Michael Burry Warns Weimar Hyperinflation Is Coming

Via ZeroHedge

Update (1815 ET): one day after the Weimar tweetstorm below, and shortly after our article came out, Burry tweeted the following:

People say I didn’t warn last time. I did, but no one listened. So I warn this time. And still, no one listens. But I will have proof I warned.

Indeed he will.

* * *

One week ago, Bank of America hinted at the unthinkable: the tsunami of monetary and fiscal stimulus, coupled with the upcoming surge in monetary velocity as the world’s economy emerges from lockdowns, would lead to unprecedented economic overheating… or rather precedented as BofA’s CIO Michael Hartnett reflected back on the post-WW1 Germany which he said was the “most epic, extreme analog of surging velocity and inflation following end of war psychology, pent-up savings, lost confidence in currency & authorities” and specifically the Reichsbank’s monetization of debt, and extrapolated that this is similar to what is going on now.

There is, of course, another name for that period: Weimar Germany, and because we all know what happened then, it is understandable why BofA does not want to mention that particular name.

Of course, others have been less shy – in 1974, Jens Parsson wrote a fascinating, in-depth historical analysis of the hyperinflationary collapse of Weimar Germany under the original money printer, Rudy von Havenstein, “Dying of Money: Lessons of the Great German and American Inflations” one which we periodically remind readers is absolutely critical reading in preparation for what comes next.

Then overnight none other than the Big Short, Michael Burry, who has been rather busy making waves within the financial community with his hot takes (most recently, his slam of Robinhood and his bullish view on Uranium), picked up on the theme of Weimar Germany and specifically its hyperinflation, as the blueprint for what comes next in a lengthy tweetstorm cribbing generously from Parsson’s seminal work. And while the details are familiar to most monetary historians, the fact is that now none other than the man who was made famous in the Big Short is calling for Weimar-style hyperinflation in the US. Below is an easily digestible repost of Burry’s lengthy Saturday tweetstorm, which shows just how similar our world is to that prevalent in the years just before Weimar Germany saw the most explosive hyperinflation in history.

The US government is inviting inflation with its MMT-tinged policies. Brisk Debt/GDP, M2 increases while retail sales, PMI stage V recovery. Trillions more stimulus & re-opening to boost demand as employee and supply chain costs skyrocket. #ParadigmShift

“The life of the inflation in its ripening stage was a paradox which had its own unmistakable characteristics. One was the great wealth, at least of those favored by the boom..Many great fortunes sprang up overnight…The cities, had an aimless and wanton youth”

“Prices in Germany were steady, and both business and the stock market were booming. The exchange rate of the mark against the dollar and other currencies actually rose for a time, and the mark was momentarily the strongest currency in the world” on inflation’s eve.

“Side by side with the wealth were the pockets of poverty. Greater numbers of people remained on the outside of the easy money, looking in but not able to enter. The crime rate soared.”

“Accounts of the time tell of a progressive demoralization which crept over the common people, compounded of their weariness with the breakneck pace, to no visible purpose, and their fears from watching their own precarious positions slip while others grew so conspicuously rich.”

“Almost any kind of business could make money. Business failures and bankruptcies became few. The boom suspended the normal processes of natural selection by which the nonessential and ineffective otherwise would have been culled out.”

“Speculation alone, while adding nothing to Germany’s wealth, became one of its largest activities. The fever to join in turning a quick mark infected nearly all classes..Everyone from the elevator operator up was playing the market.”

“The volumes of turnover in securities on the Berlin Bourse became so high that the financial industry could not keep up with the paperwork…and the Bourse was obliged to close several days a week to work off the backlog” #robinhooddown

“all the marks that existed in the world in the summer of 1922 were not worth enough, by November of 1923, to buy a single  newspaper or a tram ticket. That was the spectacular part of the collapse, but most of the real loss in money wealth had been suffered much earlier.”

“Throughout these years the structure was quietly building itself up for the blow. Germany’s #inflationcycle ran not for a year but for nine years, representing eight years of gestation and only one year of #collapse.”

