Creating Wealth With Inflation – Lessons from Weimar Germany

+Hans Schoff wrote:There’s a lot of talk about inflation, deflation, trillion dollar deficits, unfunded liabilities, quantitative easing, stimulus packages, high unemployment… what does it all mean and how does it relate to creating wealth? First of all, it’s important to review some history to help put it all into some context. As Mark Twain once said, “History doesn’t repeat itself, but it does rhyme.” To that point, the US today finds itself with the same kinds of problems governments of the past were stuck with: governments like the Weimar Republic of Germany almost a century ago. With high unemployment, insurmountable debt, a fiat currency (currency not backed by anything with inherent or intrinsic value like gold or silver), rising prices and other causes for concern, the US appears to be heading down a similar path to the one taken by the Germans. The types of issues just mentioned cause lots of change which can create an environment for total destitution for some who are uneducated and uninformed and an incredible opportunity for creating wealth for those who are educated and who are informed. So first, a quick history lesson on the Weimar Republic of Germany: July 24, 1914 – The depreciation of Germany’s currency, the Reichsmark, began when the Reichsbank (Germany’s central bank) suspended gold convertibility on the Reichsmark, meaning you could no longer trade in your Reichsmarks for actual gold.



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