Many believe their is a need for truth in our economic system, but believe the truth is an endorsement of a government’s name. It is important for you to look at history and economics played into the rise and fall of nations. The standard of gold protected the average person, it just was not always expedient to a governments intentions. I hope from this article that those, especially in the U.S., who base their future on the investment strategies of a country will consider revisiting their diversification by utilizing the 5,000 year proven inflation hedge . . . Gold.
After reading, “The Wages of Destruction – The Making and Breaking of the Nazi Economy”, by Adam Tooze (2006), amazement sweeps my thoughts. It is like looking into a mirror in time. It is hard to tell whether it is a current newspaper article about today or history from 1932. Hitler wanted to stay on a gold standard after the collapse of the Mark previously, but temptation and larger objectives became more important. They chose to manipulate markets, bonds, trade and freeze debt repayment resulting in the following.
Tooze writes, “By 1932 many of the bastions of economic strength on which Stresemann (German Monetary Policy Makers) had counted so confidently had been shaken to their foundations. The Deutsche, Dresdner and Commerz banks had been saved from collapse only by state intervention.”
Does this sound familiar? We continue . . .
“The engineering industry (Borsig and HANOMAG), brewing (Schultheiss-Patzenhofer) and insurance (Frankfurter Allgemeine Versicherungsgesellschaft, FAFAG) were hit by spectacular bankruptcies. AEG, once one of Germany’s major corporate champions, was ailing.”
“…the Reich came into possesion of what was potentially a controlling stake not only in banking but in heavy industry as well. And as the crisis was not limited to individual firms or sectors, it was systemic. The collapse of the gold standard and the disastrous proliferation of protectionism fractured the bedrock of economic liberalism.”
More to come next week as we journey back into another world of manipulated currencies by governments.
