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Dying of Money: Lessons of the Great German and American Inflations
The cover motif is a piece of old German money. It is a Reichsbanknote issued on August 22, 1923 for one hundred million marks. Nine years earlier, that many marks would have been about 5 percent of all the German marks in the world, worth 23 million American dollars. On the day it was issued, it was worth about twenty dollars. Three months later, it was worth only a few thousandths of an American cent. The process by which this occurs is known as inflation.
A few years before, in 1920 and 1921, Germany had enjoyed a remarkable prosperity envied by the rest of the world. Prices were steady, business was humming, everyone was working, the stock market was skyrocketing. The Germans were swimming in easy money. Within the year, they were drowning in it. Until it was all over, no one seemed to notice any connection between the earlier false boom and the later inflationary bust.
In this book, Jens O. Parsson performs the neat trick of transforming the dry economic subject of inflation into a white-knuckles kind of blood-chiller. He begins with a freewheeling account of the spectacular inflation that all but destroyed Germany in 1923, taking it apart to find out both what made it tick and what made it finally end. He goes on to look at the American inflation that was steadily gaining force after 1962. In terms clear and fascinating enough for any layman, but with technical validity enough for any economist, he applies the lessons gleaned from the German inflation to find that too much about the American inflation was the same, lacking only the inexorable further deterioration that time would bring. The book concludes by charting out all the possible future prognoses for the American inflation, none easy but some much less catastrophic than others.
Mr. Parsson brings much new light to bear on this subject. He lays on the line in tough, spare language exactly how and why the American inflation was caused, exactly who was responsible for causing it, exactly who unjustly benefited and who suffered from the inflation, exactly why the government could not permit the inflation to stop or even to cease growing worse, exactly who was going to pay the ultimate price, and exactly what would have to be done to avert the ultimate conclusion.
This book packs a wallop. It is not for the timid, and it spares no tender sensibilities. The conclusions it reaches are shocking and are bound to provoke endless dispute. If they proved to approximate even remotely the correct analysis of the American inflation, hardly any American citizen could escape being the prey of inflation and no one could afford not to know where the inflation was taking him. In the economic daily lives of everyone, nothing will be the same after this book as it was before.
A few years before, in 1920 and 1921, Germany had enjoyed a remarkable prosperity envied by the rest of the world. Prices were steady, business was humming, everyone was working, the stock market was skyrocketing. The Germans were swimming in easy money. Within the year, they were drowning in it. Until it was all over, no one seemed to notice any connection between the earlier false boom and the later inflationary bust.
In this book, Jens O. Parsson performs the neat trick of transforming the dry economic subject of inflation into a white-knuckles kind of blood-chiller. He begins with a freewheeling account of the spectacular inflation that all but destroyed Germany in 1923, taking it apart to find out both what made it tick and what made it finally end. He goes on to look at the American inflation that was steadily gaining force after 1962. In terms clear and fascinating enough for any layman, but with technical validity enough for any economist, he applies the lessons gleaned from the German inflation to find that too much about the American inflation was the same, lacking only the inexorable further deterioration that time would bring. The book concludes by charting out all the possible future prognoses for the American inflation, none easy but some much less catastrophic than others.
Mr. Parsson brings much new light to bear on this subject. He lays on the line in tough, spare language exactly how and why the American inflation was caused, exactly who was responsible for causing it, exactly who unjustly benefited and who suffered from the inflation, exactly why the government could not permit the inflation to stop or even to cease growing worse, exactly who was going to pay the ultimate price, and exactly what would have to be done to avert the ultimate conclusion.
This book packs a wallop. It is not for the timid, and it spares no tender sensibilities. The conclusions it reaches are shocking and are bound to provoke endless dispute. If they proved to approximate even remotely the correct analysis of the American inflation, hardly any American citizen could escape being the prey of inflation and no one could afford not to know where the inflation was taking him. In the economic daily lives of everyone, nothing will be the same after this book as it was before.
