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Subject:Re: [socialcredit] Re: a "well-researched" article
Date:Monday, June 8, 2009  15:38:00 (+0100)
From:Kenneth Palmerton <kenpalmerton @................uk>

In-Reply-To: <002801c9e714$4353fe30$1181c67c@HomePC>
Hi William.

The German post WW1 inflation was known to have been deliberately 
fomented. What was not generally realised before Galbraith blew the 
whistle was that when it had done its work it was brought to an immediate 
halt, overnight.

So the bogy man story we are all threatened with should have no further 
effect, should it ?


-------- Original Message --------

From: "William Hugh McGunnigle" <wmcgunn@maxnet.co.nz>
To: <socialcredit@elistas.com>
Date: Sun, 7 Jun 2009 14:04:10 +1200

HI William Ryan
                         I was interested to see your comments about the 
inflation during the American Civil War, but fail to see any connection 
between that and the Wiemar Republic's inflation of the early 1920's. The 
latter, as far as I understand, was a deliberate and premeditated action 
calculated to devalue the German mark so that the reperations demanded by 
the treaty of  Versaille could by paid off in worthless currency. in is it 
was singularly successful but it destrroyed the savings of the thrifty 
Germans and led to the political instability in Germany that was 
exploited by Hitler and the Nazi party. The American Civil War inflation 
an accidental product of the need for finance to prosecuted the war as far 
as I can understand it. I do not believe it was a deliberate policy 
to happen unlike the German case. It is significant that all wars create 
some form of monetary "inflation" simply because of the need to provide 
necessary funding to prosecute the war, funding that is used to develope 
industrial base to provide the weapons for that war. Those employed in 
developing industries inflate the economy because thay have surplus money 
spend. That inflation usually takes place after the war when the money 
accumulated by those employed unable to be spent in war time becomes 
available as peace takes hold and economies return to "normality" Correct 
if I am wrong in these observations
              Bill Mc Gunnigle
----- Original Message ----- 
From: <william_b_ryan@yahoo.com>
To: <socialcredit@elistas.com>
Sent: Saturday, May 30, 2009 9:11 AM
Subject: [socialcredit] Re: a "well-researched" article

Thank you for these numbers, Jamie, and the links to their source.  £620.7 
billion and £671.4 billion are both significantly greater than the number 
Hutchinson uses, £454 billion.  £300 billion per annum in gilts, accepting 
this number as accurate, and I'm not prepared to accept it without 
verification, is considerably less than fifty percent of spending, not the 
sixty-five percent that Hutchinson claims.  And the percentage of 
"seigniorage" spending by Weimar was, according to Sennholz, was 99.2 
percent, not the fifty percent that Hutchinson claims.  It appears that 
argument is way off base, when the actual numbers are considered, not the 
numbers he apparently dreamed up.  So Hutchinson's argument, and Ms. 
essay based on Hutchinson's argument, are just up there in La La Land.

I would like for someone to address both Schacht's and the Zimbabwe 
Bank's arguments that their respective hyperinlations were caused by 
outsiders short selling their currencies, rather than their own respective 

---------------------original message---------------------

Subject: Re: [socialcredit] a "well-researched" article
Date: Friday, May 29, 2009  08:13:17 (+0100)
From: Jamie Walton <eurojamie @.....com>

Hi all,

As I understand the 'quantitative easing' plan in the UK, - as I recall it 
from reading the articles on it in the (UK) Financial Times that I bought 
the day after it was agreed (I don't have the copy with me now) - the Bank 
of England would create money to buy UK Treasury bonds (called 'gilts') 

In this case, I would think that the money would go to the 
bondholders/bondsellers, and what they do with it after that is up to them 
(they may buy more UK Treasury bonds?).  I'm not sure how this could be 
funding the UK government's budget deficit (except perhaps indirectly, 
through more taxation and borrowing).

