Customer Reviews: When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany
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on November 20, 2010
This book tells the story of the hyperinflation in Weimar Germany and its aftermath (1919-1926) and, to some extent, the ensuing rise of Hitler's Nazi Germany. It is a story which is so complex and convoluted that it takes a historian to even begin to do it justice. Fortunately, this book's author is not only an accomplished historian, well versed in his subject, but also a gifted writer. The result is a remarkable book about an almost indescribable and incomprehensible period in the world's history.

So, if you've ever wondered about the hyperinflation in Germany following the Great War (WWI), and by extension what the REAL consequences of inflation, hyperinflation, deflation and depression might be, this is the book you've been looking for. In fact, I've only read one other book which even comes close; that being `The Fiat Money Inflation in France: How It Came, What it Brought, and How It Ended' by Andrew Dickson White. But this book is much more timely, much broader in scope, much more comprehensive, and much easier to relate to our more modern times.

In it, you'll learn a lot and find the answers to many puzzling questions. Among them: what caused the inflation, what were its impacts, and why it was allowed to continue; which groups and social classes fared the best, which the worst, and why; how the inflation resulted in the redistribution of wealth; what happened to landlords, shop owners, government employees, members of unions, free workers, and pensioners, as well as the middle-class; what the man or woman on the street had to do simply to survive; who prospered, who lost everything, and why; what the government did and didn't do and what the impacts were on people at all social levels, and on industry; how the hyperinflation was finally ended, why the resulting deflation and depression was worse in many ways, and why; and what those living through the deflation/depression period had then to do in order to survive and, in some cases, prosper.

There is also much anecdotal evidence as to just how much misery both inflation and deflation can cause. For example: the well dressed elderly man who couldn't afford two cents (American money) for a bag of apples; the little old lady who supported herself by selling her crucifix chain one tiny gold link at a tme; the foreign students who bought rows of houses out of their allowance; the substitution of paste-board coffins for wooden ones; the life insurance policies that eventually were worth less than their annual premiums; the banks that did away with smaller savings accounts because the paper required to book them was worth more that the money in the accounts; the man who said it was better to have a prostitute in the house than the corpse of a dead baby; the beggars who, in October 1923, purportedly wouldn't accept anything smaller than a one million mark note; and finally, that even with the first "billiard" [a thousand million million] and five billiard notes being printed in November 1923, people still clamored for more.

Apart from the Weimar Republic: This book is essentially a case study in inflation and its aftermath which should be of interest to anyone contemplating or concerned about the current state of America's, and the world's economic future, and the direction America is headed. In reading it, it is well to keep in mind what Gunter Schmolders articulates (pg. 248), "With inflation alone can a government extinguish debt without repayment, or wage war and engage in other non-productive activities on a large scale: it is still not recognized as a tax by the tax-payer."

In any event, if you do read this book, and if you are anything like me: You'll likely conclude, as I did, that everyone talks about inflation, but no one, especially the politicians who cause it, really knows what they are dealing with or what the consequences may be.
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on December 18, 2002
This is a frightening account of the German, Austrian and Hungarian hyperinflations of the early 1920's. It includes blow-by-blow accounts by diplomats, bankers, and ordinary folk who survived the total annihilation of their currencies. Fergusson has done an outstanding job of documentation and must have spent thousands of hours in archives. It is indeed a shame that this book is out-of-print.
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TOP 500 REVIEWERVINE VOICEon February 13, 2011
This often difficult-to-read narrative describes the Hyperinflation of the Weimer Republic. The author used archived sources - newspapers and books - to recount the order of events. Personal interest stories are not included. Certain ideas stand out. This could be instructive in coming years.

