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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
 Posted - 09/08/2008 : 21:52:44
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I've got to admit, that as I load up on precious metals and other items that may not be available in the not to distant future, it is hard to not think of most everything in dollar terms. Ok, this is natural I guess, having been raised in the US, and having earned and spent dollars my whole life. But what happens when the currency becomes irrelevant? I keep trying to establish "pegs" of value in my thinking, like one pre 64 US quarter = 1 gallon of gas in it's day, and roughly still does today. Or, one oz. of gold bought a nice toga, belt and a pair of sandles in Roman times, and will buy a (very nice) mens suit, belt and pair of shoes today.
It's hard to retrain your mind to think of price/value in a different manner than what it has been accustomed to your entire life. Kind of like trying to do long division with Roman numerals, or, God forbid, multiply hexidecimal numbers.
So how does one prepare themselves for a future where the standard medium of exchange that we've always known, is no longer a viable medium for exchange? Sure, there is Zimbabwe, but the circumstances there bear very little resemblence to our situation. They're a third world country, and we are (for the moment), a first world country.
Germany in the 1920's is a much more comparable situation to where we stand today, politics set aside, I'm referring to the level of societal advancement and the standard of living.
It seems to me that if we would like some insight into how to come through a currency collapse, the Weimar Republic should provide some insight. Who lost everything, and why? Who came through ok? And who came out on top (again, economically, forget politics), after the dust settled?
I'll be spending some time over the next week or so trying to see what nuggets of wisdom I can gain from their experience, and I'll share what I find here. Anyone care to join me? And, can anyone suggest a more recent or more relevant currency collapse model to study?
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"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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kavajava
Penny Collector Member
USA
490 Posts |
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
 Posted - 09/09/2008 : 07:24:08
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MEMORIES 1
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MEMORIES 2
Bartering became more and more widespread . . . A haircut cost a couple of eggs . . . A student I knew . . . had sold his gallery ticket . . . at the State Opera for one dollar to an American; he could live on that money quite well for a whole week. The most dramatic changes in Berlin's outward appearance were the masses of beggars in the streets . . . The hard core of the street markets were the petty black-marketeers ... In the summer of that inflation year nay grandmother found herself unable to cope. So she asked one of her sons to sell her house. He did so for I don't know how many thousands of millions of marks, The old woman decided to keep the money under her mattress and buy food with it as the need arose - with the result that nothing was left except a pile of worthless paper when she died a few months later.
As soon as the factory gates opened and the workers streamed out, pay packets (often in old cigar boxes) in their hands, a kind of relay race began: the wives grabbed the money, rushed to the nearest shops, and bought food before prices went up again. Salaries always lagged behind, the employees on monthly pay were worse off than workers on weekly. People living on fixed incomes sank into deeper and deeper poverty.
A familiar sight in the streets were handcarts and laundry baskets full of paper money, being pushed or carried to or from the banks. It sometimes happened that thieves stole the baskets but tipped out the money and left it on the spot. There was dry joke that spread through Germany: papering one's WC with banknotes. Some people made kites for their kids out them.
Egon Larsen, a German journalist, remembering in 1976
MEMORIES 3
At eleven in the morning a siren sounded. Everybody gathered in the factory yard where a five-ton lorry was drawn up, loaded with paper money. The chief cashier and his assistants climbed up on top. They read out names and just threw out bundles of notes. As soon as you caught one you made a dash for the nearest shop and bought anything that was going....
You very often bought things you did not need. But with those things you could start to barter. You went round and exchanged a pair of shoes for a shirt, or a pair of socks for a sack of potatoes; some cutlery or crockery, for instance, for tea or coffee or butter. And this process was repeated until you eventually ended up with the thing you actually wanted.
Willy Derkow, who was a student at the time, remembering in 1975.
MEMORIES 4
I vividly remember pay days at that time. I used to have to accompany the manager to the bank in an open six-seater Benz which we filled to the brim with bundles and bundles of million and milliard mark notes. We then drove back through the narrow streets quite unmolested. And when they got their wages, the workmen did not even bother to count the number of notes in each bundle.
