Federal Excess

The only thing that is new, is the history we haven’t read..

We all know that between 1921 and 1923 hyperinflation ran amok in Germany – in fact by 1923 the mark was worth one-trillionth of it’s value from 1914! The government at the time was not inclined to raise taxes and so,  as can be currently seen, ran huge budget deficits – interest rates were pegged well below inflation and fiat money (printing money with no backing) was epidemic.

Currently both the USA and the UK are funding deficits in the budget by the same method – just printing more and more paper. The US is approaching the same criteria as hyperinflation Germany and the UK has already past the post. The question is, therefore, why isn’t the US and the UK seeing the same inflation trend? The answer, it turns out, is quite simple – foreign investors selling the mark short (betting on inflation).  This was possible, as is now, because the private banks lent large amounts, returning interest to the banks.

So what was the turning point for Germany? How did it achieve such a turnaround in such a short time-frame? Hitler! He issued ‘Labour Treasury Certificates’ – millions of Germans we employed to reconstruct Germany and paid with the Treasury Certificates. As these certificates did not trade on foreign markets there was no outside speculation – they were stable.

The problem, it would appear, is therefore the banks! Lincoln realised this, but his attempt to disband the private bank cartel known as the Federal Reserve ended with his death. The same with JFK and his executive order 11110.

The currently insolvent California could learn a lot from history – but it doesn’t even have to go that far back – only three out of fifty states are currently solvent, one of them being North Dakota. Since 2000 the GNP there has grown 56%, personal income is up 43% and it actually has a budget surplus of $1.2 billion – how has North Dakota managed to beat the trend? It has it’s own State Bank – The Bank of North Dakota, established in 1919.

Once upon a time…

Almost a century ago, the then billionaire John D Rockefeller (founder of Standard Oil) financed Henry Ford in the mass production of the internal combustion engine and the car factory  that Ford started in 1908..  clearly this was a good match and a profit zone from two fronts for Rockefeller. Initially they had to overcome the patents applied to both the engine and the steering wheel held by the inventor, George B Selden

By 1909 the Ford Model T had a steering wheel, and in 1914 Ford announced the $5 a day pay for workers to man the assembly lines – growth was exponential, the workers ‘managed’ by Ford’s ‘Service Department’ headed by Harry Bennett from 1930 until Henry Ford died in 1947

In 1941 the US government gave Ford $200 million to build a bomber factory at Willow Run – known locally as ‘Will it run” the factory only produced 8,000 bombers during the entire war, not the one an hour quoted by Ford – was there a conflict of interest? Ford factories existed in both Germany and France – and Standard Oil supplied the fuel….

 

 

 

Recommended reading – ‘Ford: An unconventional biography of the Men and their times’ – Herdon)