The Nightmare of Hyperinflation is Coming

Our Bangkok correspondent H. Numan extrapolates from our present fiscal woes to something more grievous and possibly terminal.

The nightmare of hyperinflation is coming

by H. Numan

He who doesn’t learn from history is doomed to do it all over again. We haven’t learned a lot from history, and are going to make the same mistakes. However, history never repeats itself. It’s always different. One of the reasons is that people tend to look at history, and think: ‘I wouldn’t have done that. How stupid!’ That’s looking back with 20/20 hindsight. You know the problem, and know what didn’t work back then. Most people think our ancestors were really stupid and they themselves are very smart. No, they weren’t, and you aren’t.

We’re about to make the same mistakes all over again. The current dogma is that Hitler was extreme right-wing and the treaty of Versailles was too harsh. Both assumptions are wrong. Disastrously wrong, as you will find out.

Let’s start with Hitler. He didn’t come out of thin air. He became politically active in 1919. Hitler wasn’t extreme right-wing; he was a socialist. His ideas, many of them, were mainstream in Germany at the time. The Germany army started planning rearmament right after (probably before) signing the treaty of Versailles. All Hitler did, once he gained power, was to speed it up and drop any pretenses. All Germans into a greater Germany (‘Heim ins Reich’) was something every German wanted, left and right. The German army was already planning to conquer the east in the future. That’s why they didn’t have a problem with Hitler’s Lebensraum policy. At first together with Poland, only later they switched to conquering Poland first. Before attacking the USSR, that is. Either way, large swaths of Poland were originally German. They would have reconquered it anyway. With or without Hitler.

Hitler himself was a racist communist. Not my words. His own words. He wrote in Mein Kampf, pages 406-407, that National Socialism differs from Communism only in its racism. Take away racial ideology from Nazism, and you’ve got communism.

Now the treaty of Versailles. World War One ended in three treaties: Versailles (Germany), Trianon (Austria-Hungary) and Lausanne (Ottoman empire). The treaties of Trianon and Lausanne were really harsh. They literally drew and quartered those empires into little pieces. Versailles was as lenient as it could be. Germany lost some territory, had to pay a steep penalty and was restricted in her armed forces. Compared with the other treaties almost a slap on the wrist. Don’t forget the Allies made huge sacrifices. Settling for anything less was not possible; their electorates would never have accepted that.

On the other hand — something not only the Germans tend to overlook — we have the treaty of Brest-Litovsk (March 3, 1918), which ended the war on the Eastern Front in favor of Germany. That was a real diktat. It was harsh to the max, so harsh that the USSR didn’t want to sign it. Kein Problem, said the German army. Then we simply go on. So they did, and added more demands. The USSR understood they had two options: take it or leave it. They took it. If you are merciless yourself, you can’t ask for mercy.

What you probably don’t know is that Germany, long before the war began, had the most developed welfare state of the time. Not only that, the German parliament was predominantly left-wing, with very strong labor and communist parties. They didn’t have any influence, mind you. Bismarck started with social laws, so they couldn’t. Not because Bismarck was a socialist, far from it. Better to give a little now instead of being forced to give more later on was his policy.

The German plan was to saddle the Allies with massive demands and make them pay for the war, plus a little extra. The problem was they lost that war. Experts have calculated they couldn’t make any profit out of the war. The costs were simply too high. Just like the Allies in the Versailles treaty, they would have to settle for something more realistic. However, that is moot. They lost. The result was a very expensive welfare state and massive war debts.

The new German republic had equal parliamentarian representation, with usually a left-wing majority. Many parties were represented, some big, most small. The result was many coalition governments that rarely lasted a full term (something like Italy today).

In 1923 the German socialist government intentionally created hyperinflation. The current dogma explains why: The treaty of Versailles was too harsh; they simply couldn’t pay otherwise. That is woefully naïve. The war debts had to be paid in gold or foreign currencies. Not in (paper) marks. Makes sense. Otherwise they could have sent the son of a ministerial janitor to pay for the entire war debt out of his allowance, and have him demand change.

The real reason was very different. By creating hyperinflation they could pay off all internal (not foreign!) debts at once. It socialized everything; everybody became equally poor. And best of all: hyperinflation comes with a get-out-of-jail-free card! You socialize your society, and nobody gets arrested. Two birds with one stone.

See the resemblance with today? All Western governments are either outright socialist or have a very strong socialist opposition. The directors of the central banks and the IMF are all socialists. Perhaps not all of them, but those who really matter are. Hyperinflation is not the first instrument they will use, and not only socialists created hyperinflation. However, hyperinflation does tend to rear its ugly head far more often in socialist states. Yes, even the Argentinean hyperinflation. That came as a response to the socialist Peron era. Mugabe? Supported by the Chinese from the moment he started. Socialists use it intentionally, non-socialists because they are either crooks and/or economic ignoramuses.