372 pages, Hardcover
First published April 28, 1974
49 people are currently reading
1079 people want to read
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Displaying 1 - 23 of 23 reviews
March 8, 2021
Wow... this book makes me question the 5-star ratings I gave to other books of the category. This is the most comprehensive information on money and inflation I’ve come across. And probably more correct than the others.
May 16, 2021
Much better than I anticipated. I posted several quotes form this book on Linked In. Also, Dr. Michael Burry said everyone should read this book....so enough said.
February 23, 2021
”The price of a schnitzel dinner might rise 20 percent between giving the order and paying the check.”
March 29, 2021
This may be the most important book I've ever read.
Price level = (Money quantity X Money velocity) / (Supply of all real values)
A simple, but important equation.
Price level = (Money quantity X Money velocity) / (Supply of all real values)
A simple, but important equation.
March 4, 2023
Even though this book was written in the 1970s, it explains many of the reasons for the 2021 inflation surge that is still developing at this moment. The psychology of money and government has not changed that much. I guess like many others, I found this book because Michael Burry quoted some lines of it, and despite not sharing many of the pessimistic views of MB, I really enjoyed this read.
December 31, 2022
No better way to end 2022 than this book. It doesn't read like a book written almost fifty years ago. Much of what has been written is so true even today. The book deals with the American Inflation of the 70s. Though the author is not privy to how things unfolded (with neo liberalism and supply side economics winning the day; for better or for worse), he goes about identifying the problems like very few economists could. He prescribes solutions which pass both the common sense test as well as academic rigor. I wish these were the books they taught you when teaching financial history. If you ever give this a go, please read Arthur Burns' essay titled, "The Anguish of Central Banking".
January 20, 2023
Very interesting piece by Jens O. Parsson.
We first get to have an historical insight into the Great German Inflation that happened a century ago. The chronological parcours of such an historical episode with tremendous ramification allows us to put in context not only inflation, the core concept described in this book, but also its potential implications which extend far beyond economics.
Afterwards, Jens carries on with an issue that was present at the time of writing, the Great American Inflation during the 70s. He again proceeds to build a chronological spectrum of the situation since the WW2. This allows him to enumerate common denominator that allows inflation to rise like a phoenix. Obviously, these common denominators were in fact present since Kenedy administration up to the moment at which the book was published.
What makes this book more interesting than some of his peers is that it’s not a simple recollection of history. Indeed, Jens will give his best attempt at providing solutions to jugulate inflation. As we know today, inflation proved to be a temporal phenomenon, and contrasting the reason for its downfall with Jens’ detailed proposal makes the exercise even more enlightening.
Hence, I greatly recommend this book to not only people with a penchant for economics, but also for history!
We first get to have an historical insight into the Great German Inflation that happened a century ago. The chronological parcours of such an historical episode with tremendous ramification allows us to put in context not only inflation, the core concept described in this book, but also its potential implications which extend far beyond economics.
Afterwards, Jens carries on with an issue that was present at the time of writing, the Great American Inflation during the 70s. He again proceeds to build a chronological spectrum of the situation since the WW2. This allows him to enumerate common denominator that allows inflation to rise like a phoenix. Obviously, these common denominators were in fact present since Kenedy administration up to the moment at which the book was published.
What makes this book more interesting than some of his peers is that it’s not a simple recollection of history. Indeed, Jens will give his best attempt at providing solutions to jugulate inflation. As we know today, inflation proved to be a temporal phenomenon, and contrasting the reason for its downfall with Jens’ detailed proposal makes the exercise even more enlightening.
Hence, I greatly recommend this book to not only people with a penchant for economics, but also for history!
March 12, 2021
Parsons challenges the conventional wisdom of economists and how we think about inflation. Comparing the inflation of Weimar Germany to the inflation of the 1950s-1970s United States, Dying of Money draws similarities to a short-hyper inflation compared to a long drawn out compounding inflation.
While there are a few concepts I’m not fully bought into, there are golden nuggets that truly reframe inflation. In particular, the ways in which we understand, measure, and handle inflation. Conventional wisdom does not prove to be effective and Parsons shares alternatives views.
