 This is Jeff Deist and you're listening to the Human Action Podcast. Ladies and gentlemen, welcome back once again to another show of the Human Action Podcast. Very happy to be joined this week by my friend, the person many of you already know as the main editor-in-chief of Mises.org, Ryan McMakin. Ryan, how are you doing today? Hello, Jeff. It's great to talk to you today. Well, so normally on this podcast we tackle books. That's what this show is all about. It's designed to encourage people to read particular books to help people walk through particular books which are perhaps more difficult or more lengthy and also to provide a review of sorts of particular books. And so we are going to do that this week with a really interesting text which was written way back in 1975 by an Englishman named Adam Ferguson and the book is titled When Money Dies. So it is basically a history and a cautionary tale about the hyperinflation which plagued Weimar Germany, particularly that beginning in 1923, which had its roots in earlier years. But Ryan, what's a little different about today's show is that this is not a book about econ per se. This is a history. This is a book which considers sociology. It considers war and peace. It considers monetary policy. It considers basically the entire contextual background from which sprang this horrible decade for the German people. So it's a little bit of a diversion for listeners today, but it's a book that I think is very important and needs to be read. Yes, if you're looking for a thorough economic explanation of what happened to the currency, you won't find much of it here. Although there's a little, there's a few hints of it later in the book where he talks about bubbles a little bit and without using the word mentions the malinvestment to a certain extent. But clearly the most important part of it is providing the human element and understanding perhaps how a society can really be destroyed on a sociological level by a great inflation. And really probably what's important for us is maybe how it would affect a society at even a less to even a lesser extent. And that's why we do not have a inflation to this level. So when I was looking at this, what I was trying to get out of it was really what were these events that enabled the state to get away with such a large hyperinflation? What was the mindset of the Germans at the time? That was very helpful. And then also being able to see maybe some of the rationales that the state was using. And so really there was a lot of questions that I had that the book helped to explain a certain bit that were beyond the economics of it and helped us to see what was going through the minds of ordinary people during this period because it's easy to just say, well, A happen and B happen. This can be explained by economic theory. But that leaves out a lot of letting us understand how these things happen and why this state was able to get away with what it could get away with for so long. And I want to add to the audience that we still have one case of this book left. So what we're going to do is give a free copy of this wonderful paperback When Money Dies by Adam Ferguson. Not a particularly difficult read. It's a few hundred pages, 250 odd pages, and very, very fascinating historically. So if you follow me on Twitter, which you should, at Jeff Deist, if you're not already, you need to follow me PM me via Twitter and I'm going to send you a link which you can fill out and obtain this book shipped to you in physical form for free to your home. So I encourage everybody follow me at Jeff Deist. If you're interested in this book or in today's conversation, just send me a private message and I will send you a link to get this book. But Ryan, I want to point out that the idea that this can't happen here. We're the US dollar, we're the world's reserve currency, inflation is well under control. We have a lot more scientific approaches to monetary policy than we did 100 years ago. All of this is of course not true. It could happen here. We don't know that it will happen here. We can't predict that. But there's a lot of rumblings out there, even amongst very mainstream thinkers on this topic of inflation. Obviously, earlier in 2020 in March, we had a huge amount of creation on the fiscal side by Congress in the $2.7 trillion CARES Act. And of course, since the coronavirus arose, we've had our own central bank here in the United States see its balance sheet, which had finally been reduced to under $4 trillion after some tapering from all the quantitative easing headache, the hangover we still have from most 7 and 08. That balance sheet had gotten to just under $4 trillion and now has risen all the way back up in less than a year to over $7 trillion and appears to be headed to $10 trillion. So all this said, we are hearing from people like Jerome Powell himself, the chairman of the Fed, saying, well, you know, instead of a 2% inflation target, since inflation is still too low, damn it, we're going to have an average inflation targeting of 2% over time. So it's okay if it goes up to 4% for a while because we've had zero for so long and that averages out to 2%. So that's, I think, a caution to a lot of investors. A lot of people are reading into that. We have very mainstream guys like Ray Dalio worrying about inflation from all this new money creation and of course credit creation follows that. And