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| Mr. Stetts,
Points well taken, I agree on much of it & also am a closet fan of Mr. Williams although I don't agree with everything he spouts.
Zimbabwe has probably been a skrewed up place since before Cecil Rhodes went up there, even worse after the UK quit running it, so I'll leave those comments for someone else.
Weimar Germany was punitively punished for its role of starting WWI. The Treaty of Versailles put the screws to them: "Of the many provisions in the treaty, one of the most important and controversial required Germany to accept sole responsibility for causing the war and, under the terms of articles 231–248 (later known as the War Guilt clauses), to disarm, make substantial territorial concessions and pay reparations to certain countries that had formed the Entente powers. The total cost of these reparations was assessed at 132 billion Marks (then $31.4 billion, £6.6 billion) in 1921.[1] This was a sum that many economists deemed to be excessive because it would have taken Germany until 1988 to pay.[2] The Treaty was undermined by subsequent events starting as early as 1932 and was widely flouted by the mid-1930s" from Wikipedia, fwtw? But you get the jist.
They were paying something like 25% of gdp in reparations, in foreign sovereign currency, so had to convert Marks before making payments. Well it would seem tricky to tax 25% then tax more to run a gov't, all the while trying to rebuild from the war. Drain most of the gdp out of the system and the only way out was printing money, which made it worth less to foreigners. They were still on the hook for reparations and printed more, until it was worthless to anyone.
A sovereign who prints money may devalue it's currency and even get to the point foreigners won't buy debt; but, at that point who cares if they buy, we'll make more. Lead to inflation? Certainly of imported goods & services, probably domestically too. Hyper? Have to print a lot & probably have no taxes.
The UMKC school, the modern monetary theorists (MMT), say that taxes drive money. As long as the sovereign taxes in it's currency, there's always a demand for it's money. Simple as that. It's how fiat currency has always worked, even before anyone had figured it out. A gov't can always afford anything for sale priced in it's currency. Sounds like having your cake & eating it too, but it's a bit more complicated than that.
Later. Mark
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Interview with John Williams on the Coming Economic Collaspe