Most important for you to realize is that the current directors of the important central banks are socialists, like those in the Weimar Republic, and face almost exactly the same problems. Their solutions will be the same. Not because they lack intelligence, imagination or qualifications.

At this moment we are at the beginning of a world economic crisis surpassing the 1929 Crash by an order of magnitude. It’s bad, you think? You ain’t seen nothing yet, buddy! Please believe me: it will get a LOT worse this year and next year.

Most service industries have been hit very hard by the Chinese Virus pandemic. I refuse to call it Corona, as it was almost certainly created in a Chinese lab with lax quality and security controls. There are very strong indications it came from there, not from eating a bat. China is notorious for lack of security and quality — the only indestructible things they create are viruses. The Wuhan virus isn’t the first one coming from there. My I remind you of SARS? Even the Black Death originated in China. Of course we can’t blame the Chinese government for the latter.

Everything related to airplanes and flying worldwide is in deep trouble. Many airlines are on the brink of collapse or have already. Thai International will declare bankruptcy very soon. KLM isn’t doing that well either, though it will probably survive. The cruise industry will collapse later this year. Yes, the entire industry. The horeca (hotel, restaurant, cafe) industry is on the brink of collapse in most countries.

In Thailand it already has. Most hotels are closed permanently or at least are boarded up. Even if today the all-clear were to be given, it is highly doubtful it could recover. Many coach companies and tour companies have shut down or found something else to do. Recovery will take many years. And only if unrestricted travel is allowed — which won’t happen. Thailand is in a tough spot here: most tourists come from afar. Wearing a mask for 12+ hours nonstop plus a week (currently two weeks) of strict quarantine will not attract many holidaymakers.

The all-clear will definitely not be given. Not any time soon. Perhaps by the end of the year, at the very earliest. We sailed relatively unscathed through the first period, but the Indian variety changed that. Infections are now in the thousands, and deaths in the hundreds. Not as bad as in other counties, but still very bad. The government was planning to lessen the security measures, but now they’re strengthening them. Any idea of reopening before October is completely out of the question. Even that is wishful thinking, I’m afraid. More likely somewhere far into 2022.

In both the EU and in America we have socialist governments hell-bent on spending. Due to, among other things, the theories of (socialist!) John Maynard Keynes. Yes, in times of trouble it can be a good idea to toss in public money. However, that money must be paid back. Something most governments, certainly socialist governments, aren’t particularly keen on.

Now, that Keynes wasn’t a very good economist in my book. He invested himself heavily in … Weimar Germany. The hyperinflation came as a big surprise to him and wiped out most of his investments. Something you don’t expect from a professional economist. Certainly not of his standing. In Wikipedia he is praised. He didn’t lose any money in the Crash of 1929, after all. What they ignore is that he didn’t have any money left to lose. He had already lost it.

Both the US and EU governments want to spend enormous amounts of money on insane prestige projects. The Biden administration gives every US citizen a pittance to ease their suffering. While both Biden and the EU spend trillions on asylum seekers and the environment. Neither government is willing to scale down their prestige projects. Just like Weimar Germany.

Consumer prices are at the moment stable. However, prices of raw materials worldwide are rising. Timber, steel and grain prices in particular are on the rise. Not oil, but that comes mainly from worldwide lockdowns. You can’t travel by car or plane. Shipping is at an all-time low.

That will change, once the situation improves, later this year. By then consumers will go out and spend their money all at the same time. Which will create huge demand with little supply. That automatically creates high prices. Supply will stagnate, as the world economy has to restart. No government is capable of controlling prices, though all of them have tried that in the past.

The only way to postpone the inevitable is to print more money. Postpone, mind you. That’s all they can do. The crisis of 1929 in the US was not solved by the New Deal. It eased the suffering somewhat, at the price of a much longer crisis. In Germany at that time Heinrich Brüning was chancellor. His policy was the exact opposite of what Roosevelt did: stop government spending as much as possible, fire civil servants and reduce social welfare. Oh, before I forget: The German economic crisis started in 1923, not in 1929. That one only made their existing crisis much worse.

The electorate didn’t like that. Nor will the electorate today like it. No matter what, voters will invariably vote for (perceived) long-term less painful rather than for short-term painful solutions. Then and now. In both cases with good reason. Most people are poor. Yes, even you. Unless you make more than half million a year, you are not even middle-class. We poor have to accept what we are offered. We never get more, always less.

