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| Good morning | |
| 2008-11-24 | |
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| Posted by:Fred |
| #12 I gotta use a word processor to write long comments. PIMF. |
| Posted by: ed 2008-11-24 13:10 |
| #11 Anyway, before getting off a tangent on whether Weimar Germany paid reparations, the point was American loans were fueling the European economy which were then back to the US as manufactured goods orders and loan repayment. When the stock market crashed and banks went under, the loans to Europe dried up and loan repayment repudiated. In addition stock market losses, this had the effect of removing the equivalent of $2 trillion (today's value) from the US economy ($10B war loans + $8B postwar loans converted to gold value and sized for 3X the population today). By coincidence the US government has pledged to add up to $2 trillion in liquidity/bailouts to keep the financial system and commerce from grinding to a halt. Scary. |
| Posted by: ed 2008-11-24 13:08 |
| #10 Sort of like Pakistan buying more jets from China while getting IMF aid. |
| Posted by: 3dc 2008-11-24 12:56 |
| #9 Google books: The Library of Congress World War II Companion Claims: German war reparations: 132 gold marks, later reduced to 50 billion "The French linked debt repayment to reparations: the reparations payed by Germany would be used to pay the American debt. The British suggested that both reparations and debt be canceled." By 1932, 3 billion payed in reparations. Germany stopped reparation payments in 1932. France and England then immediately stopped repaying loans from the US. 3 billion gold Marks (6% of total reparations) would have been about $800 million back then. Another source, though not as academic: Weimar Germany Finally, in 1924 German inflation was brought to a sudden end with the help of a Chicago banker, Charles Dawes. Dawes was the chief architect behind what came to be known as the Dawes Plan, one that left the Reichsbank partially under the direction of an American commissioner who was to oversee German reparation payments. It did not lower the amount Germany was expected to pay, but the U.S. reduced the debt obligations of its Allies by 30-80%. The plan helped improve relations between the Allies and Germany and, for this, Dawes earned a share of the 1925 Nobel Peace Prize (the other recipient being Sir Austen Chamberlain of Britain). But the Dawes Plan wasn't without cost. The banking consortium he put together reaped 10% of the face value for underwriting costs, the motto being, "business, not politics." Over the next 5 years, Germany paid out about $1 billion in reparations and received loans of $2 billion, a sizable portion from the U.S. In effect, America was paying Germany's reparations, while Germany used the surplus from American loans to modernize its industry. |
| Posted by: ed 2008-11-24 12:47 |
| #8 Edj if you still believe in Wikipedia (and in CNN or in the New York Times) then I have a reveletion to you: it is the parents not Santa Claus who brings toys at Christmas. The very formula of the Wikipedia ensures it obly will bring "common knowledge" who in everything but hrd scaience can be far away from truth. In this particular theme it was polluted by Keynes nefarious book "The economic consequences of peace" BTW did you notice that Germany only ever pais a filthy 12,5% of what it owed (who had been already waaaaaay watered down respective to what it should have paid) while France and Belgium paid not only what they owed to the USA but also those 87.5% Germany never paid despite havong smaller economies? |
| Posted by: JFM 2008-11-24 12:03 |
| #7 The guy probably wasn't even acting at that point...just hoping he didn't have to stand up any time soon. BTW, Mrs. Uluque6305 has laid down the law: There will be NO discussion of politics at the Thanksgiving Dinner table. |
| Posted by: Ebbang Uluque6305 2008-11-24 11:43 |
| #6 Oh, please, you guys. Can't you just stop for a moment to appreciate the look on Buster Keaton's face? |
| Posted by: Ebbang Uluque6305 2008-11-24 11:39 |
| #5 BTW, $8 billion back then was worth 400 million ounces of gold or $332 billion today loaned by a population of just over 100 million people. |
| Posted by: ed 2008-11-24 11:34 |