Below I list salient points from When Money Dies:
* The inflationary period was for 10 years, the last 4 being extreme (the Weimer mark finally died in 1923). The end of the inflation was sudden.
* Government and banks continually reassured the population the worst was over, and people usually were encouraged as a result.
* To service debt, government enacted many new taxes, even some unusual taxes. But tax collection wasn't very successful and tax evasion became socially acceptable.
* Logically, the enormous government debt could only be paid back through inflation. Nevertheless, people were not prepared for hyperinflation.
* Most Germans had not grasped the draconian terms of the Treaty of Versailles at the time it was agreed upon.
* Food and fuel prices went up faster than those of clothing and other goods.
* The middle class in particular was wiped out.
* Laws were enacted against hoarding fuel and food. Shops were often closed and had reduced hours. For the sake of survival, everybody broke laws concerning hoarding, black markets and taxation.
* The German and Austrian people were long-suffering. They believed in their currency until almost the end, and they were constantly saying the worst was over when in fact things only got worse and worse.
* Foreigners descended on the land, buying up and exporting anything of value that could be moved. Eventually foreigners were buying businesses, land and anything that could be sold. Because foreigners got everything at fire sale prices, resentment built against them.
* The Army, defeated in WWI and starved of funds, revived very quickly. This was a big surprise within Germany.
* Extremist factions arose. The best paid workers finally couldn't afford the necessities of life. Riots and unruly mobs became common.
* When nationalist spirit was eventually revived, out of defeatism after WWI and the great hyperinflation, it was rooted in revenge.

The appeal now of this book, When Money Dies, is obvious. Mathematically, sovereign debt in so much of the world cannot be repaid in real terms. The International Monetary Fund has recently come out with extremely dire warnings. However, signals from government and banking officials are encouraging. Like the German people almost a century ago, I want to believe them when they say we're in recovery and the worst is over. It would be easier to believe had I not read this book.
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on May 25, 2006
Review of the First Edition (rare hardcover) of When Money Dies, written by me on May 25, 2006, & not reedited:

I first read this book some 25 years ago. I was so impressed I immediately bought a dozen copies & gave them to pals. (In 1980 they were 3-4 pounds sterling each--it's ironic & interesting that the price of this out-of-print book now fetches multiple zeros).
Here are some parallels with our time:
The Germany of the '20s finds it cannot meet the costs of war reparations. The US of the 2000s starts a war intending to pay reparations before it begins, and then finds itself unable to meet the mounting costs of war reparations it originally thought would leap out of the ground and just pay themselves. (Meanwhile, the US's wounded soldiers [& the families of its dead soldiers] are going to require entire lifetimes of domestic reparations).
The Germany of the '20s attempted to buy/finance prosperity with ballooning deficits. The US of the 2000s wants to buy/finance prosperity with ballooning deficits. Neither nation-State can be told it is wrong--and neither admits (or even recognizes) inflation is a hidden and pernicious tax.
Germany before the '20s had every confidence in the mark. The US in the 2000s believes the only currency in the world is the dollar, & the only thing money can be made of is paper and ink (never gold or silver). But as one mixes ink with paper, hoping the mixture will have exchange value, one finds that one has given value to neither material.
As Germany becomes more unhinged in the '20s, it moves towards a strong man as a moth to a flame. As the US grows more unhinged, it loses faith in its 'strong man' (even if he does not lose faith in himself). If the US should subsequently shun whoever wants to be the next 'strong man', there may yet be be hope. Since it is possible for the next wannabe 'strong man' to be laughed off the stage, it is yet possible the US will not succumb. The jury is still out.
At times the mark strenghthens (goes against the ultimate trend, for short periods): the Germans of the '20s (and other investors) think the crisis is over and it is time to buy. At times the dollar strengthens (goes against the ultmate trend [?], for short periods): the world of the 2000s thinks the crisis may end--isn't it now time to buy cheap US assets?
The Germans of the '20s can add more zeros to their paper--but paper production does not keep up with the 'demand' for money. The US of the 2000s has but to generate a computer entry and like magic, the 'demand' for money is met. The paper of Germany leaves a trail [Fergusson proves this]--computer entries can be a hidden and dirty little State Secret [until prices rise as the money actually depreciates, the state can suppress much of the evidence].
At many levels, this book about a frightening past speaks to a menacing present. Because of its price, many will not get to read that message. Between the Germany of the '20s and the US of the 2000s, there are differences too, but not differences that necessarily help. The potential for money supply to soar (the Fed's ability to create credit by computer without even having to buy ink, paper, and printers) has never been so boundless. We of the 2000s prefer to believe we are more intellegent than the Germans of the 20s. We live with the hope that our enlightened leaders [!] comprehend inflation & understand that deficit spending shall ruin us. Enlighted people that they are, from government top to government bottom, we know and rely upon our leaders' fiscal responsibility. Just look at how enlightenment runs through the Nation--budgetary constraints are placed upon our brilliant leader, by those guardians of the Public Purse & Trust, a US legislature that checks and balances all his raw power. In truthiness [that is, if one buys their spin], they all do their utmost to preserve & protect the currency, while shouldering their duties to preserve and protect our Constitution. Tonight, can I sleep contentedly, knowing both these National Treasures are safe and sound?
Read this book: it is still found in libraries. You will be witness to ink on paper that actually has and holds its value.
May 25, 2006
Addenda No.1 of 2:

I'll use this post to import a comment I wrote in a later review of this book by "Yoda" (p.5, of these reviews). Yoda was critical of the fact that Fergusson did not offer any charts of changing values of the mark, to back his assertions that increased money supply was causing inflation--Yoda commented:

'''Fergusson does not claim explicitely anywhere in the book that he was going to "prove" that increases in the money supply cause inflation. However, he states or hints on just about every other page that there are excessive or great increases in the money supply. This is in a book on hyperinflation. Ferguson's implication, in this regard, is pretty clear.

'''With respect to "chronicling the history of what happened" the book is quite a joke. There is, literaly, not one mention of what inflation even was, despite the fact that the book, in your words is supposed to "chronicle" just this. What was the CPI? 100% per year? 1000%? 10,000%? What was the increase in industrial prices? There is barely a mention of it at any fixed time, nevermind how it developed over the time period the book discusses. Even a single table would have sufficed in this regard. In a book "chronicle" on the topic, this is a fatal mistake. In addition, there is no information or hard data on other negative ancillary aspects of inflation. For example, Ferguson mentions that inflation had serious negative impacts on employment and industrial production. Yet, again, there is not a mention of what either were during any fixed time period that the book covers, never mind how these changed over time. How can a "chronicle" of inflation and its impacts over this time period not even mention these numbers?'''

I replied (and Yoda later kindly acknowledged my reply filled in at least some of these blanks left by Fergusson) on Jul 8, 2011 2:38:55 AM PDT...
Jamal J. Hattab says:

"""The value of the mark against foreign currencies such as (1) the pound sterling (7.9864+ grams of 22 carat [0.91667/1 gold] gold or 0.2354 of an ounce of gold); (2) the dollar ($20 = 0.9677 ounces of fine gold, so that a dollar is 0.048385 ounces of gold, or about $4.865 dollars would equal one pound sterling, which at the time would be one British gold sovereign); or (2) the French, Swiss or Belgian francs, which are 20 to 0.1867 oz of gold (you can calculate that ratio of francs to dollars or sterling yourself) indexes its external fall in value. Therefore, Fergusson catalogs the fall of the mark by noting its fall against these various amounts of gold, that just so happened to be foreign currency at the time. Today as we watch the euro, dollar, swiss franc, et al plunge in value, one can still see how they chart against gold (see any chart of year gold values against the various paper monies that are tumbling downwards in value over the last ten or twelve years). Perhaps a conversion table of the various gold currencies (or a recalculation of marks per gram of gold or some other accounting, rather than referring to the various franc, dollar or sterling rates) might have helped the reader, but the account of the mark's fall is its fall against these other, at the time, sound currencies--i.e., gold money--worked for me. Those falling rates are the book's empirical evidence, evidence that I think you missed, perhaps because you did not recognize that these other currenceis at the time were actual amounts of real gold. While cataloging the mark's fall, against external gold coin, Fergusson simultaneously provides the reader with domestic price data (not officially calculated by the govenment), which, because it includes many commodities and servicies, and moves at different rates to the external value of the mark (which is why goods in marks are so cheap for foreigners at times), is considerably more difficult to pin down than the faster-moving (and better published, in business and other journals) external rates of mark depreciation against gold equivalents. At the same time, the book also catalogs even more esoteric falls in other values--declines in civility; stability; freedom from crime; rises in anarchy; items that one almost took for granted at the end of the twentieth century, but, as I write in the early 21st, for how much longer? The value of gold today, against paper money, when not manipulated, is often a harbinger of things to come. Because of gold's manipulation by various central banks and governments, the message it might telegraph to the observent gets obfuscated and is undermined. But today, I watch gold nonetheless, as an indicator of what might lie ahead. Have you bought any yet?"""
Addenda No.2 of 2 (written May 2011):