again, on the fiscal side, Ryan, we now see in 2019 anyway, for which we now have complete US Fedgov data service on debt, rose all the way up to almost $600 billion. So it's in a $4.5 trillion spending year in 2019 before coronavirus. So now we're well up over 12% of all congressional spending Congress's budget every year has to be applied to debt service. So that's just some background for everything that's going on and the idea that inflation or hyperinflation couldn't happen here, I think, is a silly thing to imagine. Well, and an important aspect of what's going on right now to also point out is that production is not soaring. It's flat or falling. It's hard to know right now what the data is going to look like as we go forward, but certainly based on the second and third data for GDP. It's a good reason to believe that production is not keeping up with people's needs. And so when you have production falling combined with a lot of money production, then that's when you start to get into the danger zone of inflation. Central banks the world over have managed to get along and get by for so long because people have been working hard, production has been increasing, worker productivity has been going up, efficiency has been increasing, and that helps take the sting out of price inflation that results from money supply inflation. But once you reach a point, and this is what happened in Germany, once you reach a point where production falls, whether it's through war losses, whether it's through increased problems with labor unions, rent control, loss of territory to the country, all of these things happen to Germany. But now, of course, production is going down due to both some cyclical issues, which we began to see back in September when we had the repo crisis. That's when the Fed started adding again to its portfolio. It wasn't just after the lockdowns occurred, but it's the lockdowns, of course, now, and people's reluctance maybe to go out even on their own, even if there hadn't been lockdowns that are contributing to this decline in production. And that could spell a real problem when you're looking at inflation issues. Well, I wish people would see how unnatural all of this is. I mean, the lockdown is clearly a hugely deflationary pressure on the economy. You have millions and millions of people staying home, driving less, eating out less, not vacationing, buying less. I mean, that's all incredibly deflationary. But then you have the Fed, the central bank, with an assist from Congress. And I dare say the new Treasury Secretary Janet Yellen is not going to be any better on this, trying to stimulate, stimulate, stimulate. It's just, it's bizarre that we have these twin forces in kind of a whipsaw effect with respect to each other. And all of it is supposed to form some sort of coherent policy. It's absolutely a mishmash. Well, and something you get out of Ferguson's book and something you would notice just living life as well. I remember thinking in 2009 thinking, well, is this, am I living through the early days of a great depression? I have no idea. And nobody woke up in late Middle Ages in France and thought, oh, I can't believe I'm living through the Hundred Years' War. This is a real bummer. You don't know where you are in these chains of events. And that's an impression you get from reading Ferguson is people were really just doing things on an ad hoc basis. We need to keep things going. We need to keep the factories open. People need more money to buy food. So we'll print more money and we'll kick the can down the road and we'll deal with this problem later. Just print the money now and we'll mop it up somehow in the near future. And what happens is then things get away from you or you don't have the ability to see the larger picture of what's going in the economy because all social groups, social classes, economic groups, occupations, so on were affected in very different ways. So it's very hard to evaluate what's really going on out there. And when your policy is just go from one thing to another trying to fix whatever problem was created by the policy before it, that's how you end up with something like a hyperinflation. It's not that all these people were just so dumb and they just threw caution to the wind and just said print money, it's no problem. There were potential problems there but they had a real hard way of figuring out where they were in the crisis. Well, it's important, I think, to point out as Ferguson does very capably in this book that you have to look at what happened in Germany in 1923, which was the worst year for their hyperinflation. In the context of what came before, in the political context, the historic context, the military context, so there were lots and lots of things happening prior. First of all, Germany had suffered through a war, which it had to finance, which was obviously a huge expense. And actually up until 1914, the German central bank, the Reichsbank, the Reichsbank held one-third of reserves in gold. So compared to our Fed today, that's a pretty hard money policy. So all of this changed as a result of the war, so war finance was a big thing. You mentioned also the loss of power and manufacturing capability and even territory that came out of the end of World War I where Germany was forced to cede not only the Alsace-Lorraine area back to France, but it was forced to cede some of its African