How deep do the secrets lie?

. busy bee

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Keep your eyes peeled and watch why Wall St, the money markets, Northern Rock, Bear Stearns and the Government are laughing all the way to their banks.


Why doesn't your pay packet last until the end of the month? How about the Central Bank giving YOU a bailout loan? More jobs to be exported overseas - well, what will be left for you to do - how can you be a consumer without money?

zimbabwe_beer_50p_5million_dollarsWhilst the Zimbabwe Dollar has become worth less than a postage stamp, the beer has kept a reasonably constant value.

The technical term is 'Quantitive Easing' - just print more bank notes...

The most unfortunate thing about this is that Germany had a similar fate in 1923. Although the reasons may have appeared different, the ultimate conclusion was the currency was effective worthless. It became cheaper to burn bank notes than take time to go to the shop and buy firewood!

Chances are you were bored in history and didn't get much out of the lessons. How could you care if King So-and-so IV married Princess Whoever-she-was!? Put aside those school day nightmares and perk up - it could help you avoid a real life one on the horizon.

You only have to look back to the time at the end of the First World War to see how cyclical certain events can be. Without detailing the rise of the German state from the principalities into what became Prussian-style Germany leading a fledgling nation into war, we can use the information in modern times.

Wars cost money, but generate work. Businesses linked to the war effort, but not controlled by the state always make vast profits. The average citizen is usually opposed to war, because of the disruption and uncertainty it brings to life. If it turns up on your front door, you might change your opinion, or have it changed for you...

Back to Germany in 1922, this was a country who although it had fought a four year war and was defeated, it had actually managed to get itself back towards a stable situation where people were working together to 'make the country strong' again. By 1922, the German economy had begun to be profitable, not by much, but in profit none the less.

Now it was time for the people who loaned money at exorbitant rates to step in - the international bankers.

'As you are clearly showing a profit, you should be able to increase your payments to us now.'

In normal circumstances, you would probably turn the bankers away and tell them that this first profit would be going to the people who helped make it, and maybe replace worn out machine heads, tools... You might even call them 'loan sharks'.

Sadly this was not to be. Any profit, no matter how small 'entitled'' the bankers to extra payments - you did read the small print, didn't you?

With profits just above zero, this meant a massive hike in the amount to be paid out to the people who control the game - the lenders.

Germany owed money to:

Bearing in mind the massive scale of this conflict, it was only the superpowers of the day that could afford to win or lose at war. If they won, they could make the rules. If they lost, the victor would have to send resources - men and equipment around the world to occupy. This would leave a more vulnerable homeland which could risk a new war.

It doesn't mention the millions of lives that were lost on all sides. That's right - all the debt was to replace 'things' - the human cost of life was completely ignored.

I'm not getting into the war thing here - as the saying goes 'FOLLOW THE MONEY'.

Many tales are told about this money trail - but that takes us back before WWI (World War 1). Find out details inside the course.

Most people don't understand 'money'. After all, it's not a class at the schools I've seen. Take an economics class at College or University - they won't have a specific course on money. Maybe if you spend three years, you'll get a few hours on the subject of money...

You're smarter than that - if you've read this far, you know you want to avoid the feeling of having
too much MONTH left at the end of the MONEY!


Time to tell you about little 'Claudia' - she is looking forward to celebrating her 4th birthday. It's the first she can remember. Her daddy and mummy celebrated the end of the war, and his safe return from fighting in the front line. She is with her friends in Germany, back in 1923, and her papa has just come home from work and he has a large sack on his back. 'Claudia's' eyes become as wide as saucers - she thinks her papa looks like a friend of Saint Nicholas ('Santa Claus') with lots of gifts for her birthday!

The morning comes and all little 'Claudia'' wants is a doll of her very own, so she can show her friends how pretty she can make her.

She can here her parents have loud voices inside the house - she doesn't understand. Her mother yells out

'I told you to get the doll BEFORE coming home - we can't afford it with the money we have now!'

