Transcript - When Money Dies

Author: Adam Fergusson
Title: When Money Dies
Plot: A collection of journal entries from citizens of Germany during their currency collapse (~1914)
Note: Though the content frequently resets with each new journal entry, the information is eye opening

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Full Transcript
Hey, welcome back!

Today I will be reviewing When Money Dies by Adam Fergusson.

During the credit crises in the United States in 2008, there was a shortage on copies of his book and so they sold on eBay for $1,000 each. Yeah... 

I didn't know that when I read my copy and I confess I quickly lost interest in it due to a mis-understanding. I'll explain: what he has done is to incorporate many relevant journal entries into his book. Instead of blending them together chronologically though, he puts them one after the other, which takes you through history in a repeating cycle. Meaning you read entries that start in 1914 and when he gets to 1925, the date suddenly resets and that's confusing for anyone who failed to read his introduction. But after you read his introduction, which is really good, you discover he's trying to avoid being political, by letting the people speak for themselves. In a seperate valiant attempt to avoid being political, which I admire, he cleverly, ignored Germanies' account of the currency collapse and instead read Britains. Because the United Kingdom didn't care about Germany's politics, they just wanted to learn from their mistakes. 

I suggest you get a hard copy of the book for two reasons: One is the re-sale value that I mentioned at the onset of this podcast and the other, is the encyclopedic nature of the book. That way you can underline key book passages and later type up your notes without the repitition that you would experience by listening to the audio. And this is one book where you should take notes because those notes might save your life one day. If such a thing ever happen in your country. 

Some people focus on short-sighted self defense like only taking Karate classes or learning to swordfight. Which might save you from between one and five opponents, while understanding a book like this one will potentially enable to either defeat or save your community.

Furthermore, inderstanding its contents would likely make you one of those rare successful people who profits during economic crisis. This book is a real eye opener! But for anyone who's listening to this podcast, I know that I'm preaching to the choir. You already know this. Survival is about more than food storage, guns, and underground bunkers. It's also about mistake avoidance, knowing what to expect when people's behavior suddenly and inexplicably changes. And so forth...

Adam Fergusson was born in July of 1932 making him 87 years old today. He is a British journalist and author who served one term in the European Parliament as an MEP. He is a brilliant consultant. 

His book was first published in 1975, and later re-released in 2010 due to the 2008 financial crisis. Also known as the credit crisis and the collapse of Lehman Brothers, which happened in the United States.

Fergusson left the paper that was called the Herald to work as the foreign editor of the Statist in 1964, which was a journal for economists and businessmen. This was only 30 years after Germany’s hyper-inflationary period ended by the way, which means he studied this stuff closely at a time close in proximity to when this actually occurred.

I confess I would re-do his book's introduction. If I were him, this is what I would write: 

What I did I was really hard, I was committed to an objective financial analysis of the Hyperinflation in Germany during the early 20th century with an emphasis on avoiding a political discussion, which is tricky. I wanted to present objective information so you the reader so you could draw your own conclusions without imposing my worldview on you.

So what I did was this: I arranged the diaries of German citizens into a chronological order that resets occasionally throughout the book, and since these are diaries, the information is often redundant. So you’ll notice the timeline resets frequently starting with 1915 ending in 1924 and then looping over and over again. But I did this to supply the detail that you can use to draw your own conclusions. However, bear in mind that these journal writing citizens did not understand what was going on, and since I could not rely on the German government to be honest or objective about it, I needed an alternative to their politically charged propaganda. I knew anything they said would conform to their worldviews on government. So I came up with a solution:

I turned to the UK government who had no vested interest in Germany’s politics. They simply wanted to understand what happened, so they could avoid it. And though it wasn’t communicated to the UK citizens, it was committed to public record for the economists to study. Which is how I found it. I then married the two information sources together in the form of raw data for you to study and form your own conclusions... 

And then after saying that just get on with chapter one! Because the next thing he did. Or maybe the worst thing he did was he wrote a really eloquent introduction that transitioned into a mundane collection of journal entries. Which raised expecatations for the book dramatically, which subsequently then went off a cliff.  when you started reading the journal entries ... going from high quality writing to low 
quality writing.

I was confused the first time I read the book until about half-way through because of that. Initially we were off to a great start and then it seemed like we just jumped into the weeds. And I didn't understand what was going on, but I rolled up my sleeves and discected the information, which as it turns out is necessary for this book, anyway. 

I kind of struggled with the rating for this book. But because it is filled with absolutely golden treasures, so I gave it five stars. I view the book as a repository of raw data that needs to be mined, and interpreted. I'll give you an example: 

As you can imagine, at some point, the impoverished German citizens were robbing each other. But to add insult to injury the thieves began burning houses down. At first, I attributed that behavior to thieves who were just such lowlives that they were bitter and angry toward anyone who had anything. Particularly those who had the sense to stockpile goods. But then I figured something out:

Imagine our currency was plummeting in value and every time you got paid you blew your paycheck that same day to maximize purchasing power. And imagine thieves were stealing from citizens as a normal course of life now. How would you instinctively respond to that? Well, you’d start hiding things. And being the resourceful reader genius that you are, after all, you're here. You would do things like rip down your walls and seal your treasures up inside the drywall making it look like you had nothing. And then the thieves would come and go and you’d be able to keep your stuff. 