territories, et cetera. North African territories, colonies, however you want to view them, but also they were suddenly faced with 250,000 idle men who had been soldiers previously entering the employment markets. And then of course on top of that, they were faced with the responsibility for war reparations, which had been forced upon them by the Treaty of Versailles and many of which had to be paid in gold or in some sort of unfavorable exchange ratio for the German mark to whatever currency they were repaying. So it's simplistic to say, oh, Versailles gave rise to Hitler. And that's why the right rose in Germany. And it was all this anger over German nationality being subsumed by this sort of guilt. But Ferguson, to his credit, I think, explains all this as saying, no, no, that's too facile. You have to look at this thing in its totality. And I think that's, as people who are sympathetic to the Austrian school perhaps were also guilty of that frequently and when we look at and try to explain events with purely an economics lens. Yes, Ferguson's very good at making the point that Hungary and Austria had hyperinflations also had big problems after the war and they didn't end up like Nazi Germany. So clearly there's other factors at work there. And also a point that Hans Sennholz makes at Mises.org and some of his work on postwar Germany, is that, yes, there were lots of issues related to the Treaty of Versailles and so on, but we can't ignore the fact that at the end of the war, the German Revolution happened, which basically was a left-wing takeover of the state. Now it wasn't a big social revolution where people became class traitors and that sort of thing that you see in some socialist cases, but it was essentially a situation where the left came to power. They, in many cases, threw the old ruling class out of their palaces in the middle of the night and they had to flee and that sort of thing. And so it certainly hurt that particular group of people. But the larger effects was that it brought in what you would expect from the left-wing social agenda. A lot more, well, many more laws were passed to give benefits to, say, labor unions and there was rent control and there were many more controls on production and business and there was a lot of welfare payment increases that went out. And so in addition to having to pay war reparations and those related issues, the Germans were voluntarily, through their legislatures, adopting a whole lot of other expenses that didn't have to happen, but which they had chosen to do because of a shift leftward in their economic policy overall. But I think one thing that comes through quite clearly in this book is that war has a lot to do with it and that war and inflation are inherently related because it's awfully hard to tax people to pay for war as you go, especially when a lot of those people have shifted from their hopefully economically productive lives into war production, if not outright conscription into the military itself. And so while I would say that Ferguson is right that hyperinflation didn't create Hitler without the ability to have gross monetary expansion, Hitler might have just been a footnote in history rather than turning Nazi Germany into an expansionary force as it became during the Second World War. Well, you might say that the hyperinflation in Germany is something of an economic Godwin's law of sorts right where the idea, if you're having a political discussion as time goes on, the odds that someone brings up Hitler increases to one. And you might say if you're talking about monetary policy, if you're in a casual, non-academic setting, the odds of someone bringing up the German hyperinflation as causing totalitarianism increases to one over time. So in many cases, people are reluctant to bring it up because it seems like you're just necessarily embracing this idea that, well, the Fed was printing a lot of money, therefore we're just one step away from 1923 in Weimar, Germany. But there's still so much to learn here, even if you don't think it would reach that point, which and it didn't reach quite to that point in Austria and Hungary, although they suffered immensely from their hyperinflations. There's so much to learn here about how these sorts of policies affect different groups and what a huge transfer of wealth it can be from one group of people to another group of people very unfairly and the sorts of inequalities it can cause from these policies. It's not just about rising prices. There are big political implications here and matters of equality that are made far, far worse by central bank inflation. Right. And one thing this book does so well is it really talks about some of the politicians and players involved. It goes through some of the German officials, both as the central bank and in political figures. And it also gives some really fascinating historical accounts from there's a whole chapter that's almost devoted to basically the privations of a housewife who is trying to get through the early parts of that year and keep her household together. And we're talking about, you know, barely together in terms of like calories. We're not talking about any sort of luxury. And so she's a little bit better positioned than perhaps hundreds of thousands of her peers and that she owns a little bit of stock, which produces a tiny nominal payment. But of course, that's becoming worth