Governments rescuing the economy with public money can work, at the price of high inflation. You need very strong monetary frugal governments do to that and keep the situation under control. Even then, you spread out the misery over many more years. That’s why Brüning tried to rip off the band-aid in one go. And why he was voted out of office in mere months. He was very soon afterwards replaced by a (national) socialist named Hitler.

How was Hitler able to revive the economy? Simple. By stealing money. First from the Jews and his political opponents. Later on, by stealing it from other countries. The first victim was Austria. The next one Czechoslovakia. The rest is history.

Oh, another little gem for you. Big corporations did not support Hitler. His voters (the working class with jobs) did that. They had to pay for membership (naturally) and also for attending meetings, schooling and seminars. The Communists did not and could not do that. Their voter base was the working class without jobs. They had more supporters, but no money. Even though the fees the NSDAP levied that way were not high, it was more than enough to gain them political power.

Mind you, Hitler wasn’t crazy. He simply had no other options. First he (ab)used the money from the working class to get into power. To keep it, he had to conquer other nations. So he could keep paying for his welfare state. Until he ran out of other states or resources. He ran out of both.

It is possible wiser heads might prevail, though I doubt that very much. Later this year we’re going to see inflation rising. That is a certainty. Given the fact that we have very strong socialists in control of the economy in both the EU and the USA, the chances are extremely high that the coming high inflation will turn into hyperinflation. Especially with the Woke and ‘Reset the Economy’ movements so strong and vocal, that is almost inevitable.

— H. Numan

22 thoughts on “The Nightmare of Hyperinflation is Coming

  1. Ach well I started piling up beans, peas, and firewood, just in case 🙂

  2. The Democrats (socialists) are divided between the knowing saboteurs, who want to destroy America as a sovereign superpower forever, and the woke useful idiots. They will succeed at utterly wrecking the economy. When the EBT and ATM cards no longer work, when the supermarkets are looted and never restocked, that is when America’s manifest social pathologies will explode like volcanos.

    Civil War is coming, my formula is Weimar X Yugoslavia X Rwanda.

    • Agreed Matt! You are spot on the ball!

      We’re in ww3 right now, not conventional, but economic terror at the start,
      And totalitarian tyranny taking shape all around us.

      It seems to me that soon they will again re estabilish new lockdowns, while they trigger engineered massive inflation to truly wipe out people’s savings and pensions, trigger food shortages, hunger, looting, starvation, and people are going be trapped locally by huge price rises of transport fuel.

      This will Finnish off cars, and will lead to people starving, and plundering neighbours for water,food, money, fuel! People with no transport!

      Fighting, shootings, murder, were looking at terrifying things on the horizon unless we can take out this cabal group of trillionaires, ASAP,
      capture them, get them into jail or the people street mobs execution, like in romania in 1989,

      God help us all! Better to fight like a lion when they come, than die like a mouse.

      We all must now asap get hold of Guns and ammunition, to defend u property, land, family, pets, and try to save your life!

      Better to shore up your home protection also, fencing, lighting, gates, barbed wire, locks, cctv, guard dogs.
      And keep armed guns at all times, knives and weapons handy.

      Anyone of these fools clown costumes dares come to your home to force you to be injected, just pull the trigger on these duped NaZi gestapo thugs.
      Fight back or they going to kill you anyway!

  3. I read the Versailles Treaty and my comment:

    According to this treaty Germanys army and navy were reduced to 100.000 men, a certain amount of ammo, artillery not above a certain calibre, NO airforce. And as far as the Versailles treaty is understood (and there is even an exchange of letters to this point, but you have to pay for them at Amazon) the Allies were supposed to disarm down to the same level. They did not.

    But the main point is: The Allies did offer Wilsons 14 points. And when the Germans said OK, the Allies said: Boo, no, they are not valid.
    And in Versailles whenever Wilson brought up the 14 points, Clemenceau and Lloyd George threatened Wilsons pet project, the League of Nations. And Wilson caved in.
    If Wilson would havd had a spine he would have told both: It is the 14 points or we change sides.

    And to your two sentences: Don’t forget the Allies made huge sacrifices. Settling for anything less was not possible; their electorates would never have accepted that.
    According to Tu Quoque the Germans should be able to say and demand the same thing.
    Maybe it would have been better of not telling lies (propaganda with overblown stories) and staying with the truth.

    And lets not forget THE main point:
    General Foch: “This is not a peace. It is an armistice for twenty years.”
    Versailles was set up to produce another war. The Allies wanted it that way.

    And to Hyperinflation:
    If we throw out all the asylum seekers or however you call them, then we could ease our burden. But our rulers (not the guys you see on TV with titles like President, Chancellor etc) dont want it.

