Bankers are currently buying rare copies of a book published in 1974 that talks about the mechanics of the Weimar inflation. There is great excitement spreading around regarding this $700 worth of book. The ghost of past’s inflation apparently is scaring the world (if not the elites). Amazon sells the used book for $328 and $700 for an “almost new” edition. You can easily read the book online on Scribd.com or download it as a pdf file for free.

The Weimar inflation in the 1920′s was actually not the first or the only inflation in Europe that has ever happened. Nor is it the most extreme hyperinflation known throughout history. However many of the dramatic and unusual economic behaviors that are now associated with hyperinflation were systematically recorded and documented in Germany during the inflation.

UK’s news website Telegraph.co.uk reported that in the book it was documented that large mobs of half-starved townsmen went to the villages to seize food from farmers who were accused of hoarding. A diary of a young women describes the scene at her cousin’s farm:

In the cart I saw three slaughtered pigs. The cowshed was drenched in blood. One cow had been slaughtered where it stood and the meat torn from its bones. The monsters had slit the udder of the finest milch cow, so that she had to be put out of her misery immediately. In the granary, a rag soaked with petrol was still smouldering to show what these beasts had intended.

What is very surprising to me personally is the comment in the book that explains how wealth transfer occurred from savers to debtors. People who borrowed heavily from government and banks in order to buy hard assets (anything that is tangible from property, food, seed, precious metal and so on) became winners. Those who had been saving their wealth in paper money were complete losers.

A grand piano became a currency as the rich had to trade this symbol of their statuses for a sack of potatoes. People were forced to give away their coat or shoes in the street at knife-point. Whatever they can get their hands on, that can be used to trade it with food, they will take.

What the Weimar inflation in 1923 started with very similar events that we know has been happening in the United States. Page 16 in Chapter 1 of the book reads, ”

The beginning [of the German inflation 1923] was in the summer of 1914, a day or two before World War I opened, when Germany abandoned its gold standard and began to spend more than it had, run up debt and expand its money suppy.

Hmm. Does it not sound familiar? Continue reading to the next paragraph and see how, like the US, Germany took out more loans to pay more wars in the middle of the dying Reichsmark. Read on,

Germany started by not paying adequately for its war out of the sacrifices of its people – taxes – but covered its deficits with war loans and issues of new paper Reichsmarks.

Although America has not (yet) issued a new currency, would it be surprising if they finally did exactly what happened in Germany? The ghost of the 1920 inflation is now haunting the world. Even the elite bankers of this generation are consulting this ghost for a glimpse of what is next to come in the upcoming hyperinflation of 2011-2012.

Buy Dying of Money: Lessons of the Great German and American Inflations here on Amazon.com or read the article reviewing the book here.

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