For an economics book, there are some incredible one-liners and thought provoking thoughts that do not apply solely to economics. This is one of my favorites:
“The weaving of history is a spectator sport. It is a play without a director. No man, not even kings or presidents or prime ministers, is much more than a spectator to the events and sometime bit player.”
Well worth a read!
While there are a few concepts I’m not fully bought into, there are golden nuggets that truly reframe inflation. In particular, the ways in which we understand, measure, and handle inflation. Conventional wisdom does not prove to be effective and Parsons shares alternatives views.
For an economics book, there are some incredible one-liners and thought provoking thoughts that do not apply solely to economics. This is one of my favorites:
“The weaving of history is a spectator sport. It is a play without a director. No man, not even kings or presidents or prime ministers, is much more than a spectator to the events and sometime bit player.”
Well worth a read!
May 21, 2021
"Inflation was, as it always is, a fraud on workers, and workers were the perfect dupes of their chosen leaders"
Sehr wichtiges Buch über die Inflation!
Die Inflation entsteht laut dem Autor aufgrund von drei Faktoren:
1) Geldmenge (determiniert von/durch Zentralbanken)
2) Geschwindigkeit des Geldes, psychologischer Faktor des Geldes (Velocity of money)
3) Angebot der realen (produzierten) Güter
und gibt folgende Gleichung an
Preisniveau = (Money Supply X Money Velocity) / Supply of all real values
Um Inflationen zu stoppen, sind drei Voraussetzungen nötig:
Preise müssen steigen, die Steigerung der Geldmenge muss aufhören, der Geldwert muss entwertet werden.
Der Geldtransfer durch die Inflation von unten (Arbeiter) nach oben (Investoren, Besitzende) ist durch die Komplexität des Themas geschützt.
Sehr wichtiges Buch über die Inflation!
Die Inflation entsteht laut dem Autor aufgrund von drei Faktoren:
1) Geldmenge (determiniert von/durch Zentralbanken)
2) Geschwindigkeit des Geldes, psychologischer Faktor des Geldes (Velocity of money)
3) Angebot der realen (produzierten) Güter
und gibt folgende Gleichung an
Preisniveau = (Money Supply X Money Velocity) / Supply of all real values
Um Inflationen zu stoppen, sind drei Voraussetzungen nötig:
Preise müssen steigen, die Steigerung der Geldmenge muss aufhören, der Geldwert muss entwertet werden.
Der Geldtransfer durch die Inflation von unten (Arbeiter) nach oben (Investoren, Besitzende) ist durch die Komplexität des Themas geschützt.
June 14, 2021
This is the sort of book that should be required reading. At the core it explains how the definition of inflation is an increase in the money supply, the result of which is higher prices. Old dictionaries still have that definition. Now, people look at the increase in prices as inflation, which misses the cause.
Inflation always gives the positive effects first, which is why so many governments throughout history, and across the globe, have all tried it. The result does not follow the exact same path every time, but similar enough that countries should be able to learn from the mistakes of those who have tried it before.
He ends by explaining how one can try and prepare for inflation.
Fairly easy read that should be read by all who want to understand how the economy works, and what increasing the money supply is likely to do to any economy in the future.
Inflation always gives the positive effects first, which is why so many governments throughout history, and across the globe, have all tried it. The result does not follow the exact same path every time, but similar enough that countries should be able to learn from the mistakes of those who have tried it before.
He ends by explaining how one can try and prepare for inflation.
Fairly easy read that should be read by all who want to understand how the economy works, and what increasing the money supply is likely to do to any economy in the future.
July 1, 2021
If ever you wanted to get an idea of what will happen to your income, interest rates, cost of living, in this world of money printing, this book is a brilliant start. It gives a very easy to understand explanation of how inflation operates - what works, and doesn't work to halt it, and why in most cases, governments don't want to halt it. Using examples from history, this book gives a look into the future of what we can expect with all the money printing going on around the world in 2020/2021 and beyond and helps you to better prepare yourself for coming out the other end as best you can.
June 8, 2021
Great read - really covers a huge amount of information: history, economics, monetary policy, politics, psychology... did not expect it to be so comprehensive.