less and less. She's also a little better positioned than some because she has a nice stash of her husband's cigars, which immediately become worthwhile on the black markets. And so she's not permitted by law to exchange any of her rapidly declining marks for, let's say, Swiss francs, which her banker at the teller window advises her to do. But that's actually an illegal transaction, which can only occur on the black market in Germany during this period. So there's a caution. Watch out for all kinds of capital controls in the United States as a potential canary in the coalmine with respect to inflation. But it's fascinating to think of what people were willing to exchange for basic food stuffs for coal, which is how people heated their homes, of course, during some, you know, a cold German winter. And there's actually an expression that came out of all this because there was a patriotic appeal to German citizens to exchange some of their real assets for paper to show that they were part of this new monetary regime where there was going to be a lot of printing, but we were going to stand by our national currency, even though it had changed radically since its pre-war. You know, as I mentioned earlier, it's one third gold reserve requirement. And so the phrase, which became popular, and I'm quoting here from Ferguson, was the self-sacrificing spirit of the people. I gave gold for iron. And, you know, I thought that was very interesting to think of the German people still trying after World War I to have a cohesive national spirit and to do their part in an effort to prop up the currency machinations of their central government. But of course, as this book horribly shows, it didn't work. Yes, those are some of the sadder tales that you encounter where that feeling of inherent unfairness comes out. It's the people who followed the rules, who did what they were told, who tried to be team players. They were very often those who fared the worst because they didn't turn in their money. They didn't speculate as they should have. Buying foreign currencies would have been the wise thing to do, but they held on to their money and they held on to also their government debt, thinking that that would all be made good one day. But really, you couldn't trust the state. That was terrible advice. But a lot of people simply rejected outright advice from, as you know, from their bankers and others who told them, this is how you can protect your savings. And they didn't do it because they trusted the authorities. And it's also interesting to imagine that this was only 100 years ago. I mean, it seems like such ancient history. But since then, Ryan, we've had a lot of crazy examples. We've had places after World War II experienced hyperinflations. We, of course, had famously the former Rhodesia's in Bow Boy. We've had even more recent examples in Argentina. We may, in fact, be seeing something of a currency meltdown in Venezuela today. Well, we are, I shouldn't say something, even Turkey. Which, if you recall, not long after the big crash of 1708, maybe in that sort of 2010-2011 period, Western media were touting Turkey for its GDP growth, 10% GDP growth, 8% or whatever, outpacing all the other countries in their recovery. And so, you know, this shows Turkey should be allowed into the eurozone. Of course, Turkey, something like 80 million people, would be the first or second biggest country in all of Europe, along with Germany. I mean, people were really talking about Turkey as an up and comer. But of course, what was happening, which is something that there's a parallel here with what the Germans suffered in the interwar years, is that Turkey was borrowing money in other currencies. They were borrowing money in dollars and euro. And this is just a decade ago, mind you. This isn't some far-off example. And they were using that borrowed money to finance all kinds of public work. So they built a big, beautiful international airport terminal in Istanbul. They did all kinds of things. So when you do that, you can basically gin up your GDP to look a lot better than you are. And then when the bills come due and you actually have to repay these debts in currencies, you can't print up, i.e., not in Turkish lira, then things get pretty wiggy. And what we've seen over the past few years is a really depressing fall of the Turkish lira, depressing for Turks if you're fortunate enough to be a tourist there or something. That's a different thing. But last I recall, it's something like eight to one lira to euro. So this is what this book talks about. I mean, we have more recent examples we can look at. Yes. Well, of course, we've got Venezuela. We've got Turkey, as you note. We've got lesser examples in some other places. And of course, back in the 90s, we had the former Yugoslav republics. And the overall issue when you see these sorts of things is it's important to remember that there's the boom that comes with high rates of inflation. And it goes back to that issue of, well, where am I in this crisis? And how big of a crisis is this? It's hard to tell when you're in the middle of a boom because employment is still strong. And that's something that's noted by Ferguson is that in the early days of the hyperinflation unemployment was still fine. It was one to three percent in most places. And the workers, they had their wages indexed to a variety of price indices. So especially