insight please? is currency mathematicall plausible?

OGIONIK

Good question. "Currency" is obviously based on "trust" of the issuing agency. The hyper-inflation in Germany after WW1 was a predisposing factor for the rise of aggressive Nazism. However, the central issue in my opinion is whether the barter system (from which currency arose as a convenience) can be perpetually extended at the sociological level.
In other words is "trust" a valid concept for sociological interrelations or is it an anthropomorhism wrongly transferred from the individual to the group ?

No doubt academic economists have more sophisticated answers than this.

If currency is implausible then I'd value your opinion on arbitraging the right hand side guilder dollar cross in the forward forwards.

extrapolating with current data suggests we will all die in nuclear holocaust.

I disagree completely with Fresco. In fact, before the NSDAP ever came to power, the Weimar government got control of inflation, and the German economy was improving, and had been for years, before the NSDAP became a significant political factor.

The basis upon which the NSDAP and several other, smaller right-wing fringe groups attempted to appeal to the German polity with a program of nationalism and militarism was the articulation of two popular myths which were created before the NSDAP existed--in fact, which were created before the dust had even settled. The first was the "stab in the back myth" (credit to Walter Hinteler for giving to me the popular name of this delusion, of which i had long before become aware), which held that the the German army had never been defeated in the field, but had been betrayed by "the politicians." Anyone with even a superficial knowledge of the course of military events after the failure of Ludendorf's Spring 1918 offensive will know that this was a lie. The second was the "Versailles Diktat" myth. This held that Germany was economically prostrate because the Allies, and the French in particular, had imposed ruinous reparations on the German nation, in an act of vindictive revenge (revenge for the reparations imposed on France in 1871, and which the French paid off in full in under three years).

In fact, this second myth was being formulated among rabble rousers and gutter politicians before the terms of the Versailles Treaty were even publicly known. Germany never paid their reparations. What they did pay, less than 10%, was comprised almost entirely of the "in kind" payments, which were largely accomplished through seizure of German assets in the immediate aftermath of the war. Germany not only did not pay their reparations, they did not seek any formal relief for their reparations debt, and even the Weimar Republic, before the NSDAP came to national prominence, simply ignored their obligations. They negotiated and re-negotiated payment schedules, and if they commented at all, it was to say that they could not meet the payment schedules which they had negotiated. By contrast, Austira and Hungary pleaded extreme economic hardship, and soon had their debts forgiven. Only little Bulgaria ever paid their reparations debt, it took them 20 years, and their economy, never very strong, was ruined by the effort.

The run-away inflation in Germany in 1919-20 was a product of the collapse of Germany industry and agriculture which occurred before the war even ended. Both the coarse "black bread" and the canned sausages which constituted bulk of army rations by 1918 were heavily adulterated, with simple sawdust being the largest adulterant constituent. All of the heroics of the defenders who held back the German onslaught in the Spring of 1918 (and they all deserve the praise they have been accorded) did not delay the German advance as much as did simple hunger. When the Germans broke through the line of Gough's Fifth Army before St. Quentin in March, 1918, they employed all of the superior tactical doctrines developed by Hoffman on the Eastern front in the preceding years, and especially rapid advances which by-passed strong points. But they came so quickly into rear areas, that they captured huge supply depots before the material could be evacuated. In one notable case, they overran the divisional quartermaster bakeries of one division of Fifth Army, and stopped their advance entirely, and keeping their guns on the bakers, required them to continue to turn out bread until their stock of flour was exhausted. The Germans foot soldiers at first thought they had capture some special depot for officers, because they did not at first believe that the Englanders actually issued white bread to their own private soldiers.