A worker in a transport firm in Berlin
MEMORIES 5
My father began to pay wages largely in goods, mostly foodstuffs. My mother stacked these in the flat where we lived. Livestock, such as chickens, was kept in the bathroom and on the balcony. Flour, fats etc. were bought in bulk as soon as money became available. My mother had to parcel all this food out in rough proportion to the employee's entitlement. Come pay-day the workforce assembled in. the flat in groups for their handouts.
A man whose father owned a small business
MEMORIES 6
One fine day I dropped into a cafe to have a coffee. As I went in 1 noticed the price was 5000 marks - just about what I had in my pocket. I sat down, read my paper, drank my coffee, and spent altogether about one hour in the cafe, and then asked for the bill. The waiter duly presented me with a bill for 8000 marks. 'Why 8000 marks?' I asked. The mark had dropped in the meantime, I was told. So I gave the waiter all the money I had, and he was generous enough to leave it at that.
The memories of a German writer
MEMORIES 7
We were out playing football and one of my firends said: 'I'm going to the shop to buy a couple of bread rolls.' he had a 500,000 mark note... But he only came back with one, because a roll now cost 400,000 marks.
The memories of a Karl Nagerl, who was a school boy in 1923
MEMORIES 8
Two women were carrying a laundry basket filled to the brim with banknotes. Seeing a crowd standing round a shop window, they put down the basket, for a moment to see if there was anything they could buy. When they turned round a few moments later, they found the money there untouched. But the basket was gone.
The memories of a German writer
MEMORIES 9
It was in many ways a cheerful time for the young. When I grew up we were taught to save money and not throw it away. But in the worst days of the inflation this principle was turned upside down. We knew that to hold on to money was the worst thing we could do. So this allowed us, with a good conscience, to spend whatever we had available.
A currency dealer
MEMORIES 10
As soon as I received my salary I rushed out to buy what I needed. My daily salary was just enough to buy one loaf of bread and a small piece of cheese .... A friend of mine, a vicar, came to Berlin to buy some shoes with his month's wages for his baby. By the time he arrived, he only had enough to buy a cup of coffee.
A German woman writing about the effects of hyperinflation
MEMORIES 11
My father had sold his business during the war, together with all the real-estate property he owned, and retired from business. He was, by middle-class standards, a rich man, and intended to live on the income from his investments. These were mainly life-insurance policies, fixedvalue securities and a mortgage on a large agricultural estate, whose yield of 15,000 marks per annum would have provided a very good income. All this depreciated, of course, to zero - my father only managed to keep his head above water by resuming work. "
A writer remembering the effects of the inflation on his father
MEMORIES 12
Countless children, even the youngest, never get a drop of milk and come to school without a warm breakfast ... The children frequently come to school without a shirt or warm clothing or they are prevented from attending school by a lack of proper clothing. Deprivation gradually stifles any sense of cleanliness and morality and leaves room only for thoughts of the struggle against the hunger and cold.
Report by the Mayor of Berlin, 1923
MEMORIES 13
A friend of mine was in charge of the office that had to deal with the giving out of ... pensions ...in the district around Frankfurt.... One case which came her way was the widow of a policeman who had died early, leaving four children. She had been awarded three months of her husband's salary (as a pension). My friend worked out the sum with great care ...and sent the papers on as required to Wiesbaden. There they were checked, rubber stamped and sent back to Frankfurt. By the time all this was done, and the money finally paid to the widow, the amount she received would only have paid for three boxes of matches.
A German woman who ran a Christian relief centre for the poor
MEMORIES 14
Billion mark notes were quickly handed on as though they burned one's fingers, for tomorrow one would no longer pay in notes but in bundles of notes... One afternoon I rang Aunt Louise's bell. The door was opened merely a crack. From the dark came an odd broken voice: 'I've used 60 billion marks' worth of gas. My milk bill is 1 million. But all I have left is 2000 marks. l don't understand any more'.