His punchline: the above was “written in 1974 re: 1914-1923” and then makes the ominous extrapolation that “2010-2021: Gestation” adding that “when dollars might as well be falling from the sky…management teams get creative and ultimately take more risk.. paying out debt-financed dividends to investors or investing in risky growth opportunities has beaten a frugal mentality hands down.”

We are there now. The only question is when do we enter the exponential currency collapse phase.

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Iska Waran
Iska Waran

An expectation of inflation makes a good explanation of Bill Gates buying farmland. More so than his belief in farming as a good business or some nefarious plan to suppress reproduction by feeding people frankenfood. His land holdings – despite being among the biggest in the country – still only amount to a tiny fraction of total farmland.

Dirtperson Steve
Dirtperson Steve

Bill Gates and others own farmland for the government subsidies. They get paid by the government not to farm. Think of it as owning a bond except at the end of the term the bond isn’t just a piece of paper already paid out. It is an asset that holds or goes up in value.

Bill Gates and others never intend to grow anything except government dollars on their land.

Weedhopper
Weedhopper

Bill Gates is heavily invested in Beyond Meat…a vegetable-based meat substitute. Additionally, he sees crop export potential to China now that President* Biden is in office. Just my observations.

Stephanie Shepard

Hyperinflation is one of those economic events I don’t understand. I guess it’s something you have to personally live through to fully understand how it happens.

StackingStock
StackingStock

Here’s a free book to better understand.

http://thirdparadigm.org/doc/45060880-When-Money-Dies.pdf

TN Patriot
TN Patriot

In the late 70’s, Peanut Carter gave us a very small taste of it with his lame-brained policies.

Lebowski
Lebowski

I blame Nixon for taking the dollar off the gold standard in 71 actually

MrLiberty
MrLiberty

Indeed. Carter simply suffered from what he inherited from those two clowns (Nixon/Ford). Once decoupled, the spending spree went out of control. Carter was no prize, but Volker did good things by raising interest rates, allowing them to get to where they needed, and driving people into savings for a change. Without that “cooling” of the economy by Volker’s move, Reagan would have been dealing with far worse than Carter, and likely would have fared even worse, as his spending spree was to the moon. And please do NOT take that as any sort of endorsement of the Fed, monetary policies, monetary manipulation, etc. A truly free market in honest money, would always see interest rates rise as savings decreased (to motivate more savings, etc. so money was available for lending, etc.) and balance (though never perfect) would be present.

gilberts
gilberts

What’s not to understand?
Your govt floods the economy with shit money and people try to dump it as fast as possible. The price of everything goes up, the value of cash goes down, and chaos reigns.

In post-WWI Germany, the inflation was so bad, you had to haggle for and pay for your dinner before you ate it, because the price would rise while you ate it. Folks used Marks as wallpaper.

You are seeing it start now. It’s actually been growing for some time. Did you note the way food manufacturers started cheating after 2008 with packaging? They scooped out the bottoms of jars, shrank the size of the bags of cereal in their giant cardboard boxes, and started selling smaller versions of normal products. Prices on food have been going up. One thing I’ve noticed in recent years- ubiquitous items with low prices that don’t fluctuate much, like sewing kits, have been going up. What would have been $1-2 a few years ago goes for $7-8 now. Imagine seeing last year’s shortages becoming more common and more persistent as the cash drives products out of the market as fast as they can stock them. Look at the ammo shortage now and imagine that in all areas soon.

I have a framed piece of art I made years ago. I got Weimar marks, Yugoslav bills, 100 Trillion Zimbabwe dollar notes, Ukrainian bills, Turkish notes, Soviet bills, etc. It’s flanked with a silver and gold liberty dollar coin. It’s titled “In God We Trust, The Rest Pay Cash.”

Stephanie Shepard

There’s a difference between understanding it intellectually and comprehending how it could happen to your country.

olde reb

Here you go Stephanie, step by step.

