Posted on 08/31/2011 10:27:09 AM PDT by Veritas_et_libertas
"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens."
"Lenin was certainly right," John Maynard Keynes continued in his 1919 classic, "The Economic Consequences of the Peace."
"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."
Keynes warned that terrible hatreds would be unleashed against "profiteers" who enriched themselves through inflation as the middle class was wiped out. And he pointed with alarm to Germany, where the mark had lost most of its international value.
By November 1923, the German currency was worthless, hauled about in wheelbarrows to buy groceries. The middle class had been destroyed. German housewives were prostituting themselves to feed their families. That same month, Adolf Hitler attempted his Munich Beer Hall Putsch.
Today a coterie of economists is prodding Federal Reserve Chairman Ben Bernanke to induce inflation into the American economy.
Fearing falling prices, professor Kenneth Rogoff, former chief economist for the International Monetary Fund, is pushing for an inflation rate of 5 to 6 percent while conceding that his proposal is rife with peril and "we could end up with 200 percent inflation."
(Excerpt) Read more at humanevents.com ...
It's also fun to guess how he will subtly justify his hero this time.
[ Fearing falling prices, professor Kenneth Rogoff, former chief economist for the International Monetary Fund, is pushing for an inflation rate of 5 to 6 percent while conceding that his proposal is rife with peril and “we could end up with 200 percent inflation.” ]
Then don’t print more money you dumb SOB!
Anyways never trust the opinion of anyone who ever worked for the IMF.
The goal is to enhance liquidity as cheaply as possible - is liquidity worth 5 or 6 cents per dollar?
That's the question, and the answer may well be no.
Also, to call this article's analysis of Weimar hyperinflation simplistic would be too kind. In fact calling it "analysis" is too kind.
This Keynes/Lenin quotation has been posted several times during the past few weeks in FR discussions about the misuse of paper money and the Founders' constitutional money system to protect liberty.
Keynes was cited, along with several of Thomas Jefferson's strong statements on the subject:
The following are a few remarks on the subject from "Our Ageless Constitution". Dr. Edwin Vieira, who is a contributor to that volume, also has published extensively on the Founders' protections for liberty through their provisions for a sound money system. A search of his books and other writings might be interested in pursuing this subject.
Thomas Jefferson: "Paper is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted."
". . . although the other nations of Europe have tried and trodden every path of force or folly in fruitless quest of the same object, yet we still expect to find in juggling tricks and banking dreams, that money can be made out of nothing. . . The misfortune is. . . we shall plunge ourselves in unextinguishable debt, and entail on our posterity an inheritance of external taxes, which will bring our government and people into the condition of those of England, an nation of pikes and gudgeons, the latter bred merely as food for the former."
"Stock dealers and banking companies, by the aid of a paper system [paper money] are enriching themselves to the ruin of our country, and swaying the government by their possession of the printing presses, which their wealth commands, and by other means, not always honorable to the character of our countrymen."
Then there is John Maynard Keynes observation in "The Economic Consequences of the Peace - 1920":
"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. . . . Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. . . . (It) does it in a manner which not one man in a million is able to diagnose. . . ."
Mentioning Hitler -
And why not?
Mein Kampf is a must read for everybody.
It’s a playbook for the socialists.
I’d say not one in a thousand Americans living today
has read it. I have a friend with a double Master’s
who has not read it.
A lot of what AH said is true. For instance:
A race (more narrowly meaning “nation” in those days) does not
deserve to exist if it won’t fight to defend itself.
With this statement he justifies the “Warsaw Uprising” nearly
two decades later.
Take that into the context of today’s Mexican Invasion.
And into context of Israel’s stand against the forces of Satan.
I’ve got a fair number of degrees myself, but I don’t really think Mein Kampf is likely to make my reading list. The meanderings of a deranged madman are not what I see to be a good use of my time. I could in theory read Das Kapital as well, but again, reading the words of someone who was dead wrong and the source of immense evil for mankind doesn’t offer any appeal to me. Better that I read the works people who have made real contributions to the knowledge of mankind.
You know, Smith, Aristotle, Von Mises, Hayek, Sowell, Churchill, and many others who didn’t actually promulgate harm.
I’ve only got so much reading time. I’m not about to waste it.
Good post. Inflation is the way nations pay for war and government waste. Inflation is indeed a hidden tax. $500 per year was sufficient to pay for college in a private college after WW II. Today I could not even venture a guess. Starting pay for business graduates was $2500 per year. Today they are lucky to get a job and with a mountain of debt to repay. Yesterday’s savings are wiped out.
Without jobs we won’t be able to inflate today. Today the worst case is to reduce our standard of living so we can compete with the world. God Help Us.
Probably because he can't help talking about the guy at every opportunity and because he always mentions him in a way that is either ambiguous or subtly supportive.
