Included are some of my favourite direct quotes from the book - proof of work - beyond the eyes (for now) of ChatGPT:
.....
✍️ Summary
The book portrays the devastating effects of hyperinflation on the German economy, currency & society as well as the even more painful consequences of the return to stabilisation of the currency (following hyperinflation) during that period.
“Money is no more than a medium of exchange. Only when it has a value acknowledged by more than one person can it be so used. The more general the acknowledgement, the more useful it is.”
“Once no one acknowledged it, the Germans learnt, their paper money had no value or use – save for papering walls or making darts.
"The discovery which shattered their society was that the traditional repository of purchasing power had disappeared, and that there was no means left of measuring the worth of anything.”
“In hyperinflation, a kilo of potatoes was worth, to some, more than the family silver; a side of pork more than the grand piano. Theft was preferable to starvation; warmth was finer than honour, clothing more essential than democracy, food more needed than freedom.”
📖 Importance of reading
“When a nation’s money is no longer a source of security, and when inflation has become the concern of an entire people, it is natural to turn for information and guidance to the history of other societies who have already undergone this most tragic and upsetting of human experiences.“
😢 Who Lost
*** The general population, especially the middle class and those on fixed salaries, experienced severe financial hardships as their savings and purchasing power were wiped out by the rapid devaluation of the currency.***
Many small businesses and local industries struggled as the costs of production skyrocketed and customers were unable to afford their goods and services.
“The best- paid workers were unable to purchase the barest necessities of life. The others and – as ever – those on fixed incomes or dependent on savings suffered accordingly.”
“The failure of wages to keep pace with prices, and the consequent impoverishment of even the most fortunate workers, had a direct effect upon the trade unions.”
😅 Who Benefited
Speculators and those who had access to foreign currencies or tangible assets (such as property, gold, or other commodities) were able to profit from the chaos and protect their wealth from the effects of hyperinflation.
Some industrialists and large corporations were able to benefit from the situation by buying up assets and smaller competitors at heavily discounted prices due to the currency collapse.
There were however many small business owners early-on who were able to stave-off bankruptcy simply by being able to increase prices of in-demand goods in the face of increased inflation.
“In the countryside the landowners and farmers were less affected than anyone, producing most of their own essentials and putting up commodity prices as regularly as the shopkeepers.”
“Foreigners were also buying up real property and interests in factories and all kinds of businesses. To some extent this was at the expense of the workman whose wages lagged behind the climbing cost of living, but it was mainly at the expense of the middle classes whose capital was destroyed and largely exported.”
“Anyone who was alive to the realities of inflation, he said, could safeguard himself against losses in paper currency by buying assets which would maintain their value: houses, real estate, manufactured goods, raw materials and so forth.”
😠 Effects on Society
The hyperinflation crisis led to a significant decline in the standard of living for many Germans, as the cost of basic necessities became prohibitively expensive.
“In view of the rocketing cost of labour, the eagerness of manufacturers to extend their works, renew their plant and embark on large improvement schemes was at first sight somewhat extraordinary.”
“From a social point of view, too, so much commercial building was unfortunate in a country now short of over a million houses – in part the result of the rent restriction Acts which had throttled the private sector of the building industry. “
“Those eating well in restaurants were those who could afford to eat well in restaurants. As money saved diminished like a lump of ice on a summer’s day, there was in any case every incentive to eat it, drink it or be merry on it.”
“Few families can afford meat more than once a week, eggs are unprocurable, milk terribly scarce and bread already sixteen times the price of a few days ago when the maximum price was abolished.”
“It was quite impossible to quote prices in advance, and customers themselves would not take the risk of committing themselves”
“Exorbitant interest rates, at 25 per cent a month, and the universal shortage of money meant that normal commercial life was seriously hampered. “
“When people do not understand what is happening, or why it is happening, and have no idea about what to do about it, and are not told, panic must follow.”
“Petty crime, the crime of desperation, was flourishing. Pilfering had of course been rife since the war, but now it began to occur on a larger, commercial scale. Metal plaques on national monuments had to be removed for safe-keeping.”
🔽 Reduced Bankruptcies & Perverse Incentives
“The government can have seen only two relatively bright patches…one was that the country’s internal debt, to the distress of the stockholders, had dwindled to nothing. The other was the almost total absence of unemployment.”