Every dollar of deficit spending is a dollar of profit on the ledgers of a Wall Street bank. The money embezzled by the Fed goes to benefit Wall Street’s drive for the NWO.

  http://stateofthenation.co/?p=20475     Federal Reserve for Dummies.      
https://www.spartareport.com/2019/11/the-federal-reserve-a-different-view/;
https://ppjg.me/2019/11/18/the-federal-reserve-a-different-view/ .

NONE DARE CALL IT SEDITION

MrLiberty
MrLiberty

2008? You think this started in 2008? Try 1913. Just look at what you used to buy as a kid and what it costs now, how big it is now versus then, etc. You may be noticing it more, but it has always been there, but is never consistent throughout the economy as some sectors, products, etc. are always more impacted at any given moment than others. And then lets talk the massive reduction in quality of manufactured goods…..

gilberts
gilberts

Sorry, I wasn’t here in 1913.
I have seen things get worse since the 90s, but it was pronounced after 2008.

olde reb

It is a process by which the international bankers/Rothschild cabal confiscate the wealth of the nations by inflation and embezzlement.

Robert
Robert

Hyperinflation is the moment that everybody realizes the king has no clothes!

Glock-N-Load

What’s the play…precious metals?

Two if by sea. Three if from within thee.
Two if by sea. Three if from within thee.

Your head, heart and hands are the gold.

mark
mark

Donkey,

Of course Two is right Big Picture. Some broad next steps.

SELF SUFFICIENCY: Get you own water source, and have means to pump it and treat it. Grow your own food. Become as self-sufficient as possible…it’s a process not an event. (The book Five Acres and Independence got me started in the 80’s).

DEBT: Get out of debt, become your own central bank, and get out of their slave system as much as possible.

PREP & STOCKPILE: It’s also a process not an event. Stockpile everything necessary is a broad subject…and not hard to do incrementally.

SELF-DEFENSE: own serious weapons. No matter your background train to fire and maneuver with the right gear.

COMMUNITY: Find a group of likeminded friends and or neighbors to support one another. (I have a third meeting coming up at my place with four neighbors/buddies on supporting one another).

HARD ASSETS: I like both Gold & Silver. There are many others.

Two if by sea. Three if from within thee.
Two if by sea. Three if from within thee.

KATY, BAR THE DOOR!

Ghost

Who remembers Enron, by the way?

gilberts
gilberts

I’ve been saying the same thing here for a little while. The velocity of money is speeding up as people get it from the govt and promptly get rid of it as fast as possible for physical items.
Here, the local antique shop is seeing a booming business as old tools, art, lamps, furniture, and other things fly out the door. The coin dealer has seen his generic silver rounds dry up. Since the run two weeks ago, he raised his prices to $38/ounce for generic rounds. It’s remarkable, because this is supposed to be the dead time of year for antiques, just like commercial sellers, such as Home Depot, who have seen a run on all household appliances.

Hans Fotzenlecker
Hans Fotzenlecker

But if you look at the Velocity of Money chart from the Fed, you’ll see that the VoM has actually fallen off a cliff since 2000. Perhaps the yearly charts don’t show the actual effect as it’s taking place or certain things are inflating at a much higher rate than others. I’m not sure of the answer but we have a long way to go for VoM to get back to historical averages.

https://fred.stlouisfed.org/series/M2V

gilberts
gilberts

I don’t know if I’m seeing things they don’t, or if they’re just full of crap, but my eyes have been fairly reliable, while they’ve been re-jiggering their measurements and charts for years.

Steve
Steve

Is the hyperinflation another intentional Covid type connivance? So, the Banksters can legitimately say they paid off the $trillions in debt, all for the actual value found in a pack of gum?

card802
card802

So we have a fourth turning, which typically leads to a major war of some sort, a scamdemic with a vaccine that is worthless and possibly dangerous, politicians and media that must somehow keep the unraveling pandemic narrative moving forward, more lockdowns, more debt, looming food shortages, fucktard maskhole neighbors and relatives turning in critical thinking neighbors and relatives, more man caused climate change bullshit, and what the fuck, throw in some hyperinflation to make our lives just a bit more interesting………

Why not?

