When the Nazis came to power the most pressing issue was an unemployment rate of close to 30%. The economic management of the state was first given to respected banker Hjalmar Schacht. Under his guidance, a new economic policy to elevate the nation was drafted. One of the first actions was to destroy the trade unions and impose strict wage controls. The government then expanded the money supply through massive deficit spending. However at the same time the government imposed a 4.5% interest rate ceiling, creating a massive shortage in borrowable funds. This was resolved by setting up a series of dummy companies that would pay for goods with bonds. The most famous of these was the MEFO company, and these bonds used as currency became known as mefo bills. While it was promised that these bonds could eventually be exchanged for real money, the repayment was put off until after the collapse of the Reich. These complicated maneuvers also helped conceal armament expenditures that violated the Treaty of Versailles. According to economic theory, price control combined with a large increase in the money supply should have produced a large black market, but harsh penalties that saw violators sent to concentration camps or even shot prevented this development. Repressive measures also kept volatility low, reducing inflationary pressures. New policies also limited imports of consumer goods and focused on producing exports. International trade was greatly reduced remaining at about a third of 1929 levels throughout the Nazi period. Currency controls were extended, leading to a considerable overvaluation of the Reichsmark. These policies were successful in cutting unemployment dramatically. Most industry was not nationalized, however industry was closely regulated with quotas and requirements to use domestic resources. These regulations were set by administrative committees composed of government and business officials. Competition was limited as major companies were organized into cartels through these administrative committees. Selective nationalization was used against businesses that failed to agree to these arrangements. The banks, which had been nationalized by Weimar, were returned to their owners and each administrative committee had a bank as member to finance the schemes. While the strict state intervention into the economy and the massive rearmament policy led to full employment during the 1930s, real wages in Germany dropped by roughly 25% between 1933 and 1938.[7] Trade unions were abolished, as well as collective bargaining and the right to strike.[8] The right to quit also disappeared: Labor books were introduced in 1935, and required the consent of the previous employer in order to be hired for another job.[9] The German economy was transferred to the leadership of Hermann G http://answers.yahoo.com/question/index?qid=20061024182500AAbTBrL
And? Or should I say "Was noch?" Obviously, I wasn't allowing nearly enough time for the Euro and Dollar to move closer to parity. Perhaps by the end of 2016, depending on the pace of tapering??? On the other hand.
Or is it no more complicated than the market's anticipation of a stronger dollar? (Markets can be wrong of course. There is no more bogus myth than "the markets are always right". They are only right relative to your being wrong when you've let yourself be caught on the wrong side of them.)
imagine if you went to the bank to pay a mortgage payment 5 yrs ago and they said we have no record, so for 5 yrs you didn't pay, you were waiting in the back of your mind knowing they would one day figure it out, waiting for the other shoe to drop,if it's not now. it;s still going to hapen
All our common experience leads us to believe it will happen. But when? Predictions, especially about the future!, are risky.
The Fed cannot continue to print money but they cannot seem to withdraw it either. The economy and markets have gotten so used to it that itâs going to cause problems whether or not QE continues.