|Weimar Debt Chart|
Source : www.nowandfutures.com/weimar.html
|US Debt Chart|
Source : www.brillig.com
• High prolonged unemployment.
• Both the United States and 1920's Weimar Germany have operated with huge budget deficits and huge deficit spending.
• 40% of every dollar the US Government spends today is borrowed, while at the time Weimar's Government was borrowing 50% to support its costs.
• Both have kept interest rates way below the rate of inflation.
• Both creating rapidly increasing money supplies
Increasing the money supply is one of the most devastating factors in the creation of hyperinflation. Central Banks such as the US Federal Reserve are responsible for the creation and distribution of the paper currency they print. This 2-way responsibility creates an unbalanced supply and demand for printed money or fiat currency. With products and services attaining minimum growth at best, they do not match the "additional" amount of printed money, so the intrinsic value of this excessive money supply decreases.
Just as Weimar Germany had done many years ago, the Federal Reserve has been creating new money too, out of thin air. More recently during the last two "quantitative easing" bond buying schemes, operation twist and international dollar swaps programs with foreign central banks. Soon most likely, round three of the quantitative easing program will be coming out from the Fed. This money creation is done through speculative bets on the books of private banks; furthermore it produces nothing of value for the US Economy...Read More