“Before the war, when the mark was sound, there were normally about 9,500 bankruptcies a year. As wartime inflation increased, the number regularly dropped, from 7,739 in 1914, to 807 in 1918. The total number in 1921, during the first seven months of which the mark was fairly stable, was 2,975, more than double the 1920 figure and three times that of 1919.”
“The 1921 figures were the most indicative; for in comparing the number of bankruptcies during the various months of the year it could be shown that a falling mark was associated with a decline in bankruptcies, and vice-versa”
“The government was aware, rises in wages – and government salaries – would always be 15 days in arrears of the rise in the cost of living “
👨👩👧👦 Stories from People
Bartering and alternative currencies
“Communities printed their own money, based on goods, on a certain amount of potatoes, or rye, for instance. Shoe factories paid their workers in bonds for shoes which they could exchange at the bakery for bread or the meat market”.
Crazy daily life
There are stories of people needing wheelbarrows full of cash just to buy basic necessities, such as bread or milk. The rapid decline in the value of the currency meant that people had to carry large amounts of banknotes to make everyday purchases.
“There were stories of shoppers who found that thieves had stolen the baskets and suitcases in which they carried their money, leaving the money itself behind on the ground”
“There were stories of restaurant meals which cost more when the bills came than when they were ordered. A 5,000-mark cup of coffee would cost 8,000 marks by the time it was drunk.”
Speculation & FX
“Speculation in currency was in no way the exclusive domain of the financially informed – banker, politician, businessman or workman (too).”
“Those with foreign currency, becoming easily the most acceptable paper medium, had the greatest scope for finding bargains. The power of the the dollar, in particular, far exceeded its nominal rate of exchange.”
Asymetric information
“My relations and friends were too stupid. They didn’t understand what inflation meant. They didn’t rush to get rid of their money (that was what the Jews and the Germans did). All my relations thought it would stop the next week – and they went on thinking so. They woke up very late. They started selling their valuables because they couldn’t buy food – the china from the mantelpiece, the furniture, the silver.”
False hope & disillusionment
During the hyperinflation period, there were times when prices appeared to be stabilizing, giving people a sense of hope that the worst was over. However, these moments of respite often proved to be temporary, leading to further disillusionment and despair as the economic situation continued to deteriorate.
Hoarding
“The countryside had had a bumper harvest, but there it remained because of the farmers’ steadfast refusal to take paper for it at any price.”
“No pork was being delivered because, said the reports, the farmers were eating it themselves. Owing to the absence of artificial oils from abroad there was a shortage of cattle feed, and milk yields were falling off."
"Berlin’s daily milk litres had fallen to 130,000, and the city’s biggest dairy, was selling only 25,000 litres a day against more than a million before the war. Butter was not obtainable, and would anyway have been too expensive for most people.”
Blame Game
“It was the natural reaction of most Germans, or Austrians, or Hungarians – indeed, as for any victims of inflation – to assume not so much that their money was falling in value as that the goods which it bought were becoming more expensive in absolute terms; not that their currency was depreciating, but – especially in the beginning – that other currencies were unfairly rising, so pushing up the price of every necessity of life.”
“Circumstances rapidly grew more favourable to the forces of Fascist darkness operating in the south.”
“Economic distress is leading the people to be much more amenable to authority as representing the only hope of salvation from the present state of affairs.”
Unnecessary Expenditures
“Dr Schacht’s account of the inflationary years recalled that farmers ‘used their paper marks to purchase as quickly as possible all kinds of useful machinery and furniture – and many useless things as well. That was the period in which grand and upright pianos were to be found in the most unmusical households.”
Rent controls
“In Vienna most people lived in flats, for only the very rich had houses which they could afford to keep in repair. Because rents were kept so low (rent restriction is habitually one of the first and cheapest of government devices to restrain the cost of living under inflation) flats themselves were in short supply.”
“Though unable to raise their rents, many landlords at least had the consolation that their own mortgage payments were no more than a nominal burden to them “
💰 Scale of Devaluation
1913
"In the eight years since 1913, the price of rye bread had risen by 13 times; of beef by 17. Those were the commodities which had fared best. Sugar, milk, pork and even potatoes had risen between 23 and 28 times; butter had gone up by 33 times."
"These were only the official prices – real prices were often a third higher – and all these prices were roughly half as much again as in October, only two months before.”
1922
“A litre of milk, which had cost 7 marks in April 1922 and 16 in August, by mid- September cost 26 marks. Beer had climbed from 5.60 marks a litre to 18, to 30. A single egg, 3.60 in April, now cost 9 marks.”