E Dobert, Convert to Freedom (1941)
MORE MEMORIES
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Edited by - horgad on 09/09/2008 07:25:46 |
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kavajava
Penny Collector Member
USA
490 Posts |
Posted - 09/09/2008 : 13:38:31
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quote:
Originally posted by horgad
l don't understand any more
Thanks for the post horgad--couple of excellent links... |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 09/09/2008 : 16:56:48
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Here is a different take on the question "How do I value items when money isn't worth the paper its printed on?"
Get ahold of a reprint of an old Sears Roebuck Catalog, look up the prices, then think of the prices in relation to silver and gold coins that circulated at the time.
Examples:
A teddy bear sells for 50¢ in the catalog, turn that 50¢ into two silver quarters.
A shaving kit sells for $1.50 in the catalog-think six silver quarters, and so on.
This way you can still think of prices of goods in dollars and cents, only you think of them in real dollars and cents, not the unbacked dollars that passes for money today. |
Edited by - pencilvanian on 09/09/2008 16:58:00 |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 09/09/2008 : 17:18:14
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quote:
Originally posted by pencilvanian
Here is a different take on the question "How do I value items when money isn't worth the paper its printed on?"
Get ahold of a reprint of an old Sears Roebuck Catalog, look up the prices, then think of the prices in relation to silver and gold coins that circulated at the time.
Examples:
A teddy bear sells for 50¢ in the catalog, turn that 50¢ into two silver quarters.
A shaving kit sells for $1.50 in the catalog-think six silver quarters, and so on.
This way you can still think of prices of goods in dollars and cents, only you think of them in real dollars and cents, not the unbacked dollars that passes for money today.
Excellent suggestion, thanks Pencilvanian. Plus it's got the added bonus that a Pre-Fed Sears catalog is almost exclusively genuine necessity items. No I-Pods, Chia Pets, or the billions of other nonsense "must have" items that are marketed to us these days.
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"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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Cody8404
Penny Hoarding Member
USA
602 Posts |
Posted - 09/09/2008 : 18:18:26
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To prepare your mind for such things your mind must be quick. You must also be able to figure values and know how to negotiate. People in most of the world know how to haggle, most people here don’t.
I have a hard time looking at gas at $4 a gallon. I still frequently say $3. My mind is just not fast enough to keep up. I guess I need to do more mind games and other things. We can learn lessons from before, but every thing is different.
1923 – One woman decided to sell all she could and buy anything of value. She bought and entire factory’s supply of stainless steel bed pans. They were worthless for trade no one wanted them.
Small Farmers fared well, if they lived far enough from the city not to have everything stolen from them. People would load up furniture tables, dressers and the like in a wheel barrow and walk all day and then try and trade what they had for potatoes or any food and then walk back the next day.
Draw back from these are multitudinous. Who has a wheelbarrow? Do people have any furniture others would want or is it just pressed wood chips? Do people have anything worth trading? Remember no power for Cell Phones, I-Pods, DVD players, TVs. Barter items can’t be powered, unless the power goes with it. They must have some value that people would want. In this day and age think also what can I authenticate? How can I know this silver coin I am being handed is real and not counterfeit? There are a lot of counterfeit silver coins coming back from China as Olympic souvenirs.
If the power went out today and was out for three days, what would people eat? How would they stay warm? How could they sustain this for six months or a year or more?
I hear people say, “We would just pack up and go live off the wild.” When was the last time you went to the wild? The game is gone. The trees are so sick they burn in Wild Fires from January to November every year. The campgrounds can’t handle a normal holiday weekend when everyone takes their own trash out.
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Awake, O kings of the earth! Come ye, O, come ye, with your gold and your silver, to the help of my people, to the house of the daughters of Zion, to the help of the people of the God of this Land even Jesus Christ. |
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Delawhere Jack
1000+ Penny Miser Member
USA
1680 Posts |
Posted - 09/10/2008 : 18:24:33
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| Thanks for the replies guys. I guess maybe I was looking for wisdom that should be quite obvious. Those who come out the other side in good shape will be those with the ability to produce their own food, stay sheltered, fed, warm and away from those who would take what they have. |
"Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty." Thomas Jefferson
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Group research project, Weimar Republic
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