since they received a lot of legal protections, they saw their wages go up. And government employees saw a lot of their wages go up. When you look at the inflation numbers, you have to also look at how much were wages of different groups going up. And in many cases, even in Germany at that time, in 21 and 22, wages were still going up by a little bit more than the inflation prices were going up. And so those people were doing fine. The people who were getting really hit hard were more the bourgeoisie types of people, the shopkeepers, the people who had to pay employees, the people who were maybe elderly and had all of their savings in government bonds or just in cash and so on. And those people were being destroyed. But that doesn't mean the whole country was doing poorly. And with a big part of the country is doing fine, then your GDP can look fine. And especially if your GDP calculation depends a lot on prices and it's calculated partly that way is everything looks fine during the boom. So you can look around and say, well, we have nothing to worry about. Yes, there's inflation, but we're in a boom. The economy is fine. Unemployment is 3%. I really don't see any reason to hit the panic button. And that's how you get farther and further down that road until it becomes too late. Well, Ferguson points out that despite the destructiveness of some of the bombings which occurred in Germany, there were still parts of the country which remained largely untouched physically by the war. And so there were still tremendous amounts of productive capacity in particular factories, for example, in Germany. And Bob Higgs makes this point. Robert Higgs, where he says, you know, even if we had some terrible crisis in America tomorrow, whether that was with the dollar or COVID, I guess, is a crisis of sorts, you know, that per se, as long as bombs aren't dropping and our fires aren't ravaging. I mean, you still have the physical accoutrements of a productive society. You still have the factories. You still have the farms. You still have the sources of energy and power. You still have the buildings. So there is hope. But what's the flip side of Robert Higgs's point is that it's remarkable how much damage you can do to an economy without any physical destruction, without a war. Simply by insisting on the wrong fiscal and economic and monetary policies. And I fear that because this is so far in the rear of Ymir and also because of the post-Bretton Woods Agreement, whereby the U.S. dollar became the de facto world's reserve currency, that we have been lulled into a false sense of security. And during the De Gaulle era in France, there was a treasury or finance minister named Jiskar Destang. And he is famous for coining the phrase exorbitant privilege. He said this post-Bretton Woods Agreement basically amounted to an exorbitant privilege for America. And what it's done remarkably and continues to do is to allow us to, in effect, export our inflation, just as we export our dollars. Because anybody who looks at the U.S. federal government, Ryan, looks at it with a clear eye and says, OK, here's their revenue, here's their expenditures. These are crazy people who are never, ever, ever going to get their house in order. Why would we ever lend them money except at, let's say, junk bond rates? That would be the rational response to a spend-thrift government like the U.S. But in fact, we see the opposite. We see bond rates, 10, 30-year bond rates, staying quite low. So this is all a result of a post-Bretton Woods arrangement, which is perhaps on somewhat shaky ground now as we see turmoil across the world. We see China rising in some nasty ways. We see COVID shutting down whole economies and creating a situation where maybe a lot of people are going to need some sort of, you know, UBI or something while they sit at home. So it's, you know, we imagine that arrangements last forever. And of course that isn't true. Well, and it's easy to see how Americans would be complacent or users of the dollar, people who have plenty of dollars around because those examples we noted before, Venezuela's in Bapway, Turkey, and so on, what was the way to protect your wealth? Well, get your hands on dollars. They all wanted dollars. So you can see, well, if everybody wants dollars, then do we really have to worry about the value of the dollar going into steep decline? And also you could come to the conclusion that the dollar will be the last domino to fall. You can look around and say, well, the EU, the euro, they're going to have problems before we do or the pound. And so then I'll have more warning. I'll know when we get to the dollar as that final domino. And then I can make adjustments accordingly. So you just look around and say, things are probably fine for now. And again, it's just so hard to predict when do things get out of hand. Where is that point where you can't just decide, oh, we're going to change course on monetary policy and then things will be fine because it's just really hard to calculate and know ahead of time what might happen. And again, it doesn't have to mean that the dollar loses all value. We've seen major devaluations in major currencies before, like the pound after World War Two and the pound didn't go to zero, but it certainly led to a significant impoverishment for the decline in geopolitical power for that country. And these are things you need to be aware of