Recently, while chatting with someone about the economy at a small gathering, a women who was within earshot opined, "You know, economists don't do any good in the world."

I concurred, adding, "But if one is to accomplish real EVIL in the world, one needs to understand economics."

As the EU decides what to do about Ireland, Greece, Spain, Portugal, Italy, et al (The so-called PIGS [or PIIGS to be accurate]: if Greece left, what would the acronym then be?), and Quantitative Easing continues across the pond, we are coached: "Inflation is not a problem." I suppose if one benefits from it (as a Central Banker, printing money to help out his pal banks) inflation is NOT a problem (for the issuer of fiat money), but for many of the rest of us, this seems to be Bernanke's grand delusion.

But for those of us not in the bank-clubs, it soon will be problematic. While one can debate specific issues, the META-issue is wheter fiat money should exist in the first place: other discussion simply revolves around minutia, argued for, & over, by statists who form imagined justifications [bad arguments, rooted in 'the sky is falling' worst case scenarios, i.e. smoke screens. Or as philosphers call such 'arguments', 'rationalizations'] to maintain abusive powers to control money and enslave the rest of us through their hidden taxes and redistributions of wealth [to their all-knowing 'good' selves].

In passing, I note that Rationalization appears most often in the vicinity of Conflicts of Interest.

[...] One might better argue for possible answers: unadulterated gold money; constitutionally mandated balanced budgets--in sum, defacto and dejure taxation, but only if accompanied WITH informed representation. Accept neither hidden taxes, nor sub rosa powers, and their corollory, the special interest groups that render conflict of interest and corruption commonplace.
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on January 9, 2011
Adam Fergusson has taken one of the more dramatic episodes in economic history and rendered it sterile and devoid of life. His narrative suffers from an over-reliance upon the historical perspective described by Toynbee: "One damn thing after another."

Consider the mid-war inflation of the mark: it went from being around 1 Gold Mark= 1 Paper DM to 1 Gold Mark= 1 TRILLION Paper DM within a scant four years. Such a radical inflation led to some strange events, including--

* thieves stealing suitcases of marks and immediately dumping the contents to run away with the empty suitcases (which were worth more than the money they contained)

* diplomats finding themselves lucky enough to have one US dollar treating six of their friends to riotous parties at numerous clubs and hotels over the course of a weekend and still leaving with an inordinate amount of change

* restaurant patrons sitting down to enjoy a 5,000 mark cup of coffee, only to find that the price had increased to 8,000 marks by the time they had finished drinking it

* workers demanding to be paid twice a day, as the marks they received at the beginning of the day would be worthless by the afternoon

* people finding that the savings which would have bought a summer house were, a couple of years later, only able to purchase a few bottles of champaign

* An old bachelor found that by the time the queue he was in had reached the store, all that remained to purchase were infant's clothes. He purchased them in the realization that holding *anything* tangible was better than holding marks which would be worthless in a few hours

Why did Germany keep the printing presses rolling in the face of such events? The standard response is that only through runaway inflation could she hope to settle her war reparations with France, which she would otherwise have no way of paying. The British Prime Minister lamented that France sought to punish Germany without end, cynically maneuvering Germany into default and therefore paving the way for a French occupation of the Ruhr-- all of which played out exactly as he feared.