“September’s 26-mark litre of milk became October’s 50-mark litre. Butter at 50 marks a pound in April could be had for 480. In two months the price of an egg had doubled to 14 marks. A pocket comb cost 2,000 marks; a pot of honey 8,000; a pair of child’s trousers 5,000; a dozen kitchen plates 7,500; a pair of silk stockings 16,500; a roll of lavatory paper 2,000; a pair of children’s shoes 2,800. Three masses for a relation, however, were still available at the old price of 150.”
“Milk which had cost him an unbelievable 78 marks a litre in the first week of November cost him 202 marks a month later. Butter had risen from 800 to 2,000 marks a lb.; sugar from 90 a lb. to 220; eggs from 22 each to 30. Although potatoes were still available for 8 marks a lb., an increase of only 1 mark, he had to pay 1,400 marks for 1 lb. of eatable sausages to go with them.”
“The gold value of the money in circulation, equivalent to nearly £300 million before the war, and to £83 million in July 1922, had by November fallen to £20 million.”
1923
“In October 1923 it was noted in the British Embassy in Berlin that the number of marks to the pound equalled the number of yards to the sun."
"At the end of the Great War one could in theory have bought 500,000,000,000 eggs for the same price as that for which, five years later, only a single egg was procurable.”
“Although in real terms the stock market began to go up, the mark’s purchasing power continued to go down.”
🚫 Capital Controls
“At home in Germany, where people were resorting to trade by barter and progressively turning to foreign currencies as the only reliable medium of exchange, new Orders were brought in relating to the purchase of foreign bills and the use of foreign exchange to settle inland payments.”
“A currency speculator who borrowed from the Reichsbank on January 1, 1923, enough paper marks (about 1,98m) to buy 100,000 dollars, and on April 1 sold enough dollars (about 80,000) to repay the bank, and who again borrowed the equivalent of 100,000 dollars and continued thus until the end of May, could have made the equivalent of a quarter of a million dollars at the expense of the acceptors of pure marks."
"His problem then, of course, was in what form to keep his profits: if they were in marks, they would evaporate before his eyes.”
🧻 Stability then created Unemployment
“The overriding issue was the swelling unemployment. The extent to which the act of stabilisation contributed to the number of workless is not easily determinable.”
“The old currency having been reduced to total unacceptability, there was no way whereby printing money could keep anyone in his job any more.”
“The choice had simply become between unemployment and financial chaos or unemployment and monetary discipline.”
“When the mark was still falling, the merchants had been able to charge high prices with the justification that they had to cover themselves against the fall…The biggest importers, who had ordered when depreciation was in full spate hoping to repay in depreciated marks at the Reichsbank’s expense, found themselves threatened with bankruptcy, panicked, and began to throw their stocks on to the market.”
“Stabilisation had ended the period when entrepreneurs could borrow as much as they wished at the expense of everyone else. A vast number of enterprises, established or expanded during monetary plenty, rapidly became unproductive when capital grew short.”
“More realistic transport, fuel and food prices, and the return of rents to economic levels meant that wages, too, had to be raised substantially in real terms.”
“Companies were often unable to buy new machinery after stabilisation came, so much so that huge stocks of unsold iron and coal began to build up.”
“In the inflationary period new factories were built, old establishments reorganised and extended."
“The conflicting objectives of avoiding unemployment and avoiding insolvency ceased at last to conflict when Germany had both. The longer the delay, the more savage the cure.”
......
🤑 Want more?
For those interested, I also have a similar write-up here on StackerNews about the Sovereign Individual book
When Money Dies is a detailed account of the Weimar Republic's hyperinflation in Germany from 1921 to 1924. Written by Adam Fergusson, the book explores the causes, consequences, and lessons of this period of economic chaos. Although this summary cannot do justice to the depth and breadth of the book, this analysis will highlight its key themes and insights.
I. Introduction
The book begins by introducing the concept of hyperinflation, which occurs when a country's currency loses its value at an alarming rate. Fergusson sets the stage for the Weimar Republic's experience with hyperinflation, which was one of the most extreme cases in history. He explains that the origins of the crisis lay in the aftermath of World War I and the punitive peace settlement imposed on Germany by the Treaty of Versailles.
II. The Treaty of Versailles and the Origins of the Crisis
The Treaty of Versailles, signed in 1919, placed the blame for World War I solely on Germany and Austria-Hungary. Germany was required to pay reparations for the war, which amounted to billions of dollars. This financial burden, along with the loss of industrial territories and resources, crippled the German economy.