    • You’re not entirely correct. Yes, Wilson offered 14 points – which the other Allies didn’t accept. Germany did accept those 14 points, but only after their proposal (we’ll keep Northern France and Belgium and call it a day) were rejected.

      Please bear in mind that Germany until well within 1918 kept their demand to keep Northern France. When the Allies didn’t accept their demand to annex Belgium they demanded it would become a puppet kingdom owning allegiance to Germany.

  4. Thank you for the lesson in history and economics. I never knew about what was happening in Germany between the wars. As you can probably guess, I was never taught that history in school. I did read “At Stalin’s Side” by Valentin Berezhkov but even that detailed autobiography did not provide the full details of what was going on in Germany. I would agree however, we are about to repeat the same old history again, this time with a ‘liberal’ approach.

  5. Did you even read Mein Kampf? It’s 2021, the people who matter are largely aware of the lies about Hitler and the truth about the [Soviets, identified as Jews].

    • Yes, I did. It’s a very badly written book. A telephone directory reads a lot easier, and is far more accurate. He rambles about his own childhood and how it affected him, repeated several times. Without explaining why. Had he published it today, he would have been a snowflake.

  6. I would like to learn about the ” communist party” that existed before WWI.
    As a matter of fact, they split off of the social democrats in 1918.
    Usually a left wing majority during Weimar Republic? I would have heard about it. Those coaltions you mentioned had one common goal: to avoid any access to power on behalf of the social democrats who were only participating in government during one and a half year of the 15 years of the republic.

  7. “Hitler himself was a racist communist. Not my words. His own words. He wrote in Mein Kampf, pages 406-407, that National Socialism differs from Communism only in its racism. Take away racial ideology from Nazism, and you’ve got communism.”

    The closest I can find in my copy is at page 349.
    “The racial Weltanschauung is fundamentally distinguished from the Marxist by reason of the fact that the former recognizes the significance of race and therefore also personal worth and has made these the pillars of its structure. These are the most important factors of its Weltanschauung.” I don’t know, he includes personal worth there and the context seems different. I certainly wouldn’t call him a “racist communist” but we can agree to disagree.

    • @ Will Tyson

      One can debate Hitler’s bona-fides as a communist, but it is well to remember that fascism was not his creation. Most historians consider Benito Mussolini of Italy to be the founder of modern fascism, and Il Duce himself said that fascism was the final and most-perfect evolution of socialism. Like so many of his fellow fascisti, Mussolini was a former communist.

      The National Socialist strain of fascism is considered as something of a dead-end, in that it arose and flourished only in Germany and nowhere else. Mussolini made noises of sympathy vis-a-vis the racial hatred of the Jews when he was around Hitler – he was after all a political realist who wanted to keep Germany’s support – but those were mostly pro-forma; he was not driven by racial animus as was the Austrian Corporal. Nor did he subscribe to some of the other weirder aspects of Nazism, such as its fascination with the occult.

      If Il Duce can be said to have believed in any form of supremacism, it would the superiority of classic Roman civilization. Of which he saw himself as the modern exemplar. A modern-day Caesar.

  8. I would not worry about any of this. It is coming/starting true: It will be tortuous and hard to cope with, true: It will destroy wealth, commerce, families, institutions, and maybe civilization, true. The solution is what it has always been, throughout history. Work the problem. Instead of pulling your hair out and losing sleep and health, work the problem. Do and plan and do and plan and what you can’t fix, solve, or master, you’re going to learn to do without, make do, or use up. Read up on Adm. Stockdale if you want to learn about an example of a man who had nothing but his mind to fight the enemy with FOR YEARS, while being repeatedly tortured, starved, and jailed. He had no idea if he would ever be freed, but he kept on fighting, and never gave up. Our grids, our systems, our infrastructure, economy, everything, are fragile and going to fail. We will survive with the help of Almighty G*d, and indestructible men and women. Get hard, and get busy.

    • Another bingo! Just internalize that this will happen and you will be surprised how clear and simple what you need to do will become in your mind. Not easy, mind, but simple.

  9. H. Numan, please please tell us what is happening now in Thailand. How do people live? In the west people are on govt checks. Is that true in Thailand too? How do they put food on the table when 1/3 of the economy was banished?

    Always find your writings helpful. Thank you.

    • I’ll be doing an article one of these days. The economy is destroyed. When I go shopping, many shops are boarded up, one after the other. People are coping. As good as they can. Vaccination is low at the moment, but they are working on it. Farangs (foreigners) are last on the list. The list starts with number 10. 😉

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