Indeed, France emerges as being more responsible for German suffering than has been previously described. She indirectly bears responsibility for the conditions that gave rise to National Socialism and Adolf Hitler. France occupies a seat of honor in the great tally of epic mistakes made by nations during the 20th century.

One wishes Fergusson would have settled upon a more imaginative design than to open each chapter with dire words about how just when Germans thought things couldn't get any worse, the sky really began to fall. Perhaps that is an unavoidable hazard in telling a story about hyperinflation, where things, a-hem, continue to get worse and worse.

A more effective approach would have been to track the human tragedy, to which Fergusson pays scant attention. When telling a story like this, one quickly grows weary of adding yet more zeros to the rate of exchange; such numbers only become meaningful when human affairs are attached to them. Although Fergusson faithfully recounts excerpts of diplomatic letters, there is not enough examination of what average Germans experienced through the monetary nightmare.

One cannot help but feel that a more visceral account of the Weimar hyper-inflation will one day be told.
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VINE VOICEon September 8, 2011
Fergusson's book, written 40 years ago, was republished in 2010 obviously to offer parallels to today's economic and financial travails. The book is a worthy addition to the history of the fated Weimar Republic. Though hyper inflation is not America's problem yet, currency debasement and the spector of economic and financial collapse of civil society surely is and should be considered with caution and should be foreseen. "Inflation is the ally of political extremism, the antithesis of order." In sometimes exhausting detail, Fergusson confronts the breakdown in German civil society by way of tax evasion, public and private corruption, food hoarding, currency speculation and illegal exchange transactions. The hectic maddening details of daily German lives fascinates. His chronological storyline borders however on repetitious for long passages and is regrettably academic as the exchange rate in the depreciation of the mark to the pound, and the mark to the dollar is described quarter after quarter without sufficient explanation of cause and effect. Ruhrkampt, the French occupation of the Ruhr, is weaved into the story line and factored into the cause for the continuing crises. Weimar Germany's concurrent burden of the French demand for reparations is detailed without polemic appeals. Austria and Hungary's ordeals are described. In his convincing concluding chapter, the author rejects the claim that the Germans deliberately tried to inflate their money "to avoid the costs of reparation." The "soft political option," or political cowardice to make early tough choices was inflation's cause providing a take-off point when hyperinflation "was but a matter of time." This book is a focused scholarly examination of the economic and financial crises of Germany, Austria and Hungary, post World War One. With one brief aside about "Dolchstoss," the presumed "stab in the back" of the German Army by German politicians, Fergusson avoids in large measure the political causation issues of pre Nazi Germany. Liaquat Ahamed's "Lords of Finance" is also a superb macro addition to understanding the run up to Hitler and Nazi Germany.
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on September 9, 2012
I did manage to read the whole book although it was a struggle.

It is basically a linear narrative of increasing prices, month by month, year by year. I think about 80% of the book could have been put into a few pages of tables and graphs.
For someone with no detailed knowledge of this history, it might be a suitable introduction. It will certainly be a frustrating one. For most discussed companies, politicians, parties and places there is no introduction. Because of this there is a real limit to the lessons that can be extracted. To be fair, the author specifically states up front that the reader is on his own with respect to extracting lessons. He is also clear that this is not an economics book. And he is right.

The main problem with this book is that the audience was not well defined. In order to fully comprehend the inflation you need to know something about Germany in this period: the economy, industry, politics, key actors and culture. So this rules out just about all Americans. Presumably those that already had the historical background would already know a lot about the inflation.

The author uses very long sentences and a lot of commas, colons and semicolons. Interestingly, parentheses seem to be under represented. I read this on my Kindle which was good because the internal dictionary was convenient (but not always comprehensive enough for this author).

In my opinion, the best parts about the book are the personal accounts from diaries of the period. The book would have benefited from a lot more of this. If I remember correctly these accounts are taken from just two sources. I'm guessing there must be additional primary accounts.