But the thieves observing that you have an empty house and a full stomach, would become suspicious. How are you doing this? Why aren’t you suffering as much as the rest of us are?

In the beginning they would rip open your couch and take a sledge hammer to your walls and then growing tired of all that work, they’d just start burning down homes to search through the rubble for anything that survived, which is usually the valuables.

But imagine the journal entries of home owners who didn’t understand this. People who didn't stockpile goods, who didn’t bury treasures in their walls, what would they say?

Well they’d write about the trauma of on Monday being robbed, Then on Tuesday the thieves returned and maliciously destroyed their couches, on Wednesday they took a sledgehammer to their walls and on Thursday they burned the house down. These people were confused. In their journal entries the didn't explain why these things were happening, because they didn't know why they were happening.

If there is a saving grace for us, it's that in the early 1900's most people bought and stored precious metals in their homes and now most people keep those in safe deposit boxes in banks, and with stocks and bonds, which are paper, thieves would be fools to burn down anything now. 

Artwork, cash, foreign currencies would make burning down American homes especially foolish because Americans don’t value gold and silver the way they used to. And even food would be destroyed in the fire. So hopefully we won't see a repeat of that behavior, but if we do, at least you'll know why.

And when winter comes, the house itself has value.

The book leaves this kind of interpretation to us and so we either figure it out or we don’t. But even if you cannot interpret why they're doing it, you'll at least know that it's coming. Should you find yourself in this situation.

The German’s didn’t understand their currency was falling. They thought everyone else’s was going up. They weren’t the world’s reserve like the USA's is today. And they didn’t have the perspective from other nations who experienced such an event in their recent past that was as readily available through the sophisticated communication methods we have today, like the Internet. If it wasn’t in the library or the newspaper, or on the radio, they just did not know about it.

When it came to fiat currency, they were limited by printing presses. Which require paper and ink and manpower maintenance and machines in order to print the money. They couldn't use mouse clicks like we can today. So they started printing larger denominations and even just printing on one side of the paper in order to save money in order to get ahead of the downward spiral, but of course that only delayed the reconning that was inevitably coming.

I’ll give you some examples of reasons why you must get this book:

I’ve already described one, the book tells you what to expect in these types of conditions and I assure you, unless you were raised in the projects and you’re familiar with the behavior of thieves and a deceptive hostile government, the information is useful.

The job types that prosper most are the opposites of what you would expect.

Home values plummeted to unmanageable levels because you can’t eat or wear your home.

The government deceitfully extorted the wealth out of their citizenry to save itself.

Consider this scenario: today we hear things like, it’s unfair that wealthy people aren’t taxed more heavily. And so the citizenry grabs their pitchforks, raises a fist and says, “Yes, we must restore fairness and tax the rich!”

And so because of the uprising of American citizens we decide that anyone who makes over a million dollars per year must be taxed and turn over half their income to the American government to pay down our national debt for patriotism and to restore fairness.

And then after these laws are enacted, one or two years later, the school janitor is suddenly making a million dollars per year due to hyperinflation. The janitor received a forty-fold increase in pay, but eggs rose 180 times their original cost. And then he was taxed 50%. Ouch!
This is the sort of manipulation that occurred in Weimar Germany and it was done because the government was irresponsible and the politicians needed to save themselves. Meaning they saw this coming and so the angered poor people about rich people to get them voting for laws that would ultimately intensify their own suffering.

And so they manipulated their own citizens into demanding laws they would ultimately use to rob them.

I assure you, when you hold such positions of power, you know these things are coming. In fact, you might purposely engineer such things for nefarious reasons. These are my words not Adam’s. He was far too politically correct to be honest.

And eventually the government just got nasty. It seized foreign currencies and gold and silver in order to save itself. As if it wasn’t bad enough that their lowlife neighbors robbed them, soon the government was kicking down doors and burning down homes, too.

There was a glutton law for those who paraded their wealth: 100,000 fine for flaunting wealth on first offense, and 200,000 plus 5 years in prison for the second.

In Adam’s introduction he made some interesting comments, he said:
situations like hyperinflation are not always well documented because everyone wants to forget it.

He indicated that people become numb to the trauma they experience. Believing they hit rock bottom today, they would be shocked and horrified only to hit it again next week and the week after and so on.

In the early stages prices doubled each year, and in the latter stages price doubling occurred so fast money was like a hot potato. People stood at the ready to exchange it immeidately. 

The denominations of money became so outrageous they had trouble fitting all the zeros on the bills. At the climax of the collapse, the price for one egg would have bought 500 billion eggs ten years prior. Which was how long the hyperinflation lasted.

Adam’s book is full of revelations that are crucial to survival in a hyperinflationary environment. At a minimum you should buy it and put it on your bookshelf in case some day it suddenly it becomes  relevant and therefore valuable and survival becomes tricky.

I imagine you can understand now why I gave his book five stars even though it is a difficult read. 

And as always thank you for listening!

Have a brilliant week 

And y'all come back now, ya hear?

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