Moreover, the Weimar Republic was politically unstable, with multiple factions vying for power. The government struggled to maintain control, and the economic situation worsened. Fergusson argues that the combination of these factors laid the groundwork for the hyperinflation that would follow.
III. The Role of the Central Bank
Fergusson describes the role of the Reichsbank, Germany's central bank, in contributing to the hyperinflation crisis. The bank was supposed to be independent, but it was heavily influenced by political pressures. In an attempt to ease the financial burden of reparations, the bank engaged in the aggressive printing of money, leading to a rapid increase in the money supply. This resulted in a vicious cycle of inflation and devaluation of the currency.
IV. The Effects of Hyperinflation
The book delves into the devastating consequences of hyperinflation on German society. As the value of the mark plummeted, prices for basic goods and services skyrocketed, making it increasingly difficult for people to afford necessities. Savings and pensions were wiped out, causing widespread poverty and despair. The middle class, which had been the backbone of German society, was particularly hard hit.
Fergusson also explores the impact of hyperinflation on businesses. Many companies struggled to survive, as they could not keep up with the rapidly changing prices and exchange rates. Bartering became common, as people lost faith in the currency.
The psychological effects of hyperinflation were profound. The constant struggle to make ends meet eroded trust in institutions and fostered a sense of hopelessness.
V. The Political and Social Consequences
The hyperinflation crisis had far-reaching political and social implications. It led to the rise of extremist parties on both the left and the right, as people sought radical solutions to the economic chaos. In particular, the crisis provided fertile ground for the growth of the Nazi Party, which capitalized on the widespread discontent and disillusionment.
The social fabric of the country was also strained. Traditional values were undermined, and crime rates increased as people became desperate to survive. Fergusson highlights the moral decay that accompanied the economic collapse, as individuals were forced to make difficult choices in order to provide for their families.
VI. The Stabilization of the Currency
Fergusson recounts how the German government eventually managed to stabilize the currency and bring an end to the hyperinflation crisis. In 1923, Gustav Stresemann became Chancellor and introduced a series of measures to restore confidence in the currency. These included the creation of a new currency, the Rentenmark, which was backed by real assets, and the implementation of strict fiscal policies to control government spending.
The international community also played a role in stabilizing the German economy. The Dawes Plan, implemented in 1924, restructured Germany's reparations payments, making them more manageable and helping to restore confidence in the country's ability to meet its obligations.
VII. Lessons from the Weimar Hyperinflation
In the final section of the book, Fergusson reflects on the lessons that can be learned from the Weimar hyperinflation crisis. He emphasizes the importance of sound monetary policy and the dangers of excessive money printing. He also highlights the need for political stability and strong institutions to prevent such crises from occurring.
Fergusson warns that although the circumstances of the Weimar Republic may be unique, the potential for hyperinflation remains a threat in any country that fails to manage its monetary and fiscal policies responsibly. He points to the importance of central bank independence and the necessity of maintaining public confidence in a nation's currency.
In addition, the book underscores the social and political consequences of hyperinflation, illustrating how economic collapse can lead to the rise of extremist ideologies and the erosion of societal values. It serves as a reminder of the importance of maintaining economic stability in order to preserve social cohesion and prevent the emergence of destructive forces.
VIII. Conclusion
When Money Dies offers a comprehensive account of the Weimar Republic's hyperinflation crisis, exploring its causes, consequences, and lessons. Adam Fergusson's detailed analysis serves as a cautionary tale, reminding policymakers and citizens alike of the importance of responsible fiscal and monetary policies in preserving economic stability and social harmony.
By examining the devastating effects of hyperinflation on Germany's economy, society, and political landscape, the book highlights the potential dangers of unchecked inflation and irresponsible monetary policy. Fergusson's work remains relevant today, as countries around the world grapple with economic challenges and strive to maintain the delicate balance between growth and stability.
Your choice! At least, you have 1 post written by AI now :) Don't need more, I guess.
I haven't read the book anyway, so would be nice if someone judge this summary to be good or not!
Considering the text is static and ChatGPT is a good language model, it should give a quite nice summary, imo.
You have saved someone the work of going and generating it to start with. I'll send you 15k sats.
I am also curious to see how people judge chat gpt's summary.
I also requested The Mandibles in another post, and I think that will be harder to do because there's probably way less summary info for the Mandibles online.
