The Weimar Republic is post WWI Germany. They had a revolution that was started by 3 sailors who pretty much started a coupe. Under the Weimar Republic the political atmosphere was a lot like we have here in the U.S., a lot of left and right wing people trying to get along. The Weimar Republic used a currency called the “Papiermark”. The Papiermark quickly devalued by going from 4.2 per U.S dollar to over 1 trillion per U.S dollar. The reason this currency was devalued so much was because they couldn’t stop printing money to pay their debts. The German public was completely unaware of all the money being printed. Later on they would start using the “Rentenmark” which was backed by the value of land. Eventually Germany became a member of the League of Nations with veto power. Over a period of just a couple of years the Rentenmark had the same issues as the Papiermark and started devaluing again. This is eventually what led to WWII Germany.
The general public, and I would even venture to say 99% of everyone in this country, does not know that the U.S. credit rating was lowered from an AAA to an AA rating along with other nations on July 13th of this year, some of whom are having riots in the streets as we speak. With the growing national debt reaching an even higher percentage of our GDP, some say 89%; we become an even higher risk to default. No one would loan you money to buy a house with that type of debt to income and neither would another country.
With our current policy over the last 30 years we’ve been taxing and spending our country away into debt oblivion. Now that the rest of the world is refusing to or at least staying away from buying U.S. debt, we now have to look at the Federal Reserve to bail us out and stimulate the economy. Not many people know that the Federal Reserve is not a U.S. government entity and also that it loans us our own currency at an interest rate.
In order to stimulate the economy the Federal Reserve will be printing money and buying its own bonds in order to keep interest rates low and because the U.S. has almost reached its “Debt Ceiling”, this won’t be voted on again until January.
This is where we are starting to repeat the Weimar history. Since the debt ceiling has almost been reached, the U.S. credit rating has been downgraded, foreign countries will not favor loaning the U.S. money, and we’re almost at 100% of our GDP with our debt, we have to start printing our own money to be able to pay our bills. This will devalue our currency even more. This means that a company like General Mills will be required to pay more for the grain they use to make cereal and the price will then be passed onto the consumer, but wait, are our wages going up? No, our wages will not be going up, our people will have a harder time just providing the basics and this could get out of control very quickly. We could very easily go into hyperinflation which is when the value of the dollar declines so quickly that it becomes harder for the markets to respond and prices skyrocket daily or even possibly hourly, and this ultimately leads to the collapse of a currency. The Weimar Republic only lasted from 1918-1933 and had two currency collapses.
In my final thoughts I ask, what is it that we can do to stop this? Considering George Soros gave the U.S. an ultimatum (http://www.youtube.com/watch?v=TOjckJWqb0A) that we either have a managed decline of the dollar or that the world will do it for us, George Soros is responsible for collapsing the “British Sterling”, and George Soros is also a friend and mentor to President Obama, I think that we have to take action quick. We should all write our Congressman and woman, our Senators, and the President and call for an impeachment and congressional hearings. What is happening here, if it’s not Treason, its borderline Treason. The President of the United States is purposefully trying to collapse our economy, do harm to its citizens, and possibly enslave us. We need to actually take some responsibility and start cutting our government so that we can have a balanced budget. Unfortunately we’ll probably have riots in the streets by the Unions like is happening in the UK and France because they have had to cut back spending in order to repair their credit rating as well. This is not an easy solution nor is it something that I think will actually be done, even under our new Republican leadership. So our choice is to become like the Weimar Republic or to stand up, tighten our belt, and realize that it will be hard at first, but like everything worthwhile we’ll enjoy the rewards.
Sources:
http://www.wnd.com/?pageId=188885
http://www.reuters.com/article/idUSTRE6A12IA20101103?feedType=RSS&feedName=topNews
http://economix.blogs.nytimes.com/2010/03/15/what-happens-if-americas-credit-rating-is-downgraded/
http://www.wealthdaily.com/articles/us-credit-rating-downgraded/2594
http://news.yahoo.com/s/nm/20101028/ts_nm/us_usa_fed
http://en.wikipedia.org/wiki/Weimar_Republic