and not just pretend like they could never happen because people still want dollars. Because yes, we've benefited immensely from Bretton Woods. The question is how long can that be kept going? Well, and what this book is all about is a crisis of confidence in the currency. There is, whether we like it or not, I won't say animal spirits, but there is a psychological component to all of this. And I think, as you mentioned, I think the dollar is probably in good shape for a good long while. Now one thing that's different between today and other problems, other currency seizures like we saw, let's say with Greece and Italy during 07 and 08 with Iceland, things like that, is that there's a new player on the scene, which is Bitcoin. So there is potentially an avenue for people to walk away from dollars as the least bad currency, the least dirty shirt in the laundry. So I would just like to throw that out there. You mentioned that, or we mentioned that as Higgs points out, if you continue to have the productive capacity in place in a country, the workforce, the physical factories, plants, the agriculture, the power, et cetera, bad policies can perhaps be overcome more quickly because you don't have to build them from scratch. Now, right now, the policies of even people on the right, but certainly people on the left, amount to a form of MMT, Modern Monetary Theory, which is basically that we can, as a monetary sovereign, the U.S. federal government can create as much money it needs to pay as bills, including stimulating the economy through workplace schemes, full employment schemes or UBI, a universal basic income or whatever it might want to do. And that that's A-OK because we can continue to do this because people need the dollars. And of course, if you listen to my episode with Bob Murphy a couple of weeks ago on Stephanie Keltin's The Deficit Myth, you'll understand better what the MMTers are talking about. And while someone like Paul Krugman is not a per se MMTer in the sense that he doesn't want to just use direct fiscal policy to create new money, he still believes we should have a central bank and that the Treasury should issue debt. The central bank should be, there is a buyer of that as need be. So it's a little more circuitous. But nonetheless, he is still someone who says deficits don't matter, which is another way of saying that monetary expansion doesn't matter, at least under current conditions. But I was thinking about this the other day, Ryan, and this is something Bob Murphy points out, which is that this assumes that you already have a productive capacity in place. Even the Stephanie Keltin's and Paul Krugman's admit that you have to have a somewhat advanced economy and a currency which people respect and want in order to engineer your MMT dreams. You can't take a developing economy, which doesn't have the ability to build, let's say, automobiles and say, OK, let's just create a central bank. I have it create as much money as it needs and start paying people and then we'll have cars. Even the MMTers understand that, that more money in the economy per se does not just magically create new goods and services. So you need to have a productive economy and a sought after currency like the Euro or the Swiss Franc or the US Dollar before you can engineer this monetary expansion and say that it's going to work. So even the proponents admit that. And then, of course, you also have to assume that there's going to continue to be ongoing demand for that currency. And that's been a pretty good assumption. That's been a pretty safe assumption with respect to the US Dollar. Not so much with respect to the Italian lira or the Greek drachma or the Icelandic Kroner or a lot of other currencies in recent history. So those two things were not present in Germany in the 1920s. They didn't have as productive as economy as they needed and they didn't have any demand externally outside their own borders for German marks. In fact, a mark that was roughly on par with the French franc prior to the 1910s or certainly up to 1914 suddenly became worth like one trillionth of a French franc after the war. So things can get out of control pretty quickly. And that's what concerns me. If a Krugmanite wants to say, oh, you Austrians are doom and gloomers and you're always saying the sky is falling, I think I would rather be on the side of worrying about this than not worrying about it. Yes, it's good to be cautious because the assumption is you can always stop the problem in time and head off the real crisis situation because even these mainstream economists admit, right? Well, a moderate inflation is good, but a lot of inflation is bad because it leads to problems in calculation and might lead to a decline of confidence in the state and so on. And the political aspect is extremely important. A phrase that Sennholz uses is unbacked money is political money. And so if that's the kind of money you're using, you've got to be very acutely aware of the political situation. And so the geopolitical position of the state that is issuing that money is very important. Do people have confidence in the ability of that state to collect tax revenue down the line in order to pay off their debt? So if you want to keep spending as Germany now, you've got to convince people to buy your debt. And if they're only going to be convinced to buy it, if they think you're going to be able to