Adam Fergusson elaborately explains chain of events which led to Weimar hyperinflation. Some researchers set the beginning of it in 1919 but I think that it started from 1914 along with the WWI. I placed the picture for illustration of my summary.
The value of the Fergusson book, besides of just recollection of facts about Weimar Republic may be found also in juxtaposition of similar events in Austria, Russia and Hungary.
The important thing any other summary may miss is in the sources which Fergusson references in his book. These are
How it happens : Talk about the German people 1914-1933 with Erna von Pustau
Costantino Bresciani-Turroni The Economics of Inflation: A Study of Currency Depreciation in Post-War Germany
The Great Inflation by Guttman
If you don't like much data and methodologies, you may omit Costantino Bresciani-Turroni monograph. Two others are worth reading before or after "When money Dies". The Guttman's book is apparently very rare but delightful.
"When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany" is a book written by Adam Fergusson, first published in 1975, that provides a detailed account of the economic collapse and hyperinflation experienced in Germany during the Weimar Republic period (1918-1933).
The book starts by setting the stage with the end of World War I and the signing of the Treaty of Versailles. The treaty imposed heavy reparations on Germany, which led to significant economic difficulties, including hyperinflation. The author explains how the German government initially tried to pay the reparations by borrowing heavily from foreign countries, but this strategy proved unsustainable.
As the economic situation worsened, the German government resorted to printing more money, leading to hyperinflation. The author describes how the value of the German mark decreased rapidly, with prices of goods and services increasing exponentially. People had to carry around large amounts of cash just to buy basic necessities, and many businesses resorted to bartering instead of using money.
Fergusson goes into great detail about the effects of hyperinflation on the German people, including widespread poverty, unemployment, and social unrest. He also discusses how the government and the central bank attempted to address the crisis, often with misguided policies that only made the situation worse.
The book also explores the cultural and psychological effects of hyperinflation. The author describes how people became obsessed with money and hoarding goods, leading to a breakdown of social norms and values. The middle class, in particular, suffered greatly, as their savings became worthless, and they were forced into poverty.
Throughout the book, Fergusson draws parallels between the Weimar Republic and other countries that have experienced hyperinflation, such as Zimbabwe and Venezuela. He also discusses the lessons that can be learned from the Weimar experience, including the dangers of deficit spending and the importance of an independent central bank.
Overall, "When Money Dies" is a fascinating and sobering account of one of the most extreme economic crises in modern history. The book provides a detailed analysis of the causes and effects of hyperinflation and highlights the importance of sound economic policies and institutions. It is a must-read for anyone interested in economics, history, or politics.
If you haven't read the book, how will you know the quality of the summary? I'm fine with people getting help from AI, but as I said, it will be judged by people who read the book.
I read them both you posted about.
The thing is that you encourage them not to read the books and just use the damn robot and not use their brains and hands to write it.
I also posted a bounty this morning for The Mandibles. (They say it's just a fictional When Money Dies, under the impossible scenario that the future US collapse does not impact other countries.)
I may think of a few more. I want to read "The Block size Wars", "This Machine Kills Secrets" and "Tracers in the Dark," but I don't think a summary will suit my needs... Although perhaps a summary would be handy even if I do read the whole thing.
I was thinking of soliciting summary requests and trying to turn it into a business, but I didn't go forward with that project. You could! Maybe if you made your own SN post with a list of books you would be willing to summarize, and then you could try to crowd fund it.
Fiat standard makes sense @Modus. As does the Bitcoin hitlist - agree on there being a lot of overlapping content and a lot more to learn from having all in one place.
Nice to know there's a niche demand for these things in the community, rather than the regular open-source software & podcasting content
Interesting idea, like it! Will see what I can do.
In terms of side projects, I've plenty to think about also. But keen to get back into the habit of reading. Mostly non-fiction. I have also had recommended to me 'Diamond Age' which is fictional and a long-read - but very topical at this time.
"When Money Dies" by Adam Fergusson is a fascinating and insightful book that delves into the root causes of hyperinflation in Germany during the early 1920s. Fergusson's book provides a detailed account of the disastrous effects of hyperinflation on the German economy, society, and political system. In this review, I will explore the main themes and arguments presented in the book and provide an analysis of their relevance to our modern economy. Additionally, I will provide actionable steps that can be taken to implement the principles outlined in the book in our daily routines.