I miss the Orange Bad Man.

Stucky

Was the currency of the Weimar Republic the world’s reserve currency?

No? Then STOP comparing the two nations, currencies, and eras!!! It’s pure bullshit to do so.

StackingStock
StackingStock

You should read the free book I posted above, I’m reading it now. The first sixteen pages will blow you away of how similar the events unfolding before your very eye’s right now.

Stucky

I just might. But, first let me ask you a question.

The book was written in 1975.

Is a 45 year old book about finances/economics still applicable in today’s world? Hasn’t a LOT changed over the decades?

MrLiberty
MrLiberty

The puppetmasters simply want you to believe that things have changed. What has NEVER changed is people, and their desire to do whatever it takes to survive. What also has NEVER changed are the LAWS of economics. Neither can be dispensed with through trickery, government legislation, wishful thinking, or new, more creative, shell games of finance.

StackingStock
StackingStock

Yes I believe the 45 year old version is perfectly fine, I don’t want to read a watered down version of history.

Stucky remember they’re bankers and they have used this play book for centuries and judging from the people then and here now, nothing has changed except the dates.

Stucky

Ok, I’ll read at least the first 16 pages late tonight …. when Momma Stucky is asleep. Right now I have to check on her every 15 minutes … not good for concentrating.

Thx.

TN Patriot
TN Patriot

I expect the USD to lose its reserve status in a few years. Piling Trillion$ in debt onto a mountain of debt will eventually undermine the USD.

gilberts
gilberts

Hey, Stucky, they tell you before you invest money to remember past performance is no indicator of future results. The US is wandering off the page and there aren’t many examples of previous world reserve currencies to compare us to. There are a lot of examples of hyperinflation and economic collapses, though.

What do you say when the US has printed 35+% of the current supply of dollars in the last year? https://fred.stlouisfed.org/series/M1 We were worried about fiscal responsibility when Bush had us at 7 Trillion fighting the Global War on Noun. We were outraged when Barry grew that to 14 Trillion. How do you feel now, with us at 27 Trillion? Do you believe we’ll ever pay that down?

https://usdebtclock.org/index.html How does that 159 Trillion in unfunded liabilities make you feel?

If you don’t think Wiemar Germany is a good model to work with, what do you prefer? Post-Soviet Ukraine? Post-Tito Yugoslavia? 2001-era Argentina? Modern Zimbabwe? 90s-era Turkey? There are lots of examples of nations whose money cratered. I used to see Ukrainian bills with 3 zeros lined out. In Turkey in 1997, you could be a millionaire for $5. In Argentina in 2001, they went from 1st world to 3rd world in about 1 month. In Zimbabwe, within the last few years, there are people who panned for gold all day in the hopes of earning enough money (cigarettes) to afford a day’s food.

I am not certain how it will happen here, but I feel like we’re seeing it now as it develops. To quote Hemingway,
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”

Mary Christine

Has anyone priced 2×4’s lately? We built our house in 2017/18. 2×4’s were around 1.50 each. I haven’t priced them lately but others have been seeing prices anywhere between $4-6 each for an 8 ft long board. And the quality is crap. I don’t see how anyone can afford to build a house but I see homes going up all over the place.

Country Boy
Country Boy

Like the WEF touts, “You won’t anything and you will be happy.” Riiiiiiight.

Ghost

I asked Nick how much he pays (he’s the construction guy around here, as well as the tractor guy, and the snow shovel guy, and so on) and he said around $2 if untreated, double that or more if pressure treated.

We priced an oak plank we have left over from the building of the home (as well as every other usable piece of lumber and construction materials not used by the Yoders.) Well, that’s a stretch because you really can’t price it… it doesn’t exist at the lumber yard. It was a custom plank the company “accidently” delivered twice, so we have this 14 foot long plank of oak, which is 12 inches wide and two inches thick worth several hundred dollars perhaps, or it might actually be priceless since we probably aren’t selling it.