I don't know where the figure of British government spending of £454 
comes from, the estimate for the current FY 2008-09 (budgeted) figure was 
total of £620.7 billion (from page 238 of the report/page 246 of the file: 
and the projection for the next FY 2009-10 (budgeted) figure is a total of 
£671.4 billion (from: 

With regard to the North's 'Greenbacks'; that period was during a war, and 
as far as I know the general rule is that wars are inflationary.  I'm not 
sure if it's possible for an 11% portion of government expenditure (maybe 
of total 'national' expenditure at the time??) to be the cause of the 75% 
inflation rate stated.  I would think other factors would have a greater 
effect.  I understand that $450 million were authorised, and slightly less 
than $450 million were ever issued (except for replacements of worn 
'notes'), and this was later limited to $300 million authorised to be 
outstanding and in circulation at any one time.

With regard to the South's 'Greenbacks' (obviously also during a period of 
war), I understand that these were issued as promises to pay (with 
later (after the war), not issued to pay now (like the North's 
'Greenbacks'), and that about $1,550 million (more than 3.4 times more) of 
these promises were issued, with no limit (there may have been 
as well?).  I have heard that the Southern States were not all happy 
families; they did not co-operate very effectively and tried to compete 
each other, even when they were supposed to be allies.

The comparisons with Weimar Germany seem unfortunate, and I'm not sure if 
there are any parallels between what happened then and what's happening 
(or what happened during the American Civil War).  I think that to do that 
question justice would take many months of research and end up being a 
and who has time to do that? - not me!

2009/5/28 <william_b_ryan@yahoo.com>

Ellen Brown's recent essay, "Another look at the Weimar Hyperinflation" is 
archived at
http://www.geocities.com/new_economics/brown-05-19-09.txt and elsewhere on 
the Internet.

I think it would be interesting for us to discuss some points in the essay.

The first I would to discuss is this assertion, which she attributes to a 
"well-researched article" by Martin Hutchinson.  Now, the article may in 
fact be "well-researched," but Hutchinson supplies absolutely no sources 
references for any of the assertions in the article, which is archived at
http://www.geocities.com/new_economics/hutchinson-04-09-09.txt  so we must 
take as a matter of faith that it is "well researched".  We must give 
complete credence to what this goldbug marketer of "investment advice" has 
to say.

According to Huntchinson, "The really chilling parallel is that the United 
States, Britain and Japan have now taken to funding their budget deficits 
through seigniorage. In the United States, the Fed is buying $300 billion 
worth of U.S. Treasury bonds (T-bonds) over a six-month period, a rate of 
$600 billion per annum, 15% of federal spending of $4 trillion. In 
the Bank of England (BOE) is buying 75 billion pounds of gilts over three 
months. That's 300 billion pounds per annum, 65% of British government 
spending of 454 billion pounds. Thus, while the United States is 
Weimar German policy (50% of spending) quite rapidly, Britain has already 
overtaken it!"

Ms. Brown informs us that "seigniorage" means that government is 
printing and spending money.

I do not find it astounding that some 15% of federal spending is being 
effectively printed and spent.  We do have some precedent.  The Greenbacks 
that were famously printed and spent during the Civil War represented only 
about 11% of federal spending during that time.  My source for this number 
is a book published in 2004, *An Empire of Wealth,* by John Steele Gordon, 
page 196.  During that time the annual inflation rate was about 75%, which 
Gordon described as being "manageable," which it was, certainly in 
comparison to the contemporary experience in the Confederacy.  The 
Confederacy printed and spent, through their central and state 
more than half of their budgets, in a much higher rate of inflation, 
approaching hyperinflation in the later stages of the war.  The 
are silent on the experience of the Confederacy's "greenbacks."

What I do find astounding is the assertion that Britain is currently 
65% of its spending through the printing of money, rather than 
conventionally, through taxation and borrowing.

I do not reject this remarkable assertion out of hand, but I do expect to 
see some proof that it is in fact occurring.  I would like to see the 
numbers in their original sources.  Any help in this regard from our list 
members would be welcomed.

I have been directed to an essay, "Hyperinflation in Germany, 1914-1923," 
Hans Sennholz, which is archived at
http://www.geocities.com/new_economics/sennholz-2006.txt ,
which has numbers that are quite contrary to the numbers presented by Mr. 