The reason I wanted to read this book was to get an idea of how people behaved and the strategies they used to cope. You can find some of this information, but you will have to extract it yourself. This is a list of chapters that are NOT in this book. This list could also serve as a thought outline to keep in mind while reading to help extract some potentially actionable information.

1. The barter economy (How did it develop and what items were the most useful? I already knew links from gold jewelry and cigarettes were convenient but had not thought of good cigars. I think this is the extent of items mentioned in the book).
2. Banking and Finance (Failures, legal changes, access)
3. Currency, stock and bond speculation strategies ( which ones worked and which did not)
4. Political parties and their impact on the struggle
5. The role of culture and morality
6. Corruption and financial crimes
7. The conflict between urban, suburban and rural communities (I did learn food stayed on the farm because the farmers would not sell for paper money. There is a particularly horrifying first-hand account of a raid by city dwellers on a small farm.)
8. Information flow (It seems that most Germans did not really understand what inflation was and had limited and untimely access to current events) How would modern information technologies have helped? Or would they have been shut down?)

Good luck!
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on March 29, 2011
"When Money Died in East Germany"
Dr. Ali Fant, WB5WAF

I appreciate the difficulties the author had in making the extreme societal crises understandable to the modern reader in 2011. The rate of currency destruction is so quick and so vast that it boggles the mind to comprehend it. The author used the historical fiscal nightmare of what happened in 1923 Germany when that government sought to print its way out of the legal obligations owed the world for the greatest war in human history, The Great War.

Only when that nightmare led directly to the Second Great War of Humanity did people begin to refer to the first by the shortened moniker "World War I" and its descendant as "World War II."

The author seeks to help readers understand what happens when a nation's currency becomes totally worthless. It has happened twice in the United States (Continental Dollars and Confederate Dollars) and it can happen again. Just as Americans in those dire times lost everything if they waiting too long to convert their cash into something, anything, of comparable worth; the lesson must be learned anew.

In the age of electronic currency, the printing press is not used for Quantitative Easing. Wealth is created by government edict. In America, the government creates whatever digital wealth the banker-owned Federal Reserve asks to be created. Most Americans know the Federal Reserve is neither federal nor a reserve. It is an external, non-governmental agency created during the Great Depression to manage wealth creation. It is all just ephemeral numbers representing non-material wealth. As a privately owned entity, it refuses United States Congressional efforts to have its fiscal books audited.

Some specific experiences about what happened to money in East Germany in 1988 prior to the Berlin Wall's collapse in 1989 may be instructive for Americans facing the possible destruction of our dollar.

Prior to 1989, American tourists flocked to East Berlin in the heart of East Germany (DDR) on bus shopping trips. Special military chartered tour buses carried Westerners pass a guarded Checkpoint Charlie because the Four-Power Agreement prohibited the search of passengers on such buses.

Tourists were urged to bring empty suitcases and plenty of DDR cash. DDR cash was available at banks and hotel counters throughout West Berlin. The rate was 10 DDR marks to 1 West German (D) mark. Past the Checkpoint Charlie, however, the rate was officially 1 DDR to 1 D mark.

Around Christmas 1988, Americans shopped East Berlin stores with great zest. I was amazed how much one could buy for so little cash. I purchased a handcrafted zither musical instrument for less than ten dollars. The same instrument sold in America music stores at the time for over 150 dollars!

I recall one American complaining about the limited selection of handmade quilt colors. The East Germans were glad just to be able to buy a quilt if they had the money available after food purchases.

And although Americans were urged not to purchase food items in order to leave something for the locals to buy, I am able to report that many Americans were pigs, buying everything in sight.

Americans were not seen as pigs by the storekeepers trying to feed their family. Indeed, the storekeepers encouraged American tourists to shop often and a lot. I reconciled myself that I was a wealthy benefactor rather than a piggish, thoughtless tourist buying out a nation's dying economy.