We purchased the entire log home package in 2009 (3 year layaway same as cash I kid you not!) and when our builder was able to start October 2012, we requested early delivery and some of the larger pieces were not yet finished curing in the solar kiln. So, there were some oopses with delivery, but Gastineau Oak Log Homes made good on every single piece of wood or material we reported as missing and even, on at least three occasions, send more than requested and let us keep the material rather than sending a truck for pickup.

I bet they are not quite as careless about the lumber they deliver now.

Hardscrabble Farmer
Hardscrabble Farmer

It’s running at $1 a foot right now. When we last bought them they were available at .99 each for studs.

800% increase is getting close to hyperinflation territory, right?

Mary Christine

A buck a foot? Holy cow! Who could afford to build anything at those prices?

Hardscrabble Farmer
Hardscrabble Farmer

That’s at the big box stores, higher than that at the local places. We cut our trees in the winter, haul them down the street to the local mill and then use rough sawn.

gilberts
gilberts

Wood has been expensive all year. There were rumors a lot of wood was held up at the border. All the folks stuck home doing quarantine stuff started doing home improvement projects. 2x4s were hard to get last fall when I was working on my own project.

olde reb

Every dollar of deficit spending is a dollar of profit on the ledgers of a Wall Street bank.
The money embezzled by the Fed goes to benefit Wall Street’s drive for the NWO, perpetual warfare, inflation of stock prices, and worldwide oppression as witnessed by John Perkins.

  http://stateofthenation.co/?p=20475     Federal Reserve for Dummies.      
https://www.spartareport.com/2019/11/the-federal-reserve-a-different-view/;
https://ppjg.me/2019/11/18/the-federal-reserve-a-different-view/ . https://thedailycoin.org/2020/09/17/none-dare-call-it-sedition/

Hardscrabble Farmer
Hardscrabble Farmer

It’s showing up in virtually everything I stockpile and order annually- chicks, spices, seed, hardware. Lots and lots of holes in inventory as well, especially mechanical parts, fittings, plastics and paper products. We got out of the livestock game after last year, much higher return for meat than living animals but the price on piglets in the last couple of years has risen from $40 each to $150. Now they are simply not available. Not sure what you’d call that, but looks like hyper-inflation to me.

MrLiberty
MrLiberty

I’d call that a serious, developing crisis.

Ghost

Believe it or not, I am seeing it here in my fledgling rabbit industry I hilariously and precariously called “Say Yer Prayers, Rabbit!” as a joke for more than several reasons. Not only did I have to end the meat-rabbit part of it after being so successful I couldn’t bring myself to thump another bunny for nothing and so my first large order became my last large order. And, since my partner Larry don’t talk so good and basically lives on what he can sell in addition to some sort of small disability pension which qualifies him for health care and government food assistance. Larry is quite hard-working and while he is slow in speech, his mind is quick and he has a generous nature. He also can raise rabbits. He has twenty rabbits ready for sale.

The lady at the farm and ranch store said she’ll take them all, especially the big white meat rabbits. I guess I will put my big doe back into production.

For some reason, there appears to be a run on rabbits.

brian
brian

When we had the farm we started out paying $45/hog and about a buck for chicks. Todays prices are well over $150 here and chicks are $4 – 5 per chick. Its pricey now and I’d only raise product for family. Got tired of the whining and constant asking for ‘discounts’.

When we sold our farm we had more chickens than we could process and store. So I put out a notice that said you can have them for free but you have to bring your own freezer bags and clean the birds. We bought another freezer.

StackingStock
StackingStock

It’s not hyper yet, but it’s heading that way just like it did in the Weimar Republic. It’s really starting to pick up speed now, the Weimar thing was a ten plus year event before it fucking blew up and went hyper.

Hey Stuck, have you been to the Capital lately?

BUCKED/BUY MORE AMMO/BOURBON TOO
BUCKED/BUY MORE AMMO/BOURBON TOO

Volker is the turd biscuit that started it all . He advised Nixon to close the gold window .

