; true if you followed that strategy 3 years ago you'd be
broke today, but who knows someday it might work.


> > By the way, food prices are rising around the world


Thanks to environmentalists and their idiotic policy of turning food into
fuel.

  John K Clark
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