collect taxes and pay them back later. Once they don't have confidence that that could happen, they're not going to buy your debt. And then the only person left buying the debt is the only institution left buying it is the central bank. And that's when you get necessary monetization of the debt. And that's when you then begin the downward spiral. So a lot of people are private institutions, hedge funds and so on are still buying U.S. government debt. But certainly a growing percentage of it as we see the assets of the Federal Reserve growing are being bought up by our own central bank. And that's certainly an indication of a declining confidence in the U.S. regime to be able to pay this off. If people had total and enthusiastic confidence about the U.S. regime, we wouldn't have to have the central bank buy up a lot of that debt. People would still be clamoring to buy it would be the best deal in town and they'd even be buying it at super low interest rates. But that's clearly being eaten away and that's why there needs to be this monetization going on. So you have to be very aware of the political aspect and assuming that the American U.S. regime will just last forever and everyone will love it and have total confidence in it. Of course, it's an extremely naive thought. Well, not only is Hans Sennholz good at making that point about political money, but Henry Hazard was an absolute master at talking about how inflation benefits certain special interests. And he's got a whole book full of very short essays called What You Need to Know About Inflation. We'll link to that with the show notes. We'll also link to the Sennholz article, which Ryan has referred to a couple of times here. And Ferguson himself in the epilogue to this book, When Money Dies, refers to this. He says at the end, he says, it remains so that once inflation is well underway, it develops a powerful lobby that has no interest in rational arguments. This was as true for Austria and Hungary as for Germany. So this is absolutely true. We all understand the cantalun effect, which says there are changes in relative prices resulting from changing the money supply based upon the specific injection point of that money. Money is never neutral. Mises counsels us. And so you have to understand that there are earlier recipients who actually benefit. So there's a lobbying constituency for money creation. And then also in the epilogue, what I really loved is Ferguson says, you know, what's so interesting is that there's just never that everyone understands that it can't go on forever, meaning the expansion itself. But there's never that perfect time to put the brakes on. And you could say that about the US government supposedly had one of the best economies in our history during the early Trump years, years 2017 to 2018 or 19. And if that were true, why was the Fed's balance sheet barely if at all being reduced and why was debt going up so quickly and why were interest rates still ultra low? I mean, all of those things belie the notion that this was truly a healthy economy in the organic productive sense rather than a healthy economy only in the sense that it's been juiced by fiscal and monetary policy. So Ferguson says that I'm quoting him much as it may have been recognized that stability would have to be arranged someday. And that the greater the delay, the harder it would be. There never seemed to be a good time to invite the trouble of that order. And that's that's what we find ourselves in today. There's never a new set of politicians to say, OK, party's over. It's time for us to pay for all that expansion we did back in 07 or 08 or now in 2020 that day never comes. Yes, the the idea also when you when you read this is that the pain ended in 1923 when they ended the the hyperinflation. But as they knew what happened once they did end the hyperinflation in 1923, that's when the pain started to come after that. And that's when the unemployment started to rise significantly. Of course, there had already been pain for the middle classes who are wiped out. But once that came once that period came to an end, then it started to really affect the working classes started to affect even the government workers and the political situation became very problematic. In fact, Ferguson kind of lists out what has to happen once you end the hyperinflation bankruptcies part time working unemployment strikes hunger demonstrations communist agitation and so on. And all those things did come then in 1925, 1926, 1927 with rising unemployment one estimate at one point was that only 30% of Germans were employed full time in the sort of work they had actually some some training and doing. They weren't just doing some sort of makeshift manual labor to feed themselves. And so there were many years that came after the end of the hyperinflation it wasn't the dawn did not arise with the end of the hyperinflation in 1923. There was a long night that came after that and didn't really even arrive until about 1948. Well, another excellent point by Ferguson in this book echoes one that you do also make so well, which is the cultural and social implications of what we would consider anyway, crazy monetary policy and the left likes to bash materialism and consumerism. And maybe with some justification in modern American society. But what we forget is the opposite. In other words, when things aren't consumerist materialist