The definitive U.S. Dollar Rally Thread
The Death of Paper Money
Ebay is offering a well-thumbed volume of “Dying of Money: Lessons of the Great German and American Inflations” at a starting bid of $699 (shipping free.. thanks a lot).
The crucial passage comes in Chapter 17 entitled “Velocity”. Each big inflation — whether the early 1920s in Germany, or the Korean and Vietnam wars in the US — starts with a passive expansion of the quantity money. This sits inert for a surprisingly long time. Asset prices may go up, but latent price inflation is disguised. The effect is much like lighter fuel on a camp fire before the match is struck.
People’s willingness to hold money can change suddenly for a “psychological and spontaneous reason” , causing a spike in the velocity of money. It can occur at lightning speed, over a few weeks. The shift invariably catches economists by surprise. They wait too long to drain the excess money.
“Velocity took an almost right-angle turn upward in the summer of 1922,” said Mr O Parsson. Reichsbank officials were baffled. They could not fathom why the German people had started to behave differently almost two years after the bank had already boosted the money supply. He contends that public patience snapped abruptly once people lost trust and began to “smell a government rat”.
Interesting take on The Wizard of Oz
In December 2007 the SciFi Channel aired the latest remake of the OZ tale with the release of “Tin Man”. This new version of the old tale was complete with the latest special effects and a new angle. It is clearly not based off the original characters in Baum’s 1900 era plot.
You can buy the Collector edition here:
Truthfully, when I first watched this movie I was on the hunt for clues to the Monetary Allegory angle and I didn’t see them. It seemed to me to be a very bizarre telling of the story that made no sense at all. Was this just another attempt to suck some more profits from the original tale by updating it with special effects for today’s attention-deficit-disorder audience that refuses to watch movies unless they are in 3D on an iMax screen?
So I did a little more checking, a little more thinking and a LOT more opening my mind to the possibility and WHAM! There is was. Clear as day.
A NEW MONETARY ALLEGORY BASED ON TODAY’S EVENTS!
You might find this of interest: “The History of Money” by Jack Weatherford, pg. 174 “The Cross of Gold and the Wizard of Oz”
“The most memorable work of literature to come from the debate over gold and silver in the U.S. was The Wonderful Wizard of Oz…..L. Frank Baum… greatly distrusted the power of the city financiers….” so he “summarized and satirized the monetary debate and history of the era” with his Wizard of Oz story.
It goes on in greater detail. Very interesting book—-some of the chapters are fascinating — “Cannibals, Chocolate, and Cash”, “The Golden Playpen of Politics” and “The Art of Currency Terror” to just name a few.
I’ve been put on the spot. My company needs to buy $550k in US dollars for transactions. Recently, the currencies we use have been falling to the US dollar. Just wanted to put out a general query: ‘Is the dollar going to go up in the short term?”
June 12 is fast approaching. I’m not sure of what the crystal ball is saying, but I’m thinking if there less $US is out there, it must make $US more valuable eh?