[crz]

Tell that to the Germans who lived prior to Hitler gaining power.

It took a bushel of money to buy a loaf of bread. It got so they let workers out of work at noon each day to spend their money to get that money back in the system.

The result? Hitler took power and the rest is history.

I shudder at the thought.

[UnbelievingScumOnTheOtherSide]

It took a bushel of money to buy a loaf of bread. It got so they let workers out of work at noon each day to spend their money to get that money back in the system.

“I’m so sorry dear child, but you can no longer have 3 gumballs for a dollar, but I can give you two.”

International exchange and relative domestic purchasing power are two different things. Because the domestic purchasing power of the dollar has not fallen with the exchange rate, american products and tourism become more attractive. That would not be the case if euros bought more dollars and US prices inflated commensurately.

The German situation was inflation driven (due to extreme loss of gold backing which was used to pay war reparations), not exchange rate riven.

The gumball example, if analogized to international trade, is an illustration of the effect of exchange rates on gumball exports. The gumball exporter will be stuck chewing his own inventory until there is a correction.

[Liaison]

Germany was in hyperinflation because of war debt to the french and sanctions imposed on Germany by the allied powers, and the closing of war industries by treaty. You can’t compare the Fall of the Dollar to the German Mark after “War to end all Wars.”