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It’s Worse Than You Think
It’s Worse Than You Think
New York City police officers guard Trump Tower, President-elect Donald Trump’s Manhattan home. (Richard Drew / AP)
Widespread social unrest will ignite when Donald Trump’s base realizes it has been betrayed. I do not know when this will happen. But that it will happen is certain. Investments in the stocks of the war industry, internal security and the prison-industrial complex have skyrocketed since Trump won the presidency. There is a lot of money to be made from a militarized police state.
Our capitalist democracy ceased to function more than two decades ago. We underwent a corporate coup carried out by the Democratic and Republican parties. There are no institutions left that can authentically be called democratic. Trump and Hillary Clinton in a functioning democracy would have never been presidential nominees. The long and ruthless corporate assault on the working class, the legal system, electoral politics, the mass media, social services, the ecosystem, education and civil liberties in the name of neoliberalism has disemboweled the country. It has left the nation a decayed wreck. We celebrate ignorance. We have replaced political discourse, news, culture and intellectual inquiry with celebrity worship and spectacle.
Fascism, as historian Gaetano Salveminipointed out, is about “giving up free institutions.” It is the product of a democracy that has ceased to function. The democratic form will remain, much as it did during the dictatorships in the later part of the Roman Empire, but the reality is despotism, or in our case, corporate despotism. The citizen does not genuinely participate in power.
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When Money Dies
When Money Dies
“When Money Dies” is the title of a 1975 book by Adam Fergusson, in which he describes the downfall of the Reichsmark in Weimar Germany. A fascinating look at that period of history, one can glean quite a few useful pieces of advice on how to survive a currency crisis. But “when money dies” could also describe the current currency crisis in Greece, in which many Greeks seem to have taken those lessons from Fergusson’s account of the Weimar hyperinflation to heart.
Even though the Greek currency crisis isn’t a traditional hyperinflationary crisis, many Greeks are trying to get their hands on, and then spend, cash. One of the fears is that bank depositors will be forced to take losses on their accounts, the so-called “haircut”. This happened in Cyprus to some larger depositors, but the fear in Greece is that people with even just a few thousand euros in their accounts might be forced to take losses of 30-50% or more. Just imagine that you have $10,000 in your bank account and overnight the government says, “Sorry, your account balance is now $5,000.” Overnight, the purchasing power of your bank account has been cut in half.
So even though the government isn’t printing more money (yet!), the fear of a 50% devaluation of the purchasing power of bank accounts is causing Greeks to line up at ATMs to withdraw money. And because there is the additional fear that Greece may exit the euro, with unknown consequences, many people seek to convert their euros into tangible goods. Shoes, handbags, refrigerators, gold, jewelry, anything that can maintain value and be resold or bartered is fair game for those desperate not to lose all of their hard-earned savings.
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When Money Dies: Germany and Paper Money After 1910 – Marcia Christoff-Kurapovna – Mises Daily
When Money Dies: Germany and Paper Money After 1910 – Marcia Christoff-Kurapovna – Mises Daily.
The story of the destruction of the German mark during the hyper-inflation of Weimar Germany from 1919 to its horrific peak in November 1923 is usually dismissed as a bizarre anomaly in the economic history of the twentieth century. But no episode better illustrates the dire consequences of unsound money or makes a more devastating, real-life case against fiat-currency: where there is no restraint, monetary death will follow.
“It matters little that the causes of the Weimar inflation are in many ways unrepeatable; that political conditions are different, or that it is almost inconceivable that financial chaos would ever again be allowed to develop so far,” wrote British historian and MP Adam Fergusson in his 1975 classic, When Money Dies. “The question to be asked — the danger to be recognized — is how inflation, however caused, affects a nation.”
The US Federal Reserve of 2014 is not the Reichsbank of 1914. Yet today’s policy mindset is dangerously reminiscent of the attitudes that helped to excacerbate the economic downfall of inter-war Germany. These include: the unrestrained financing of budget deficits under war and post-war conditions; the unaccountable creation of the money supply by a central bank; the creation of undisciplined credit linked to this expansion of the money supply; the aggressive inflating of asset values; the discounting of short-term treasury bills and notes in practically unlimited amounts; rapid currency depreciation, and a ratio of federal debt to GDP over 100 percent.
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