The book begins with an overview of Germany's economic situation following World War I. The Treaty of Versailles had imposed harsh reparations on Germany, leading to a severe financial burden on the country. The government responded by printing more and more money to pay for these reparations and to fund social programs. The result was hyperinflation, which destroyed the value of the German currency and led to economic chaos.
Fergusson's book is particularly effective in illustrating the human impact of hyperinflation. He describes how people's savings and pensions became worthless, and how businesses struggled to survive. People had to use wheelbarrows full of money just to buy a loaf of bread. Fergusson argues that hyperinflation led to a loss of faith in the government, and ultimately contributed to the rise of the Nazi party.
One of the most interesting aspects of the book is Fergusson's discussion of the psychological effects of hyperinflation. He argues that hyperinflation creates a sense of uncertainty and instability that leads to a breakdown of social norms. People stop trusting one another and become more focused on their own survival. This breakdown in social cohesion can have long-lasting effects on a society.
Fergusson also explores the role of international finance in hyperinflation. He argues that the actions of the international financial community, particularly the French and British governments, contributed to Germany's hyperinflation. The French government demanded huge reparations from Germany, which Germany was unable to pay. This led to a cycle of inflation and devaluation that ultimately destroyed the German economy.
The relevance of "When Money Dies" to our modern economy is clear. Although we may not be facing hyperinflation on the same scale as Germany in the 1920s, many of the issues raised in the book are relevant to our current economic situation. For example, the book highlights the dangers of governments printing too much money to fund social programs or pay off debt. Inflation can destroy the value of a currency and lead to economic instability.
Fergusson's book also underscores the importance of financial education. The more people understand about money and the economy, the better equipped they are to make informed decisions about their finances. This is particularly important in a world where financial literacy is not always a priority in education.
So, what actionable steps can we take to implement the principles outlined in "When Money Dies" in our daily routines? Here are a few suggestions:
Live within your means: Avoid overspending and stick to a budget. This may sound simple, but it's one of the most effective ways to ensure financial stability.
Save money: Build an emergency fund that can help you in times of financial trouble. This can help you avoid the need to borrow money at high interest rates.
Invest wisely: Learn about investing and make informed decisions about your money. Investing can be a powerful tool for building wealth, but it's important to do your research and make smart decisions.
Diversify your portfolio: Spread your investments across different assets to minimize risk. This can help protect you against losses in any one area of the market.
Be aware of inflation: Keep track of inflation rates and adjust your financial plan accordingly. This can help you stay ahead of the curve and avoid being caught off guard by inflation. Inflation can erode the purchasing power of your money over time, so it's important to stay informed and make adjustments as needed.
Stay informed: Stay up-to-date on economic news and trends that could impact your finances. This can include following financial blogs and news outlets, attending financial seminars or workshops, and networking with other professionals in the financial industry. The more you know about the economy and financial markets, the better equipped you'll be to make smart financial decisions.
Invest in assets that hold their value: Consider investing in assets that have historically held their value during times of economic uncertainty. This can include gold, real estate, and other tangible assets. By diversifying your investments in this way, you can help protect your portfolio against inflation and other economic risks.
Investing in assets that have historically held their value during times of economic uncertainty is an important step in protecting your portfolio against inflation and other risks. There are many different types of assets that can serve as inflation hedges, including gold, real estate, and other tangible assets. In recent years, however, a new asset has emerged as a potential hedge against inflation: Bitcoin.
Bitcoin is a digital currency that was created in 2009. It is based on a decentralized network of computers, which allows for peer-to-peer transactions without the need for a central authority. Bitcoin is often referred to as a "digital gold" because it shares many of the same characteristics as gold, such as scarcity and the ability to act as a store of value.
One of the key features of Bitcoin is its limited supply. There will only ever be 21 million bitcoins in existence, which makes it a scarce asset. This scarcity is similar to that of gold, which also has a limited supply. This limited supply has contributed to Bitcoin's reputation as a potential hedge against inflation.
Inflation occurs when the supply of money in an economy increases faster than the supply of goods and services. This can lead to an increase in prices, which can erode the purchasing power of currency. Because Bitcoin has a limited supply, it is not subject to inflation in the same way that traditional currencies are.
In addition to its limited supply, Bitcoin is also decentralized, which means that it is not controlled by any government or central authority. This can be appealing to investors who are looking for an asset that is not subject to government manipulation or interference.
However, it's important to note that Bitcoin is a highly volatile asset, and its price can fluctuate significantly over short periods of time. This volatility can make it a risky investment, and it may not be suitable for all investors.