A door slams inside the house some loud footsteps and her papa appears. Claudia runs to give him a hug, but he just brushes her off and puts on his work clothes. He says to her 'Now you are four, perhaps you can help around the house, we're not your servants...' his voice trails off as he sees the bright hope in his daughters eyes turn gently to little tears.

Claudia gives him a big hug and says to him 'Don't worry Papa, I'll help you and Mama. I can make my own games with my friends, I'll have another birthday next year. I Love You Papa. Here's a birthday kiss for you!'

Never before had this ex-soldier been so wounded. He wasn't sure if his daughters words of love or his own misjudgement in not buying a doll after work were eating at him. He knew this couldn't go on, how could anyone deprive their child of a simple birthday present. His eyes were holding back tears, when he told his daughter 'I Love You' and he held her tightly in his arms before giving her a birthday kiss. 'Go and find your Mama, she has something for you to play with'.

With her father back to work a new 60-hour week in the factory, her mother was in the kitchen sorting through the 'best of the bad vegetables' trying to find something nice enough for a birthday meal. She stopped when she saw her daughters bright eyes and wide, if mischievous, smile. 'Mama' said the little voice as she twisted her foot on the floor in perfect time with her thumb balanced on her teeth, 'Papa said you have something for me to play with'.

The expectation was heartbreaking, her mother knew they had been putting off buying her doll because the inflation rate was 'only a blip'. When it hit double figure the first time, the doll was 5 Marks then, it would have been a stretch, but her husband 'Hans' was earning reasonable money - almost 120 Marks a month. Since the German Central Bank had been so good before, there was no reason to think anything might not be as safe as it appeared. They spotted that doll about nine months ago. Since then she and 'Hans' watched the price increase, with no increase in salary. More of his money was going on food, but it just seemed a little at first, just a few pennies...

In the first month, 'Claduia's mother walked past the toy shop each day watching the doll become 7 Marks, then 10, 14, 19, 27, 38, she couldn't believe her eyes after the first week, the doll would cost around half her husband's salary - and they still had all the regular bills mounting up. The second week seemed worse: Monday 53, Tuesday 74, Wednesday 103, and on Thursday the doll was priced at 145 Marks - making the doll more valuable than a man working for 60 hours a day, six days a week.

By this stage people were protesting at the raw deal the were having and demanded enough money to keep their standard of living. The Central Reserve Bank chose to implement two strategies - raise interst rates and print more money. This led to the numbers in Hans' pay packet increasing, but each note was become worth less and less...

The 160 Marks he now received was only worth about 72 from the previous week!

No ordinary person can sustain this. Basic food started attracting 'luxury' price tags. The government was expected to 'do something' - so they issued more money and told shops to freeze prices.

By the end of the second week - just fourteen short days the doll was now expecting 400 Marks to find a new owner, compared to the 5 Marks it had been. Eighty times the price, but no different in value.

From this point on the German economy of 1923 became much, much worse with inflation so high, by the time you were paid you could not afford the sandwich for lunch in the time it took you to queue in line!

But what of little 'Claudia'? Here is a picture which shows just how much paper money was worth to the Germans in 1923:children play with money 1923 germany

There must be thousands upon thousands of real notes in this picture, with a face value of trillions - that is to say a '1 with 18 zero's behind it (just 12 in the USA!).

If each banknote has 'One Hundred Thousand' printed on it, is it worth that much? If each stack contains 500 notes, that makes them 5 Million per stack.

Fuel and food have always been excellent indicators of how the economy is doing...

Do you find your weekly shopping bill coming to more than you expected? Maybe you've had to cut down on a few things, replace 'branded' items with 'own label'.

How about the price of oil? It's what makes most household electricity...

Still, at least you could have heat and light without the 'luxury' of an open fire. Spare a thought for the young families in Germany, back in 1923 where it became cheaper to burn the money you would use to buy firewood.

Cheaper to burn banknotes than to buy firewood, Germany 1923. Young woman uses bank notes in the cooker.

Cheaper to burn banknotes than to buy firewood, Germany 1923. Young woman uses bank notes in the cooker.