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
Listen to "When Money Dies by Adam Fergusson [15 Mins] on Finance" on Spreaker.
Hey, welcome back!
Today I will be reviewing When Money Dies by Adam Fergusson.
During the credit crises in the United States, there was a shortage on copies of his book and so they sold on eBay for $1,000 each. Hence I recommend purchasing several hardcopies just to keep on hand.
I had the audio book version and his long winded intro caused my eyes to glaze over at key points leaving me dazed and confused later due to its composition. So while he did explain the composition and perhaps I was simply distracted, I nearly trashed the book.
I’ll come back to this.
The audience for the book is preppers, economists, anyone interested in finance or history…
For example if you’d like to know how to prosper during difficult economic times, this book is for you! It’s a real eye opener! I think everyone should read it as a form of financial self defense.
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 re-released in 2010 due to the 2008 financial crisis. Also known as the credit crisis and the collapse of Lehman Brothers.
Fergusson left the Herald to work for as the foreign editor of the Statist in 1964, which was a journal for economists and businessmen. Therefore, this was only 30 years after Germany’s hyper-inflationary period ended.
I would re-do his introduction. If I were him, this is what I would say:
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 to 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. But I did this to supply detail that you can use to draw your own conclusions. However, because the citizens did not understand what was going on, and I also 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 started with a high-level description and by jumping into that (in the intro) and then going back to these journal entries. I became immediately confused. Initially we were off to a great start and then it seemed like we jumped into the weeds for some reason, for no apparent reason. I didn't understand what was happening.
I almost trashed the book because his introduction made my eyes glaze over at times. It confused me at other times. It did include crucial details helpful in understanding the text. And so because of the head-fakes in just the introduction alone, I struggled with the rating for this book. But again it is filled with absolutely golden treasures. So he gets five stars because he did absolutely say everything he needed to say and more. And really the issue was that I wasn't paying enoug attention. However, I do fault him a little a bit for that. Therefore, I view this book as a big collection, a repository of raw data that needs to be mined, and even interpreted. I'll give you an example:
As you can imagine during financial crises, 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 such lowlives that they were bitter and angry toward anyone 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 your purchasing power. And imagine thieves were stealing from citizens as a normal course of life. How would you instinctively respond to that? You’d start hiding things. And being the resourceful reader genius that you are, you would do things like rip down your walls and seal your treasures up inside the drywall making it look like you had nothing at all. The thieves would come and go and you’d be able to keep your stuff.
But the thieves observing you have an empty house and yet somehow remain well fed, would become suspicious. How are you doing this? Why aren’t you suffering as much as the rest of us?
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 start burning down homes to search through the rubble for gold and silver, precious stones and the like.
But imagine the journal entries of home owners who didn’t stockpile goods, who didn’t bury treasures in their walls, what would they say?
They’d write about the trauma of on Monday being robbed by thieves who maliciously destroyed their couches and took a sledgehammer to their walls for no apparent reason, only to return and burn their house down on Friday.
The citizens got smarter and so the thieves got smarter.
For the record, burning down houses is stupid, lazy and malicious because it would destroy priceless books, artwork, money, foreign currencies and the like. Burning down American homes would be especially foolish because Americans don’t value gold and silver the way other countries do. American’s are fans of stocks, bonds, foreign currencies, artwork and so that value along with food would be destroyed in the fire.
And worst of all is the fact that 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. As GI Joe says, Knowing is half the battle. So even if you can't interpret why they're doing it, you'll at least know that it's coming.
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 currency like we are today. And they didn’t have perspective from other nations who experienced such an event in the recent past that was as readily available through the sophisticated communication methods we have today. If it wasn’t in the library or the newspaper, or on the radio, they just didn’t know about it.
And when it came to fiat currency, they were limited by printing presses. They require paper and ink and manpower maintenance and machines in order to print the money. They can’t use mouse clicks like we can today. So they started printing larger denominations and even printing on one side of the paper to save money in order to get ahead of the downward spiral, but of course that only delayed the reconning that was inevitably coming.
When you party like a rockstar you don’t get to skip the hangover.
I’ll give you some examples of reasons why you must get this book:
I’ve already described one reason, 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 America’s 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.
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.
And so they manipulated their own citizens into demanding laws they could ultimately use to rob them.
I assure you, when you hold such positions of power, you can see things like this 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 the horror.
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.
In the early stages prices doubled each year, and in the latter stages price doubling occurred so fast money money like a hot potato. People wanted to exchange it as fast as possible.
The denominations of money became so outrageous they had trouble fitting all the zeros on the bills. At the climax, the price for one egg would have bought you 500 billion eggs ten years ago. 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 becomes relevant and survival becomes tricky.
I imagine you can understand now why I gave his book five stars.
And as always thank you for listening!
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