Engrossing start to the book, introducing the pre-WW2 German inflation, then following into the US inflation and explanations of the causes and effects of inflation in general. Plenty of important lessons and written in a direct, no-nonsense manner.
Engrossing start to the book, introducing the pre-WW2 German inflation, then following into the US inflation and explanations of the causes and effects of inflation in general. Plenty of important lessons and written in a direct, no-nonsense manner.
September 7, 2022
A must read in this delicate times. Deep technical explanation of critical issues in public policy (tax, expenditure, dogma) in the search of constant growth and progress and the hard truth about synthetic progress when inflation finally comes and takes its cost.
Deeply analytic with a centric and critic view . A shame the author did not see the end of the real chapter in the 70s inflation.
Deeply analytic with a centric and critic view . A shame the author did not see the end of the real chapter in the 70s inflation.
December 20, 2022
Incredible book. Felt like it was written in present day discussing the current episode of American inflation. Amazing how timeless the author’s succinct explanations of inflation (its causes & effects) have proven to be. A must read for anyone attempting to better understand the macroeconomic world around them.
September 8, 2021
Starts dry, but by chapter 25, it becomes fascinating. I wasn't expecting any discussion of taxation, but the author shows how forms of taxation can achieve some of the benefits of inflation without the inevitable downsides.
May 17, 2024
This book makes the complex and boring topic of inflation clear, simple, and fascinating. It provides compelling explanations on what creates inflation and proposes uncharted solutions through taxes and other mechanisms. This however, assumes competence and trust in a nation’s government. Parsson also assumes that monetary policy is within the government’s purview (to a certain extent) and that there’s no upper limit to consumption. It’s an easy read and accessible to people without a financial background.
May 21, 2021
A very interesting take on economic policy. Worth the read.
May 24, 2021
Completely perspective changing! A must read if you want to better understand the economy and how to best manage your own money.
June 12, 2021
Probably a good read when kids aren't climbing your back
February 7, 2022
M. Burry recommended at the onslaught of inflation.
December 11, 2023
Very interesting piece by Jens O. Parsson.
We first get to have an historical insight into the Great German Inflation that happened a century ago. The chronological parcours of such an historical episode with tremendous ramification allows us to put in context not only inflation, the core concept described in this book, but also its potential implications which extend far beyond economics.
Afterwards, Jens carries on with an issue that was present at the time of writing, the Great American Inflation during the 70s. He again proceeds to build a chronological spectrum of the situation since the WW2. This allows him to enumerate common denominator that allows inflation to rise like a phoenix. Obviously, these common denominators were in fact present since Kenedy administration up to the moment at which the book was published.
What makes this book more interesting than some of his peers is that it’s not a simple recollection of history. Indeed, Jens will give his best attempt at providing solutions to jugulate inflation. As we know today, inflation proved to be a temporal phenomenon, and contrasting the reason for its downfall with Jens’ detailed proposal makes the exercise even more enlightening.
Hence, I greatly recommend this book to not only people with a penchant for economics, but also for history!
We first get to have an historical insight into the Great German Inflation that happened a century ago. The chronological parcours of such an historical episode with tremendous ramification allows us to put in context not only inflation, the core concept described in this book, but also its potential implications which extend far beyond economics.
Afterwards, Jens carries on with an issue that was present at the time of writing, the Great American Inflation during the 70s. He again proceeds to build a chronological spectrum of the situation since the WW2. This allows him to enumerate common denominator that allows inflation to rise like a phoenix. Obviously, these common denominators were in fact present since Kenedy administration up to the moment at which the book was published.
What makes this book more interesting than some of his peers is that it’s not a simple recollection of history. Indeed, Jens will give his best attempt at providing solutions to jugulate inflation. As we know today, inflation proved to be a temporal phenomenon, and contrasting the reason for its downfall with Jens’ detailed proposal makes the exercise even more enlightening.
Hence, I greatly recommend this book to not only people with a penchant for economics, but also for history!
July 24, 2021
An important history lesson.
Displaying 1 - 23 of 23 reviews