When considering whether to invest in Bitcoin as an inflation hedge, it's important to do your research and understand the risks involved. Bitcoin is still a relatively new asset, and its long-term prospects are uncertain. Some experts believe that it has the potential to become a mainstream investment asset, while others are more skeptical.
It's also important to consider how Bitcoin fits into your overall investment strategy. While it may serve as an inflation hedge, it should not be the only asset in your portfolio. Diversification is key to reducing risk and achieving long-term financial goals.
In conclusion, Bitcoin is a relatively new asset that has the potential to serve as an inflation hedge. Its limited supply and decentralized nature make it an attractive option for investors who are looking for alternatives to traditional assets like gold and real estate. However, it's important to understand the risks involved and to consider how Bitcoin fits into your overall investment strategy.
Create a financial plan: Develop a comprehensive financial plan that takes into account your long-term goals, risk tolerance, and other factors. This can help you stay on track and make informed decisions about your money.
Consider professional financial advice: If you're unsure about how to implement the principles outlined in "When Money Dies," consider seeking professional financial advice. A financial planner or advisor can help you develop a personalized financial plan that takes into account your unique needs and circumstances.
In conclusion, "When Money Dies" is a thought-provoking and insightful book that offers valuable lessons for anyone interested in economics or personal finance. By understanding the root causes and effects of hyperinflation, we can take steps to protect our own finances and help ensure a stable economic future for our society. By following the actionable steps outlined above, we can implement the principles outlined in the book in our daily routines and build a secure financial future for ourselves and our families.
When Money Dies (written by Adam Fergusson) explores the devastating hyperinflation that occurred in Germany during the early 1920s. Fergusson uses a combination of historical research, personal accounts, and anecdotal evidence to paint a vivid picture of the social, economic, and political upheaval that resulted from this catastrophic event.
The book begins by describing the state of Germany after the First World War. When the country was left in ruins, with its economy in shambles and its people struggling to survive. The govenment, led by the Weimar Republic, was burdened with crippling debts and faced immense pressure from both foreign creditors and domestic political groups.
As a result, the government decided to print vast amounts of fiat money in order to finance its operations and pay off its debts. At first, this seemed to work. The economy began to recover, people had money to spend etc. However, as more and more money was printed, inflation began to spiral out of control.
Thus the value of the German mark began to plummet, and prices for goods and services skyrocketed. People soon found that their savings were worthless, and they had to spend their money as quickly as possible before it lost its value entirely. This led to a situation where people would rush to spend their money as soon as they received it, creating an economy that was chaotic and unpredictable.
The book describes many different ways in which hyperinflation affected the German society. People had to carry their money in wheelbarrows just to buy basic necessities, and prices for goods and services could change multiple times in a single day etc.
Because of this the Weimar Republic lost credibility in the eyes of the German people, who blamed the government for their economic problems. This created a fertile ground for extremist political groups, such as the Nazi Party, to gain support and eventually come to power.
Throughout the book, Fergusson emphasizes the human toll of hyperinflation. He describes the stories of ordinary Germans who lost everything and were forced to live in poverty and despair. He also highlights the heroic efforts of individuals who worked to mitigate the effects of hyperinflation, such as the people who set up barter networks or the government officials who tried to stabilize the currency.
So all in all, When Money Dies is a reminder of the dangers of hyperinflation and the problems all nations will suffer at some point, when they don't move to a Bitcoin Standard.
When money dies is the classic history of what happens when a nation's currency depreciates beyond recovery In "1923", with its currency effectively worthless (the exchange rate in December of that year was one dollar to 4,200,000,000,000 Marks). The German republic was all but Reduced to a barter economy.
So, apparently, we have this book called "When Money Dies" which talks about Germany's hyperinflation from 1921 to 1924. Big whoop, right? It's just another forgotten history lesson that nobody gives a damn about. The author goes on and on about how the Treaty of Versailles, political instability, and Germany's central bank's actions led to the hyperinflation crisis. Oh, and let's not forget how it affected German society and businesses. Blah, blah, blah. And, of course, the author has to preach about sound monetary policy and political stability like he's some sort of saint. Give me a break. As if policymakers and governments care about a ridiculous book that warns them about the dangers of unchecked inflation and irresponsible monetary policy. Who cares about the people? Let's just print more money and party like it's 1924. The plebs can eat cake if they get hungry.