"While government expenditures rose by leaps and bounds, the revenue 
suffered a gradual decline until, in October 1923, only 0.8 percent of 
government expenses were covered by tax revenues. For the period from 1914 
to 1923 scarcely fifteen percent of the expenses were covered by means of 
taxes. In the final phase of the inflation the German government 
a complete atrophy of the fiscal system."

So, according to Sennholz, in October 1923, only 0.8% of government 
were covered by tax revenues, which means that 99.2% were not.  I would 
presume that most if not all of that 99.2% was covered by the printing of 
money rather than conventional borrowing.  In any case that would be far 
greater that the 50% that Huntchinson claims was "Weimar policy."

And would put the lie to the premise to Ms. Brown's question:

"If Britain is already meeting a larger percentage of its budget deficit 
seigniorage than Germany did at the height of its hyperinflation, why is 
pound now worth about as much on foreign exchange markets as it was nine 
years ago...?"

The second point I would like to discuss is the assertion that Weimar's 
hyperinflation was caused by the short selling of the mark:

"What actually drove the wartime inflation into hyperinflation, said 
Schacht, was speculation by foreign investors, who would bet on the mark's 
decreasing value by selling it short."

In this Ms. Brown is quoting Stephen Zarlenga who is supposedly sourcing 
Hjalmar Schacht's 1967 book, *The Magic of Money.*  Now, I don't know if 
Schacht said that or not in his book.  The University of Houston Anderson 
Library has the book, which I plan to consult shortly.  If Schacht indeed 
did say it, I would be inclined to believe it was self-serving, inasmuch 
he was very much involved with the German central bank during the time of 
the hyperinflation.  It would be a way of shifting blame away from himself 
and his colleagues.

While I find it believable that short selling of the currency may have 
involved during a time of hyperinflation, I find it difficult to 
how it could be the cause of the hyperinflation.

I would welcome anyone explaining to me how this could be the case.

I find it ludicrous that Ms. Brown refers to Henry C. K. Liu as an 
"economist."  He is by educational and professional background an 
who runs an investment fund out of New York.  He can barely put together a 
coherent sentence in English, as is evidenced by various postings to the 
Post Keynesian list, but employs teams of researchers who put together 
literate multi-thousand word essays that he posts under his name all over 
the Internet.  I've found that they are predominantly cut and paste 
from other people's work.  Whatever they are, they can hardly be 
to be authoritative on any subject.

He has for years pushed Warren Mosler's "State Theory of Money" theory to 
the Chinese Communist regime.  I've called, for good reason, Mosler's 
to be warmed over Nazism.  There's nothing original in it, though in the 
beginning Mosler thought he was a genius who discovered something new. 
Mosler's and Liu's presentation of Hitler as being a Lincoln Greenbacker 
not mere apologetic for Nazism, but for Greenbackerism, which, in its very 
essence, certainly large aspects of it, is Nazism in disguise.

And, finally, Zimbabwe.  Now, that unfortunate land, is experiencing the 
worst hyperinlation in the history of the world.  Ms. Brown attributes 
not to the incompetence of the Zimbabwean authorities, but takes--lock, 
stock and barrel--the statement from the Zimbabwean central bank that:

"the hyperinflation was caused by speculators who manipulated the 
foreign-exchange market, charging exorbitant rates for U.S. dollars, 
a drastic devaluation of the Zimbabwe currency."

It is more reasonable to believe that the crisis was precipitated in 2001, 
with the confiscation of the white-owned farms.  The farms were handed 
to Mugabe's cronies, who knew nothing and cared little about farming.  And 
the farms' employees were not loyal to their new overseers.  Farm 
and exports plummeted, which were the main source of foreign exchange.  
revenues declined significantly.  It is reasonable to suppose that Mugabe 
tried to keep things going by printing and spending money, and things 
continued to spiral out of control from that point onward.

Some introductory materials to the discussion topic of this list are at
You're subscribed to this list with the email wmcgunn@maxnet.co.nz
For more information, visit http://www.eListas.com/list/socialcredit

Some introductory materials to the discussion topic of this list are at
You're subscribed to this list with the email 
For more information, visit http://www.eListas.com/list/socialcredit

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