Adam Ferguson’s 1975 text of the social and moral collapse of Germany during the Weimar Republic is a must read for 2010. He details how Europe’s most austere and respected society disintegrated into belligerence, upheaval and chaos with hyperinflation. While hyperinflation has not occured yet in America, economic upheaval is guaranteed.

Ferguson’s When Money Dies: The Nightmare of the Weimar Collapse is available free here. A few excerpts are included below:

In reference to the only method of preventing complete disintegration of a society:

This is, I believe, a moral tale. It goes far to prove the revolutionary axiom that if you wish to destroy a nation you must corrupt its currency. Thus must sound money be the first bastion of a society’s defence.

Regarding moral excess and the effect of hyperinflation:

The question to be asked — the danger to be recognised — is how inflation, however caused, affects a nation: its government, its people, its officials, and its society. The more materialist that society, possibly, the more cruelly it hurts.

Loss of purchasing power of the mark over 5 years:

In October 1923 it was noted in the British Embassy in Berlin that the number of marks to the pound equalled the number of yards to the sun. Dr Schacht, Germany’s National Currency Commissioner, explained that at the end of the Great War one could in theory have bought 500,000,000,000 eggs for the same price as that for which, five years later, only a single egg was procurable. When stability returned, the sum of paper marks needed to buy a gold mark was precisely equal to the quantity of square millimetres in a square kilometre. It is far from certain that such calculations helped anyone to understand what was going on; so let the un-mathematical reader take heart.

Politicians’ rhetoric loses its luster during financial calamities as each coming crisis is worse than the last:

… Mr Lloyd George writing in 1932, who said that words such as ‘disaster’, ‘ruin’, and ‘catastrophe’ had ceased to rouse any sense of genuine apprehension any more, into such common usage had they fallen. Disaster itself was devalued: in contemporary documents the word was used year after year to describe situations incalculably more serious than the time before.

Inflation directly caused animosity and political unrest:

Undoubtedly, though, inflation aggravated every evil, ruined every chance of national revival or individual success, and eventually produced precisely the conditions in which extremists of Right and Left could raise the mob against the State, set class against class, race against race, family against family, husband against wife, trade against trade, town against country…. Partly because of its unfairly discriminatory nature, it brought out the worst in everybody…

All you need to read this book is an internet connection and a willingness to be educated. Please bear in mind while reading how much safer a deflationary period would be to the health of our society than profligate money printing and hyperinflation. America’s future has not yet been written. Don’t allow it to go the way of the Weimar Republic.

It takes courage to prevent hyperinflation. Politicians have little courage. Just consider how Zimbabwe claimed to “solve” inflation by redenominating its currency and restricting bank withdrawals.