"When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany" by Adam Fergusson is a sobering account of the economic collapse that occurred in Germany in the early 1920s. Fergusson's book is a fascinating read for anyone interested in economics, history, or politics.
The book chronicles the rise and fall of the German mark, the country's currency during the Weimar Republic. The Weimar Republic was established after World War I, and Germany was saddled with a massive debt burden as a result of the war reparations imposed by the Treaty of Versailles. In an effort to pay off this debt, the German government turned to the printing press, and began to print large quantities of money.
At first, this policy seemed to work. The government was able to pay off its debts, and the economy began to recover. However, as the printing presses continued to run, the value of the mark began to decline rapidly. Soon, prices began to rise, and the German people began to lose faith in their currency.
Fergusson's book is an excellent account of the events that led to hyperinflation in Germany. He explains the economic policies that were pursued by the government, and the consequences of these policies for the German people. He also provides a vivid portrait of the social and political unrest that was caused by hyperinflation, and the rise of extremist political movements.
One of the strengths of Fergusson's book is its accessibility. He presents complex economic concepts in a clear and concise manner, making the book accessible to readers who may not have a background in economics. He also provides a wealth of historical detail, painting a vivid picture of life in Germany during the hyperinflationary period.
Another strength of the book is its relevance to contemporary economic issues. Although the events described in the book took place almost a century ago, the lessons of hyperinflation are still relevant today. Fergusson's book is a cautionary tale about the dangers of deficit spending and the printing of money. It serves as a reminder that governments must be vigilant in their economic policies, and must be willing to make difficult choices to ensure the long-term stability of their economies.
Fergusson's book is not without its weaknesses, however. One of the criticisms that has been leveled against the book is that it focuses too narrowly on the economic policies of the Weimar government, and does not take into account the broader political and social context of the time. Some critics argue that the rise of extremist political movements in Germany was not solely the result of economic factors, but was also influenced by a variety of social and political factors.
Despite these criticisms, "When Money Dies" is an important book that provides a valuable insight into the dangers of hyperinflation. It is a well-written and engaging account of a crucial period in German history, and it serves as a cautionary tale for policymakers today. The lessons of hyperinflation are still relevant, and Fergusson's book is a valuable reminder that economic stability is a fragile thing, and must be protected at all costs.
"When Money Dies" is a non-fiction book written by Adam Fergusson and first published in 1975. The book describes the economic collapse of the Weimar Republic in Germany from 1918 to 1923, and how hyperinflation destroyed the country's currency and economy.
The book begins by describing the situation in Germany after World War I, where the country was heavily burdened with war reparations and faced political turmoil. The Weimar Republic government, under the leadership of Chancellor Gustav Stresemann, began a program of monetary stabilization and fiscal reform. However, despite these efforts, the German economy continued to struggle due to a number of factors including inflation, political instability, and social unrest.
As the situation worsened, the Weimar government began printing more money to pay its bills, leading to hyperinflation. Prices skyrocketed, and the value of the German mark plummeted. People were forced to carry wheelbarrows of money just to buy basic goods, and many lost their life savings as the currency became increasingly worthless.
The book describes the impact of hyperinflation on various aspects of German society, from the middle class to the working class, and from the elderly to the young. It also examines the role of international financial institutions, such as the Bank of England and the League of Nations, in attempting to address the crisis.
Throughout the book, the author emphasizes the human toll of hyperinflation, describing the hardships and suffering of ordinary people, as well as the political and social consequences of the crisis. The book also provides insights into the psychology of hyperinflation, describing how people reacted to the crisis and how it affected their attitudes towards money, wealth, and power.
In the final chapters, the book examines the lessons that can be learned from the Weimar hyperinflation, and the implications for other countries facing similar economic challenges. The author argues that the crisis in Germany was not just a result of economic factors, but was also influenced by political and social factors, and that it serves as a cautionary tale for other countries facing economic instability.
In summary, "When Money Dies" is a detailed and vivid account of the hyperinflation crisis that occurred in Germany during the early 20th century. The book provides valuable insights into the causes and consequences of hyperinflation, as well as the psychological and social impact of such crises on individuals and society as a whole.
✍️ Summary
📖 Importance of reading
😢 Who Lost
😅 Who Benefited
😠 Effects on Society
🔽 Reduced Bankruptcies & Perverse Incentives
👨👩👧👦 Stories from People
💰 Scale of Devaluation
🚫 Capital Controls
🧻 Stability then created Unemployment
🤑 Want more?