Inflation: Hello Weimar - The American Spectator | USA News and Politics
Inflation: Hello Weimar
One-million mark notes used as notepaper, October 1923 (German Federal Archives/Wikimedia Commons)

It had to happen. It is almost like an Econ 101 exam question: What happens if you take an economy already in strong upsurge and add to it by pumping trillions — not billions, trillions — of borrowed dollars into it? At the same time, you pay workers not to work, but to stay home and watch reruns of Perry Mason on TV.

They stay home. The meat does not get made. The Russians and the Chinese attack the computers that control meat supply and vegetable supply and restrict output.

So we have a huge uptick in money supply and a contraction in food and cars and dwellings supply.

The classic definition of how we get inflation: too much money chasing too few goods and services.

The solution: rationing by pricing. Restrict consumption by raising the price. Thus we get much higher meat prices. Astounding potato prices. And then the super housing crisis, where the price of dwellings rockets up as demand soars and supply cannot be raised except with a year’s delay.

Then there are specialties like car rentals: there is a worldwide shortage of computer chips. Cars and trucks desperately need chips. The rental car companies sold off their fleets at the beginning of COVID. Now they cannot replace them. Travel is reviving like an atom bomb. But there are no, and I mean no, cars to be had by the rental car companies.

Hence, cars that used to rent for $50 a day are now $500 a day or more.

Or there just are no cars to be had at any price. Then the price becomes $600 a day, and magically there are cars to be had.

This is super-inflation. Weimar Germany–type inflation. Yes, that bad.

It’s happening right now. Incredibly, the Biden regime is pouring gasoline on the fire by yet more COVID stimulus spending and borrowing, driving up demand and doing nothing for output.

Voodoo economics indeed.

My father, Herbert Stein, and I wrote a novel about Weimar-level inflation in the USA back in 1977. It was cued by the inflation of the mid- and late 1970s. It was called On the Brink. Then we wrote a book about how to invest in inflationary eras. It was called Moneypower: How to Make Inflation Make You Rich.

Gold, real estate, borrowing to buy gold and real estate.

The bad news is that inflation might get far worse. The good news is that all inflations always end. This one will, too. But with a scream or with a whimper?

We just don’t know yet, and neither does Mr. Powell nor Mr. Biden nor you nor I.

Ben Stein
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Ben Stein is a writer, actor, economist, and lawyer living in Beverly Hills and Malibu. He writes “Ben Stein’s Diary” for every issue of The American Spectator.
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