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Meet the Weimar Dollar

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Message Michael Fox

Where is this $150,000,000,000.00 "economic stimulus package" coming from?  Let's make this really clear.  The United States government does not have any money.   On the contrary, the national debt now stands at $9.2 trillion dollars, which is more than 61 times more than the "package."  So, as they don't have the money to give, those $600 checks they plan to mail out this spring will literally comprise just printing money.


In order to hand out a mass of cash they don't have, therefore, they have to borrow it.  Consequently, this week Bloomberg reported that rates were going up for long-term treasury notes.  There it is, this deeply-indebted entity – the US Government – is borrowing an additional $150 billion on top of that $9.2 trillion they already owe, then handing it out. 


At the same time, in anticipation of this distribution of just printed cash, the price of oil on the commodities exchange promptly went up, to over $90/barrel.  You can bet your Buick it will bust the $100/barrel mark before May, and gasoline at the pump will be $4/gallon just in time to suck up all that just printed cash.  Get the picture?  It's not a new one, either.  The last time they sent out a few million checks for a few hundred dollars, gasoline went up and stayed inflated for six months – just long enough to suck up all that cash.  So, really, this is just one last chance swindle for the oil industry.  Hand out government money, which is gleaned entirely from debt, then allow the oil companies to keep their prices artificially inflated just long enough to end up the recipients of that money. 

So it's really just embezzlement, isn't it? 


But then what we will have is a national debt, thus increased, in addition to whatever natural increase will occur, to at least $ 9,350,000,000,000.00.  When the country owes that kind of money, what is the currency - in this case the dollar bill in your wallet – really worth?  It is really worth "-1/9,350,000,000,000.00." (Note the minus sign) 


Perhaps this is why it serves the powers that be to drain the educational system.  Too many people, knowing too much algebra, could endanger the maintenance of this sort of economic misbehavior. 


After the Treaty of Versailles, at the conclusion of the First World War, Germany was left with both enormous debt, an infrastructural wreck, and its existing governmental system obliterated, and thus began the period known as The Weimar Republic (if you were educated sometime after the Reagan era, you may want to look it up, History education lacking what it does nowadays).  Much like that moment in Germany's history, the United States now has unprecedented war debt, a crumbling infrastructure, and our Constitution has been fractured in so many bones that many of us don't know what rights we still really have, or even what is or isn't legal!  The Weimar administration in Germany could not cope with a valueless deutschmark, so they kept printing more.  Order needed to be restored and unemployment curbed. Ultimately, we all know how Germany ended up seeking order from that chaos. 

But let's not go there.  Let's back up to the Weimar mark.  We now have the Bush dollar, and that negative-value dollar in your pocket, has, thus far, maintained its value by its vitality in oil trading market.  But the petrodollar is in peril, too, as more and more oil-producing countries seek to sell their oil in euros or rubles.  And now they're just printing more.  Who do you think will mop up the mess?  Who can?  And how well behaved will the American people remain when they can't buy a thing?

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Michael Fox is a writer and economist based in Los Angeles. He has been a corporate controller, professor, and small business entrepreneur. After a life-altering accident, he spent five years learning more about medicine and the healthcare (more...)
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