Mein Kampf is a must read for everybody. It’s a playbook for the socialists.
Not only is the book horribly written, utterly tedious, lacking in any intellectual merit, and twenty times longer than it needed to be for its purpose - it is not a "playbook."
It contains almost zero in the context of a practical program and almost no social or economic analysis.
It's one long, formless rant by a pedestrian mind.
A race (more narrowly meaning “nation” in those days) does not deserve to exist if it won’t fight to defend itself.
Rasse does not mean Nation or even Volk - it meant biological race in 1920s German as it does in 2010s German.
There is no real insight to be gained from this book, other than observing the talismanic effect a valueless screed can have on the likeminded.
Ah, but consider who is in the White House, and how many voted for him. Understanding that "talismanic effect a valueless screed can have on the likeminded" is utterly crucial for a free people to stay free.
Just because something is revolting, doesn't mean it doesn't need to be studied carefully and understood thoroughly. In fact, a premise could be entertained that the more revolting the subject, the more crucial it is to completely comprehend it, as it's very horror demands it never be able to manifest unawares.
Consider the control of sewage.
Controlling collectivism is the same idea.
You don't want to screw up either one, or you end up covered in sh!t, disease and death.
“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency”
I hasten to point out that Lenin’s destruction of Russia’s currency was, like most Communist endeavors, as much a matter of incompetence as malice.
“The goal is to enhance liquidity as cheaply as possible - is liquidity worth 5 or 6 cents per dollar?”
I’d say liquidity (or, coming at it from the other side, the propensity to save) isn’t worth anything by itself; it depends upon what is the demand for capital goods, which depends on their expected return, which depends on consumer demand, which depends on a whole host of things. The point is, like every other dang thing, it’s a matter of the market. Sadly, we can’t much figure out what the market interest rate is, given—in addition to every other distortion—there is no free market in money.
What gets lost, and what I’d like to point out, is the Forgotten Man/Broken Window Fallacy of the liquidity. We can think of it in terms of policy and “social utility,” or whatever. But what we’re really talking about is yet another wealth transfer program. When the government conspires through the Fed to increase liquidity, where does the extra money come from? Why, savers, of course. Know that when you advocate forced liquidity you are advocating taking money from people who earned it to other who didn’t.
In case that leaves you indifferent, as you imagine savers are stuffy old misers, let us come to the proverbial Forgotten Man, i.e. he who would have benefitted from the saver’s monmey had it not been redistributed via the machinations of the state. He may not have gotten it soon, as per your concerns people are holding onto money and liquidity is low. But that money will find its way into the system eventually.
Whether it could be put to better use now or later, I leave to history. Has pumping money into losing concerns with long periods of production and little or no customer base, as in today’s housing industry, ever worked? What are the odds that redistributing money from savers to spenders will result in the money finding currently profitable concerns, or better outlets for future earning?
“The goal is to enhance liquidity as cheaply as possible - is liquidity worth 5 or 6 cents per dollar?”
To clarify, when I say “you” I don’t necessarily mean you, wideawake. I’m just addressing those who might not realize that when we weigh alternatives as above, we’re not talking about whether 5 or 6 cents per dollar (as you frame it) is worth it to all of us, nor worth it to some set of people who are making decisions about their own money. We’re talking about whether it’s worth it to basically tax some people, but not others, to gain what we can from 5 or 6 cents on the dollar.
“it is not a ‘playbook’”
That’s an odd thing to say, considering how closely he followed it once in power.
That has an actual - sometimes quantifiable - value in and of itself.
I can own a million-dollar property, but if I cannot sell it for a million dollars quickly, and I need cash quickly, I will have to pay for the liquidity by selling the property for less than a million.
Also, just because he acted on the emotional darkness in the book does not mean that it is a playbook.
It makes sense in retrospect that someone with his irrational hatreds would fashion the Nuremberg Laws - but the book contains no detailed program for such laws, just a picture of the rage that motivated them.
Bump for the rest of the Abe Foxmans shout down brigade.
The plain truth of the matter is the federal debt can never be repaid from revenues.
The only to repay the debt is to inflate it away. A combination of pure and ancillary inflation are the only way.
My guess has been 7% as the highest tolerable level. This rate compounded and accompanied by increased taxes on inflated wages will reduce the present debt in something less than 10 years.
Love it or hate it, inflation is assured. The only question is can the rate be controlled to a tolerable level.
Your buddy can’t help mentioning the guy every five minutes. That isn’t Abe Foxman imagining things, it’s just an entertaining Buchanan feature.
There is another question and that is: should the rate be controlled?
———should the rate be controlled?-——
Interesting thought. I can’t say.
It is the government and they like control. They fear things getting out of hand
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