Glenn Beck Auditions For The Role Of The Grim Reaper
The Great Depression times 100?
Hyper inflation like the Weimar Republic?
Beck needs to stop reading stories about the Mayan calendar and the end of the world in 2012, and maybe just try reading the Sunday funnies for a change. but I digress.
The major issue I have with Beck in this video, is that he has no clue about the Weimar Republic and what caused their hyperinflation and ultimate demise. But facts never get in his way, and his viewers just like his silly “clown-like” demeanor, so they won’t stop watching
Think about, if you are going to discuss the end of the world, why not do it lightheartedly?
I wouldn’t be surprised if Beck has massive amounts of money invested in companies that produce tinfoil hats, gas masks, and bomb shelters.
In Beck’s defense, he knows how to make money and keep his ratings up. So more power to him…I guess.
January 6th, 2010 at 8:18 am
CHE -
I don’t watch Beck’s show but I do know a little about Weimar Germany’s 1920s hyper inflation and the Federal Reserve (FED).
Saying hyper inflation is 100 times worse than simply a depression is opinion of course but it is directionally correct, based on the first hand accounts I’ve read from those who actually lived through it. In other words, even if you still had a job, your purchasing power was continuously reduced making it impossible to buy even basic necessities. This is why it’s worse than a depression. Particularly hard hit were the elderly whose life savings melted into a mountain of worthless paper before their eyes and they could do nothing to stop it.
Now, in the US today… because the FED can expand M0 (so-called “high powered money”) w/o any limits & whenever it wants, hyper inflation is possible, although it is unlikely.
The legitimate concern here is the Federal Reserve expanded M0 from about $80 billion to about $900 billion literally overnight, in Oct 2008, in response to the financial crisis. The FED gave this new money created out of thin air to the largest banks as “excess reserves.” And because we live in a fractional reserve banking system, banks could lend 10 times this amount if they choose to do so. The crazy part is, the FED currently pays the banks interest on this money created out of thin air NOT to lend it. That’s right: the FED is paying banks interest on money that’s not theirs & not to lend it business to create jobs.
Don’t believe me?
I recommend you research this yourself… the truth here is very scary.
Despite Beck’s scary words, the FED has multiple ways of removing this $900 billion before it gets into circulation and everyone HOPES the FED will be successful. Never in US history have we been in this situation & this action by the FED (along w/ others) explains why it is premature to say the crisis is over.
Again, I don’t watch Beck but I can say from watching this clip that what he says is possible & nothing he says is a lie, per se. However, I’m confident the FED will prevent the crisis Beck is ranting about.
Beck’s point that the US is not immune from economic reality is true. I recommend Reinhart & Rogoff’s recent book, “This Time Is Different” which details how Govts around the globe have made this same debt driven currency debasement mistake over & over for hundreds & hundres of years.
While we’d be fools to believe this cannot happen in the US we should not, on the other hand, live in fear.
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January 6th, 2010 at 9:15 am
Hi Suo Marte,
I must say that I do enjoy reading your comments when you post. Though I don’t always agree with you, I can appreciate intelligent dialogue.
As for the Weimar Republic. I am not denying the fact that they dealt with a complete collapse of their monetary system. What I am arguing is that Beck’s reasoning for why it happened is simply conjecture.
Beck claims that it was moronic German politicians who simply printed money and didn’t care about the consequences. This is simply not the case.
The extreme reparations that Germany was forced to pay to other nations was the major cause of Germany’s economic woes. For Beck to ignore the larger issues simply because they don’t fit into his critical construct is dishonest.
By the way, I agree with you that we are fools to think America is immune to an economic collapse. That is why we need to significantly scale back our military spending. That’s just my opinion.
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January 6th, 2010 at 2:01 pm
CHE –
I share your view regarding military spending and there is a loose parallel (of sorts) here.
Germany’s inflation actually began when it chose to fund WWI almost exclusively through borrowing, instead of taxation or a combination of borrowing & taxing. At the risk of confusing Mr. Beck w/ the facts… between 1913 & 1917, the stock of money in circulation increased five-fold.
President Bush funded both the Iraq & Afghanistan wars through borrowing, just as the German Govt did for WWI. And, so far, President Obama is following suit (to my dismay). In my view, this is how Govt keeps the war machine running w/o incurring significant social unrest. If every American earning an income were directly taxed to pay for these wars, I don’t believe we’d be in Iraq or Afghanistan today. And, moreover, if every American earning an income were directly taxed for the cost of maintaining our overseas empire, we’d not have “assets” in South Korea, Japan, Europe, throughout the Middle East, etc. Funding war & empire through borrowing & then paying the debt w/ devalued money is a lot less conspicuous than is direct taxation.
So while borrowing to pay for war is the parallel between Germany then & the US today; the difference is the German people “transformed the greater part of German private fortunes into paper claims on the State,” by purchasing Govt debt, whereas the Chinese Govt is (currently) funding our wars (& entitlement programs).
Best.
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