Bearish News

Been researching the history of hyperinflation a bit lately, and I came across an interesting article about a mental condition known as zero stroke or cipheritis, which was (supposedly) a mental condition identified by German doctors during the 1919-1923 period in which the German mark lost essentially all its value.

From Time Magazine, 1923:

The last return of the Reichsbank gave the total German note circulation as 92,844,720,742,927,000,000 marks, nearly 93 quintillions.

With the price of bread running into billions a loaf the German people have had to get used to counting in thousands of billions. This, according to some German physicians, brought on a new nervous disease known as “zero stroke,” or “cipher stroke,” which may, however, be classed with neuritis as cipheritis.

The persons afflicted with the malady are perfectly normal, except “for a desire to write endless rows of ciphers and engage in computations more involved than the most difficult problems in logarithms.”

More from Wiki:

Zero stroke or cipher stroke was a term used to describe a mental disorder reportedly diagnosed by physicians in Germany under the Weimar Republic and which was caused by hyperinflation that occurred in the early 1920s. The disorder was primarily characterized by patients’ desire to write endless rows of zeros, which are also referred to as ciphers.

Background

After the Treaty of Versailles, which formally ended World War I in 1919, Germany faced a damaged economy and a requirement to pay immense war reparations to the Allies. At the beginning of 1921, the German currency was relatively stable at about 60 Marks per US Dollar,^[1] but inflation rapidly increased after August 1921, and the Mark fell to less than one third of a cent by November 1921 (approx. 330 Marks per US Dollar). The Mark stabilized again at the beginning of 1922, but when there was no resolution to the reparations problem the inflation changed to hyperinflation and the Mark fell to 8000 Marks per Dollar by December 1922. The inflation reached its peak by November 1923, but ended in the same year when a new currency (the Rentenmark) was introduced.

Cause

The disorder was supposedly caused by the dizzying speed of hyperinflation and the calculations required to conduct commerce under its effect. It has been said that during the worst period of hyperinflation that in the time it took to drink a cup of coffee, the price for the cup could double.^[2] The fast pace of hyperinflation caused people to quickly buy goods when they received their wages.^[2] Workers would demand to be paid at the beginning of the day for their work and after they were paid, they would be given half an hour to run off to buy goods before their earnings became worthless.^[2] The requirements to calculate and recalculate commercial transactions in the millions and trillions made it practically impossible to do business.^[2]

The foreclosure wave, caused at least in part by a bank-crafted liar loans and loose monetary policy, is already causing higher levels of depression and other health problems in the U.S.

Add zero stroke and cipheritis to the list of conditions that big pharma firms could fill their dwindling pipelines with. By the time they re-brand some anti-D or benzo as a treatment for zero stroke, who knows? We could be in the midst of it. Restless pitchfork syndrome … the list goes on and on.

If you’re looking for a book on the Weimar hyperinflation, I hear When money dies: The nightmare of the Weimar collapse is good.

“How to live before you die” via TED.com. Worth a watch. RIP, Mr. Jobs.

Iraq has not done so well post-”liberation”, at least when it comes to life expectancy. Will Libya fare better? I certainly hope so, but remain skeptical of this endeavor. The War Nerd offers quite a non-traditional take on Libya, over at ex-Taibbi haunt The Exiled.

Used Google’s Public Data Explorer for this. Very neat tool, could get lost in it for a while.

Ombudsman: (n) One who investigates complaints and mediates fair settlements, especially between aggrieved parties such as consumers or students and an institution or organization.

This piece by the Washington Post’s Ombudsman, Patrick Pexton, is a must-read. Excerpts with commentary:

Overall, The Post’s record on Paul coverage is sparse.

… The Post’s main politics blog, The Fix by Chris Cillizza and compatriots, had by the far the most coverage of Paul of any of The Post’s publishing venues, with about nine posts mainly or substantially about Paul, but dozens more where he is mentioned once or twice along with the other GOP candidates.

If you’re a print reader, you don’t see much of this, but I’ve compiled it all on the omblog.

The last is a very important point. Much of the (already sparse) coverage of candiate Ron Paul does not go to print. The little they do publish is mostly on blogs, and at least some of that is “dismissive”, according to Mr. Pexton. Those who only read the print version of WaPo may barely know Paul is in the race.

The GOP’s “top tier”, as judged by the Washington Post (and others), curiously excludes Mr. Paul, as noted by Mr. Pexton:

Post political correspondents Dan Balz and Philip Rucker declared on Aug. 14 that Perry, Romney and Bachmann were the top tier, with barely a reference to Ron Paul.

And when you look a the numbers, a bias, of some sort, becomes apparent:

In the past six months, The Post has published online or in print 34 staff-written stories plus 12 wire service stories on Bachmann, who has served not even five years in the House, and that doesn’t count the blog posts about her on The Fix or Glenn Kessler’s Fact Checker pieces. The Post published 19 staff-written stories on former House speaker Newt Gingrich in that time, plus one wire story and many blog posts. On Paul, a congressman for more than 20 years, who was No. 2 in fundraising after Romney in the last report, The Post has published just three full stories, a couple more that had large sections on him along with other candidates, two wire stories and The Fix blog posts.

Thank you, Mr. Pexton, for writing this.

And thanks to fellow Ron Paul supporters, for flooding WaPo with complaints on the lack of coverage. Pexton cites this as a major factor in his decision to write it.

Mr. Paul is arguably the only non-interventionist candidate in the race. He’s been singing the same tune for decades. Watch this clip of him warning of blowback from Middle East interventions, in 1998:

It’s curious that a “left” paper such as the Washington Post would be so quick to dismiss him. Then again, maybe not. The WaPo, along with the NYT, has become increasingly hawkish.

The mainstream right also wants to discredit him. Here’s Rush Limbaugh saying Dr. Paul could “destroy the Republican party”.

Destroy the GOP, he says? You’d think the left would be more open to the possibility. Nope, they appear to agree with Rush, not Ron. If this shared aggression between neocons and neolibs towards Ron Paul isn’t a sign of a true anti-establishment candidate, I can’t imagine what would be.

Money bomb, Sep 17th.