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Message: Weimar Repeat?

Weimar Repeat?

posted on Oct 19, 2009 05:54PM

We should all remember that during the hyperinflation that occured in Weimar Germany, those who did best in the early stages were those in unions who could organize and demand higher wages, which worked for awhile. Government employees who were able to take advantage of the inflation before anyone else and farmers who could sell there wares to other countries.

As the hyperinflation continued, all of these groups eventually lost any advantage over others as the purchasing power of the currency collapsed far faster than any pay raises could adequately compensate for. The farmers lasted the longest, as long as they could sell outside of Germany, which got harder and harder as infrastructure collapsed.

Those who maintained their purchasing power the best were those who had family members working in a foreign country and thus an income stream from say, France or England or even America. It appeared to those within Germany that these currencies were strengthening against the Mark. In reality, as we now know, the Mark was constantly losing value against everything else.

Those with a foreign income stream or gold or silver, saw their purchasing power not only remain stable, but increase exponentially. Many Jews and French who had Francs or gold made a very unfortunate mistake of in some ways flaunting their wealth. The disgruntled and suffering German populace did not take kindly to French college students buying apartments with their weekly allowance, but such things happened. I think we should all be aware, for perhaps future reference, that when one can buy another man's house with his weekly foreign spending money, it is not always a good idea to do so, or to do so in broad daylight.

True, there was a long history of strained relations between Jews and Gentiles in Germany, but seeing wealthy Jewish businessmen throwing lavish parties was not a sight that Hitler's followers took too kindly to. Keep this in mind. Brown shirts have not disappeared forever. Do not be a target.

This is the point of the matter, however: We own shares in a Canadian company. Your Kimber shares are redeemable in Canadian dollars. As the Canadian dollar continues to strengthen against the U.S. Dollar, your wealth will increase in a like manner, and this will protect you from inflation and certainly hyperinflation. This might be difficult to understand for someone who has never lived through hyperinflation, but a $5000 Kimber investment, might end up paying off your entire mortgage, given the right conditions.

Personally, I think the survivalist crowd is incorrect in its gloomy estimation of the future of this country. There wil be civil unrest, but society will not collapse. Martial law may occur, but whatever it does will peter out. There's just not enough money in it. Nobody robs the beggar in the street. America is broke. The process of converting as much paper wealth to gold and silver is well on the way, but the people doing it are going to take all their business to China where they can find a very healthy, skinny, hungry populace to make good use of their capital.

America is essentially a shell at this time. A great leader may rise up in a generation's time. America might recapture it dominance as a creative and manufacturing entity, and capital will return. But who wants to invest or dominate a bunch of fat people spending Chinese money to line their cars up at the drive through window. Their sons wear earrings. Their daughters have belly-button rings. They worship television and the Lottery is their biggest thrill. Who wants to conquer and dominate that?

Just some things to think about... Bull

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