Posted on 07/23/2002 5:11:52 PM PDT by rumrunner
Larry Kudlow mentioned that the Federal Reserve may be meeting tonight to discuss the exposure of Citibank and JP Morgan Chase to derivatives and the stock market collapse.
Possible that both banks have billions of derivatives that need to be unwound. Would collapse the banking industry.
Effects of the Inflation
Prices and incomes changed daily. A former student recalls: "One fine day, I dropped into a café to have a cup of coffee. As I went in I noted that the price was say 5,000 marks - just about what I had in my pocket. I sat down, read my paper, drank my coffee and spent altogether one hour on the café, and then asked for the bill. The waiter duly presented me with the bill for 8,000 marks. 'Why 8,000 marks?' I asked? The mark had dropped in the meantime I was told. The 'index' based on the dollar exchange rate had altered so much that the price had gone up by 60% while I was sitting at the table. So I gave the waiter all the money I had - and he was generous enough to leave it at that."
People who did not convert their savings into tangible assets (or Sachwerte) lost them. Pensions became worthless, the middle class was by and large reduced to poverty. Many starved to death. Conditions were so harsh that people even ate dog meat: around 20,000 dogs were slaughtered for human consumption in 1923 alone.
Typical is the case of a bank which, unwilling to keep open an account with 68,000 Marks, informed the customer that it was to be closed. "Since we have no banknotes in small enough denominations at our disposal, we have rounded up the sum to 1 million marks. Enclosed: one 1 million mark note."
Emergency Money
On the 17th July 1922, a law was passed to permit the printing of emergency money with certain safeguards. After that municipal banks, the railways, local authorities and also private firms used this law to start printing their own money. In the end it was estimated that more than 2,000 kinds of emergency money were circulating, and many of them were not authorised.
Many municipalities, reacting to the Reichsbank notes which became more drab and dull, took pride by giving their money and attractive look by good design and witty texts - often in verse or the local dialect. Some advertised their local industries by using leather, linen or silk to print on. One town issued money consisting of leather suitable for soling shoes as a truly inflation-proof form of currency, while one private firm promised the bearer "one pound of rye."
Before World War I, the highest denomination note had been the 1,000 mark note, affectionately known as the "brown rag". Being the equivalent of some 250 US dollars, it was rarely seen by most people before the inflation. Today, a note in perfect condition fetches no more than a couple of dollars or so.
From "Life during the Inflation of 1923" at http://www.geocities.com/Vienna/5373/notgeld/1923life.htm
Greed + connections + no controlling legal authority = more money
more money + more greed + better connections + no controls = Power
Power + greed + more money + collusion = Uncontrolled Power
POWER and ENTITLEMENT at any cost!
Well color me "DUH"! I'll be sure to take my O2 tank and spacesuit with me when I climb up on the stack of G-notes. :^)
Au contraire, mon frere! Demand in real estate is outstripping supply because it's the only game left in town for the hot money. Lenders are cutting back on commercial loans for silly things like manufacturing equipment and loaning it to anybody with a pulse who wants a McMansion or a Lexus. After CDOs start imploding and the hot money spigot gets turned off, the demand for residential real estate dries up like the Gobi Desert and every sucker who bought a dream house is going to find himself upside down for a decade or more. (HINT: Better LOVE your new house, `cuz you'll be living in it a long, long time.)
There is NO need for new technology over the next few years - PCs don't count because they're commodities now and there's zero profit margin. The world already has enough fiber optic cable and routers to last it for years.
And what new markets are to be tapped? America buys all the world's junk as it is. Nobody buys from us anymore. We don't even manufacture anything - we've lost several MILLION manufacturing jobs the past decade!
They can't hide Rubin forever .. too many folks lost some BIG bucks because of him and his Clinton deals
I want Rubin in jail
LOL
Seeing as annual GDP is under 10 trillion... I'd say that it's reall money...YIKES
Never, ever, underestimate the hypocrisy of Big Media. Ever.
What's interesting about this story (besides the way it illustrates hyperinflation) is that I beleive that about 1/3 of the American public probably doesn't understand what this student was talking about.
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