Tuesday, September 10, 2013

Money Wisdom #180

"It was a closed system sealed without a chink against reality. The [Nazi Germany] state's debts were converted into banknotes: the currency in circulation rose from about 11 billion Reichsmarks at the outbreak of war to about 70 billion at the fall of Berlin. The Germans, all employed, all earning, received wages in banknotes that they couldn't spend; so they deposited the money into banks; but the banks couldn't lend it, except to the government; so they bought the government's paper, which was converted into more banknotes; and round and round and round."

James Buchan Frozen Desire (1997) p.255

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