In the subsequent two attempted offensives which comprised Ludendorf's Spring offensive, such looting was less of a factor, both because the officers were on the look-out for that behavior, and because the French and the English had withdrawn their quartermaster and commissary operations to more remote rear areas. But the point was made for the Allies as forcefully as it was driven home with the German infantry. Germany was already on the verge of starvation, and that applied to the army, who were by that time the pathetic best of what was available--matters were even worse for civilians, and farm labor was almost unavailable except from adolescent boys and girls. Just as was the case in the Second World War, and to a greater extent, the German army depended on horses for transport, and they could not by then provide even a significant fraction of the remounts and drays they needed--German farms could go begging for horses to plow the fields and bring in the fodder and crops. In the Second World War, the same effect resulted from the near complete destruction or forced decentralization of German industry, which meant they could not keep up with the losses in tanks and aircraft, never mind produce farm machinery or rolling stock for the railways. Run-away inflation was already present by late 1918, before the war ended, and ruinous inflation had begun in late 1917.

Almost the entirety of central and eastern Europe was on the verge of starvation by 1919. Herbert Hoover first came to wide public prominence as the manager of the Allies enormous effort to feed the people of central and eastern Europe in 1919-20.

I don't fault Fresco for his point of view, it is a common one. It is also a mistaken one, and, perversely, represents a triumph of NSDAP propaganda long after that political party is dead and has been buried. I strongly suspect that these two myths, and in particular the "Versailles Diktat" myth, remain popular among Germans today, just as they continue to be solemnly concurred in by reputable historians among the nations of the former western Allies.

************************************************

Not only have many wars in history had no economic motive (although economic motives may have had less important roles in the decisions made in those wars) i suspect that a careful analysis of wars throughout history would show that economic motives have almost never been central to the bellicose rhetoric and the militaristic policies of nations which have gone to war. Did the Greco-Madedonian armies of Alexander III overrun the Persian empire for economic motives, or because the economies of Macedonia and Greece were in a shambles? Hardly. Was Rome motivated to continually conquer her neighbors for any other reason than self-agrandizement and the will to dominate the widest possible hegemony? I think not. Even if one could make a feeble case that this or that nation was economically motivated to wage war, the cost of long-term warfare, and of maintaining an empire gained by conquest is such that anyone going to that war was surely deluded. I had thought of examples which i could provide over and over of wars which were fought for other reasons than economic greed--but i could fill pages with examples.

This claim can only be superficially advanced, and the allegation that nations are driven to war by inflation simply has no basis in demonstrable historical fact.

I bow to your excellent historical knowledge, Set, but could we not say that inflation was still a "trust issue" contributing to the rise of the Nazis because they were milking it for propoganda ? (i.e. "trust us who oppose International Jewish Financiers (sic) who caused inflation").

Sure, practical politics (and when it came to gutter politics, Adolf has had few peers in history) is rarely about the truth, and never considers truthfulness a test of the value of any proposition.

The original poster, however, is attempting to suggest that an inflationary economy leads to war. I see no reason to subscribe to that theory.

By the way, a credit instrument based economy (i.e., for example, using "currency" ad a medium of exchange), is not necessarily the only circumstance in which inflationary pressures can run out of control. In fact, it was only in the 20th century that governments began to attempt intelligently considered policies to control economies.

In the 16th and 17th centuries, the Spanish empire brought so much gold and silver into Europe, and especially silver, that constant high inflation rates jerked the rug out from everyone's precious metal based monetary systems, with an effect lasting well into the 18th centuries--some analysts claim that the effect was still apparent as late as the French Revolution.

It is also noteworthy that many historians have come to agree that wars and revolutions can frequently occur in prosper economic times, suggesting again that there is not necessarily a direct relationship between economic hardship and war. The Dutch fought a war of independence against the Spanish (i won't go into the explanation of why Spain controlled the Netherlands) from 1564 to 1648, and that began at a time when Dutch prosperity had really taken off as they got into the carrying trade, successfully displacing the Hanseative League. The English civil wars of the 17th century, the American Revolution, the French Revolution and the Russian Revolution (as opposed to the more specific Bolshevik Revolution) all occurred at times when economic prosperity, or at least the growth of production and extended credit, were taking place.