Daddy Joe
Daddy Joe

OK, Hyperinflation. It’s either coming or it’s here already. Take your pick. So what can we do besides watch and wring our hands? For your consideration I present Daddy Joes’ Hyperinflation Defense Pyramid.
A pyramid is always built from the base up so the Order is most important. So here are the six layers–in order.
God, guts, guns, groceries, gadgets, and gold. Six G’s. It’s that simple. Now, expounding one layer at a time:
1. God. If God is not the foundation your pyramid will be unstable. period. One must have an eternal perspective and belief in a greater purpose than oneself. If you simply believe that we live and die like animals you will also find it difficult to find the inspiration that will be required of you. You must believe that God is just and good and that He desires and is able to bless and preserve you for His purpose even in the midst of a broken and fallen world. You must know what you believe and why you believe it. If this is not for you the other 5G’s may still help you in this world but your foundation is built on shifting sand, and they definitely won’t carry you into the next world. If you haven’t got this one right you can stop now, downvote me, and come back after this first G is in place.
2. Guts. This refers to those character traits that will be needed in abundance to weather not only hyperinflation, but all of lifes trials and tribs. Intangibles like Endurance, Discipline, Resolve, Courage, Fortitude and Responsibity to name but a few. By the way, wisdom doesn’t come from this world. These traits don’t come quickly so better start now. They come from use, challenges met and failures endured. Start small and build on your success. Challenge yourself and fail some now while the stakes are small. Failure is a better teacher than success. The price of failure will also be hyperinflationary.
Why are guts (2) needed before Guns (3)? Because guts MAY suffice even without guns, but guns will never do without guts. Without character and backbone you’ll never use even the first of your large collection of guns. Ownership is not mastery. By the way, cajones are guts too!
3. Guns. These are merely tools that enable more efficient manifestation of either: (you choose) a. your God-given and finely honed character traits; or b. your unsound judgement, poor morals and the consequences thereof. Like all tools, guns are force multipliers. They are necessary to level the playing field because the bad boys (both authorized and unauthorized) will always have guns. Don’t take rocks and rolling pins to a fight, and don’t take guns either if you leave God and guts back home.
Get ammo too while you can. Without ammo guns are just rocks and sticks. I’ve never lost money on ammo. Ammo is in the process of becoming one of the new alternative currencies..
4. Groceries. In a hyperinflation the price of food has no limit. Lock in todays’ prices while you can. Availability as we have recently found out will be reduced.. All through history it ALWAYS comes down to food. If you don’t have food you will be corrupted by hunger and will use your guns to get some. Eventually that gets you killed, so if that is your plan A you must ask yourself how long will your luck last. Groceries includes water. Of course you need to garden, preserve food and learn your local edibles.
5. Gadgets. Actually tools is a better word. Once again, force multipliers. It’s about efficiency and calories burned to complete a task. Having said that there is still a preference toward quality hand tools. Who wants to haul water, do laundry, cut wood, or grind grain on a daily basis? If you can do these things for others you will always be useful and employable. Also includes parts, pumps, plastics, fasteners, fuel, pipe, abrasives, small barterable manufactured items, and just use your imagination.
6. Gold. Actually PM’s, but you know it’s that G thing again. PM’s are historical currencies, but they may or may not be useful as such for a while. This is your wealth spillover category. Do not buy PM’s in a big way until the other 5 Gs are in place or you’ll just spend them to get the other Gs.. PMs are for wealth storage. They move your surplus into an uncertain future. Do not buy unless you are willing to hold until the rule of law returns; or if you are content to pass it along invisibly to your heirs.
This just hits the high points. Many more items I could mention like arable land, solar capacity, tractor, trees, small sawmill etc. I hope this is helpful for your planning and organizing. Your mileage may vary. Remember , the order is important–don’t skip a layer or try to run ahead.
If someone wants to post as a stand alone article I would be most pleased if anyone would benefit . Thank you.

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