| #4 Wilkipedia: Great Depression in Central Europe The sources of the problem can be traced back to World War I and the rise of international indebtedness. At the conclusion of the war the United States had become the world's banker. Under the Dawes Plan the German economy had boomed in the mid-1920s, paying reparations and increasing domestic production. But the whole thing came to a sudden halt in 1929-30, when Dawes Plan loans dried up. This was not just a problem for Germany; for Europe at large had received almost 8 billion dollars in American credit between 1924 and 1930, on top of pre-existing war time loans. The problem of credit financing was compounded by slavish adherence by governments to the gold standard, the great economic shibboleth of the day.[citation needed] Falling prices and demand induced by the crisis created an additional problem in the central European banking system, where the financial system had a particularly close relationships with business. In 1931 the important Creditanstalt bank in Vienna collapsed, causing a financial panic across Europe and the rest of the world. Germany's Weimar Republic was hit hard by the depression, as American loans to help rebuild the German economy now stopped. Unemployment soared, especially in larger cities, and the political system veered toward extremism. Hitler's Nazi Party came to power in January 1933. In 1934 the economy was still not balanced enough for Germany to work on its own. Repayment of the war reparations due by Germany were suspended in 1932 following the Lausanne Conference of 1932. By that time Germany had repaid 1/8th of the reparations. |
| Posted by: ed 2008-11-24 11:30 |
| #3 After WW1, US dollars were lent to Weimar Germany who then paid reparations to the Euro Allied nations Nope. Actually Germans never paid for what they destroyed in France and Belgium. The only ones who paid anything wer precisely Allid countrioes. Their debt to America who at the same time was suporting Germany on the matter of reparations. That is why with its competitors burdened by heavy financial charges and with key fabrics out of business after being destroyed by the Geramn Army that Germany had its sper-economic boom in the second half of the twenties. |
| Posted by: JFM 2008-11-24 11:08 |
| #2 Looks like she might be sitting on more than his lap. Looks so good to us watching them, but you don't know the pressure he's under. |
| Posted by: Richard of Oregon 2008-11-24 10:26 |
| #1 Mike N, missed the midnight comment cutoff to the UBS Stockholders thread. So here it is the next day. Actually, ed, I am happy with the economy. Have you gone into the repo business? And how are Americans going to earn the money to buy Mexican drugs and Chinese steel? Have you noticed the US is already in hoc for $13 trillion? What industry and jobs do you propose to leave to your kids? I take it you are a sales guy. What sales are you going to make to a tapped out citizenry? Are you going to sell them Hope, made in China? Can they pay you in Change? Ever notice we haven't had one since we began embracing free trade? The 1929 stock market collapse triggered the Great Depression. But the mechanism was a collapse of world currency circulation, not trade barriers. US trade tariffs were very high all through the Roaring Twenties and worked to increase industrial capacity. After WW1, US dollars were lent to Weimar Germany who then paid reparations to the Euro Allied nations who then used them to buy American manufactured goods, who then lent dollars to Germany. All good as long as American dollars flowed to fund this pyramid scheme. When the stock market, build on 10X leverage, collapsed, all those dollars got wiped out, banks got wiped out. No more dollars to lend to Germany to send to France to buy US manufactured goods. Factories close, massive unemployment, depression. Break one link and the whole money circulation chain collapsed. Post WW2, the US had more than one half of the world's remaining industrial capability. For 20 years the US had a trade surplus as it was the only real source of manufactures. That was the golden age. In addition, our major trading partners were limited to Canada, Europe, Latin America and Japan. Quite a small group compared to the 7 billion today clamoring to sell their wares in the US. Only when Europe and Japan's industrial infrastructure was built up did the US, now with a wide open market, feel pressure from other producers. More recently, the US Market has been laid open to 3 billion more people and the deterioration of the US industrial base as sped up exponentially. But there was no event to stop the flow of money, though the 1973 oil crisis was a good try. That is until now. The common thread of all the depressions was over speculation and leveraging of financial markets that wiped out money circulating in the real economy. Today, the government enforced Ponzi pyramid housing scheme is threatening to cause the collapse of the money supply. No one wants to lend dollars, imports in free fall, factories closing worldwide, supporting industry and financial layoffs worldwide, feeding back on itself. That is why world governments are pouring trillions of dollars into financial markets. But it's not US industry, since little remains, that will bear the brunt of the fallout this time. Good night. |
| Posted by: ed 2008-11-24 00:27 |