The key difference between the book "When Money Dies" and my experience in the 1980s was how electronic cash transactions were handled. VISA Cards and MASTER Cards acceptance signs were posted throughout East Berlin. The merchants preferred credit card electronic transactions because the banks paid the shopkeepers with hard-money credits based upon the American dollar.

However, the official DDR mark was the currency of the nation and most DDR citizens could not meet the extremely high "real money" salary qualifications for card issuance. Even with credit cards, many non-military connected Western businessmen walked across the border for inexpensive lunches with friends every day. The meals cost less because the currency of that nation was so worthless.

Specifically, I could purchase a small electronic piano (assuming I had friends to help deliver it to the tourist bus) for $1000 on a VISA card or $100 cash in DDR marks. The choice was obvious.

There was one major disadvantage to using a dying currency that the author does not mention in the book. The East German government required any tourist not on a military chartered bus to surrender all their unspent currency before leaving their nation's border. You were not allowed to take any of the nation's money outside the nation.

Could I have lied and kept my cash? Possibly, but the twin fear factors of confiscation and my imprisonment made that decision a no-brainer. Purchase receipts for goods and remaining cash were carefully compared. I was threatened with prison for black market currency. I professed my innocent and explained that my 1:10 currency exchange was made at my hotel's front desk in West Berlin.

The female DDR guard claimed such rates were not official as 1 DDR mark equaled 1 D mark. In lieu of prison, I agreed to turn over all DDR cash in my pocket to the government. I walked out with my purchases under my arms vowing never to travel to East Berlin again unless it was on the diplomatically protected, military chartered tourist buses. On the tourist bus, I kept my DDR cash.

I reported the incident to the United States military authorities as it seemed the moral thing to do. It would not be until long after the Wall fell that the reality of what I had experienced became clearer. East Berlin was starving and the government was under orders to steal whatever cash they could from frightened Western tourists not on a diplomatically protected conveyance. It was a sad epilog to my journeys into a dying and now non-existent Communist nation.

When the DDR ceased to exist as a nation, people found their bank accounts depleted by a fixed ratio. The author Adam Fergusson writes that in 1948, ten Nazi Reichsmarks were traded for one D mark. However, and this point is critical for the readers today, bank accounts were credited with only one D mark for every 6.5 Nazi Reichsmarks shown on the customer's latest bank statement.

After the Wall fell in 1989, people's bank accounts were similarly devalued. I do not know the exact ratio of reduction, but I do know people gave their worthless DDR marks to the churches as donations.

In America today, you must declare "monetary instruments" of $10,000 (or more) to Border Control checkpoints or face the item's confiscation by the United States government. Only ten United States 2011 Golden Eagle Coins, each with a legal tender value of $50 each, but a gold market value of $15,000.

When foreign tourists begin flocking to America to spend paper cash (not credit cards) for stuff they really do not need, citizens should remember this fact from the book: Currencies do fail, national governments do cease to exist, and the educated citizen always survives better than the less educated.
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on October 3, 2011
The Weimar Republic crisis and hyperinflation have some very disturbingly similar aspects to the problems we are now facing in our own country, America. Actually it seems that the Weimar crisis is our worldwide crisis nowadays. Labor problems, decadent morals, populace overwhelming debt, government insolvency, banker stranglehold on the country's resources, war debt, foreign occupation, food price escalation, farmer refusal to bring produce to market at a loss, price fixing, black-market commerce that plagued the German people in the 20's and 30s is strikingly current. Except for one glaring irony, Germany is today the power house economy of the world. What a stunning reversal!!!

Reading the text, one gets the unsettling feeling that not only history repeats itself but that, very possibly, the heirs and grandchildren of the original financial players are again reenacting the drama of that time for the devastating transfer of middle class wealth to the coffers of the money manipulators. Nothing breeds repetition like stunning success. Germany was picked to the bone as this text adequately conveys very possibly by the same vultures that are busy picking the bones of the rest of the world today. "When Money Dies" is universal in its application and timely for the worldwide situation. It might very well give us a roadmap of what's in store for all of us.
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on January 30, 2014
I got this book in October 2010 based on a recommendation from either or another website devoted to providing a dissenting view to mainstream economics. It was first published in 1975, just four years after the Nixon administration had severed the last tie between gold and the U.S. dollar by closing the international “gold window” and terminating the right of foreign governments to exchange dollars for gold. At that time the prospect of an American hyperinflation seemed far off, even as inflation was rising fast, and those scratchy old silent-film clips of forlorn Germans pushing wheelbarrowfuls of banknotes to the bakery to buy bread were quaint and unreal-looking.