when things are actually very hard scrabble, and people are scraping to survive as this book so eloquently demonstrates there is a huge amount of cultural rot. And because I mean it's easy to be moral, I guess when you're not hungry, or starving or trying to pay your rent or something. You know, things like rapes increased, of course women oftentimes sold their bodies because that was the means available to them to feed themselves or their children and I don't think anyone could fault them for doing so in a moral sense. It's really quite remarkable how we don't talk about the effects of monetary policy in terms of the broader social and cultural ramifications. Well, and it really highlights the necessity of having some sort of medium exchange that you can use and rely on and which helps the economy function. And this is point of course, any economist may not just Austrians is that if you want to have a well developed industrialized economy you've got to have some sort of medium exchange that functions to really facilitate the movement of goods and services. And once you get away from that, it becomes very problematic and Ferguson notes in a fun turn of phrase that basically every morning the average person would have to engage in complex mathematical calculations just to keep a body and soul together. So if you want to figure out where can I buy food today, how do I get there on the train? How do I accomplish today's basic errands? You had to multiply all sorts of figures together in order to guess about what the prices would be that day and so on and this is just not how an economy can function. And again, it depends on who can who controls what sorts of resources as well those who control food and food resources and basic farm implements for example, or the source of things that you need to buy when you're at a very low subsistence level. And those people tend to suddenly do quite well for themselves. Artists suddenly are bankrupt and destitute. And this is a really just in many ways just a result of the fact that nobody is willing to engage in any sort of higher level economic activity anymore, because they can't think two or three steps down the road, because they can't make calculations. And without that you have a similar problem that you have with socialism where how do I invest my money? What do I do with it? What do I do now? Instead everyone just unloads their money as fast as they can and in order to buy things with the hopes that maybe something will improve later on. And so there's no real economic planning for the future anymore. Obviously there's no saving. There's no real investment. Certainly not economy-wide outside the few classes that are managing the benefit. Well, ladies and gentlemen, the book is When Money Dies by Adam Ferguson, an Englishman. He wrote this book back in 1975, but I would like to add that he wrote a new forward to it in 2010 where he actually brings up quantitative easing. So he does recognize that there are different euphemisms for deficit financing in electronic era. And so it doesn't really matter in his view whether the lack of monetary discipline is necessity. Let's say war. I don't think most wars are necessary, but we can understand that. Or profligacy, which I certainly think our own federal government here in the United States is guilty of. If you follow me on Twitter at Jeff Deist, all one word, J-E-F-F-D-E-I-S-T, PM me, send me a message and I will send you a link where you can get a free copy of this book, Send Your House. So there's your Christmas reading for you. I wish it was a little more cheery. You can also, at that same link, if you choose to, check a box to get a copy or multiple copies of Henry Hazlitt's Great Economics and One Lesson sent to you. Again, no charge. We want to get these books out there. That's one of our big projects. And in fact, Ryan for 2021 will be in really being out there and having some events which are designed to create a counter narrative to what's going on with money in the United States. Because I think we're in a very dangerous time and telling a different story about money is one of the most important things which I hope the Mises Institute can do or serviceably or competently well. We're also going to provide some show notes today with a link to an article by Hans Sennholz, which Ryan mentioned earlier. We're going to provide a link to some Henry Hazlitt articles on inflation, which is just phenomenal. And some of you may be familiar with the name in the econ or financial Twitter universe, Lynn Alden. She's a young woman who's writing a lot about money and what's happening in markets today. So I'm also going to link to an article of hers at Seeking Alpha, which might require you to give an email address. I'm not sure. But it's on the three types of inflation, namely monetary asset price and consumer price, which I thought was one of the best expositions I've ever read of these three different varieties. And why, you know, that when the Paul Krugmans of the world say, oh, there's no inflation, you don't have to worry about anything, they're actually not correct. You just have to look at what kind of inflation we're talking about. So all that said, Ryan, I want to thank you for your time today. I think this is a really fascinating book and a great discussion. And I want to wish all of you ladies and gentlemen, a great weekend. I'll see you guys next week.