As I type these words the price of gold is US$1,818 per ounce, an increase of 4400% since 1971, and last week Switzerland, long a bastion of monetary probity, gave up on maintaining the value of its franc and pegged it instead to the moribund Euro, joining the other major currencies in a death-spiral of competitive devaluation. For those aware of what hyperinflation is, the possibility of experiencing it for ourselves is becoming ever more plausible and imminent. Adam Fergusson’s book gives a detailed picture of how hyperinflation—the death of a paper currency—played out in a modern industrial economy in the 1920s. It’s not a pretty sight.

I never knew much about the Weimar hyperinflation, but assumed that it had something to do with the payment of war reparations imposed on Germany by the Treaty of Versailles. And while Fergusson’s topic is not really the cause of the hyperinflation, he does eventually come out and say that war reparations probably had nothing to do with it. Instead we see a fledgling republic facing severe social and economic problems, but whose leadership throughout remains stubbornly timid and ignorant. The leaders of both the government and its central bank, as well as newspaper editors and other leaders of opinion, were almost unanimous in asserting that the inflation had nothing to do with the runaway printing of banknotes, which they saw as an effect rather than as a cause of rocketing prices.

Hyperinflation inflicts severe suffering on almost everyone except those able to profit by making bets on the collapse of the currency. The suffering, though, is very unequally distributed, and the injustice of the whole process is one of its most striking features. With a whole generation of children malnourished, women selling their bodies for a pork chop, and retired civil servants dropping dead on the street from hunger and cold, you also have farmers hoarding bumper crops, unwilling to sell for worthless paper money, and industrialists in a frenzy of factory-building to make use of cheap credit. Some of the best parts of the book are extracts from the journals and letters of housewives describing what they see around them. They witness mob violence and exchange their pianos for potatoes.

In other ways though I found the book to be a dry read, and I felt that it was really addressed to people who were already students of this period of German history and had a grasp of the people and events of that time. The author assumes a knowledge of the time and place that in my case was lacking, which made the reading tougher going. I also found that his style lacked fluency, which made things harder as well. A sentence taken at random: “The uncertainties to which these postponements gave rise in large measure accounted for the wild fluctuations of the mark during the year.” Another writer would have put this is a more readable way.

All of that said, this book was for me very readable because of its relevance to the events unfolding around me in the world. The enormous federal budget deficits in the United States are starting to look like the Weimar deficits, and although printing presses are no longer used to create money, dollars are being created by the trillion—a figure that became familiar in Germany in the early 1920s. When I go shopping I’m struck by how much less my money buys than even a year ago, and I fully expect that prices will only accelerate upward from here.

But does that mean we’re headed for actual hyperinflation? According to writers like James Turk of and John Williams of, yes we are. Williams, a longtime statistician with the U.S. federal government, thinks it will be in the next year or two.

But are our governments as timid or as deep in denial as the Weimar republic? I’ll leave that question with you. Another thing I’ll leave with you is a favorite quote from another writer, Henry Hazlitt, an American journalist on economics and finance. In 1946 he wrote these words:

"Inflation discourages all prudence and thrift. It encourages squandering, gambling, reckless waste of all kinds. It often makes it more profitable to speculate than to produce. It tears apart the whole fabric of stable economic relationships. Its inexcusable injustices drive men toward desperate remedies. It plants the seeds of fascism and communism. It leads men to demand totalitarian controls. It ends invariably in bitter disillusion and collapse."

If you’re looking for a refutation of Hazlitt’s points, you won’t find it in When Money Dies.
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