One (1) indictment–well, actually, all the way through to a guilty plea. That’s an infinity percent increase over what it was before.
Such a target-rich environment.
Q warns us that we will be shocked.
I guess I should stop and think about that. Hmm…well my response is still:
Bring it on!!! We’re not tired of winning. Far from it:
We haven’t even begun to win!
Time for some long overdue winning on the Justice Front!!!
Our movement is about replacing a failed and corrupt political establishment with a new government controlled by you, the American People...Our campaign represents a true existential threat, like they’ve never seen before.Then-Candidate Donald J. Trump
Lawyer Appeasement Section
OK now for the fine print.
This is the WQTH Daily Thread. You know the drill. There’s no Poltical correctness, but civility is a requirement. There are Important Guidelines, here, with an addendum on 20191110.
We have a new board – called The U Tree – where people can take each other to the woodshed without fear of censorship or moderation.
And remember Wheatie’s Rules:
1. No food fights
2. No running with scissors.
3. If you bring snacks, bring enough for everyone.
4. Zeroth rule of gun safety: Don’t let the government get your guns.
5. Rule one of gun safety: The gun is always loaded.
5a. If you actually want the gun to be loaded, like because you’re checking out a bump in the night, then it’s empty.
6. Rule two of gun safety: Never point the gun at anything you’re not willing to destroy.
7. Rule three: Keep your finger off the trigger until ready to fire.
8. Rule the fourth: Be sure of your target and what is behind it.
(Hmm a few extras seem to have crept in.)
A Cautionary Tale, in Lieu of the Mandatory Coin
Now it wouldn’t be one of my posts without a coin, would it?
Well, I guess this must not be one of my posts, then, because this is not a coin.
This is the climax of the worst inflation the world has ever seen.
Lately, Zimbabwe has been famous for its One Hundred Trillion Dollar notes, that were never worth anything in foreign exchange (yet are worth a score or two of US dollars in the collector’s market). I once got to see a display of something like twelve different denominations in the series, the uppermost were 10, 20, 50, and 100 trillion dollar notes.
Inflation is not an increase in prices. That’s a symptom. It’s an increase in the money supply. If the increase happens to be faster than actual economic growth, then money becomes less valuable (a widget is now worth more units of money), which since we think of money as the measuring rod, looks like an increase in prices, when the real issue is that our “ruler” is shrinking.
OK, so I showed you a Hungarian note from just after World War II, and said it was worse than 100 trillion (Zimbabwe used toilet paper) dollars.
The note says it’s a “milliard b-pengős.” Well if you don’t happen to know a few things I am about to explain, you might imagine, well, “milliard” is just a foreign word for “million” and a B pengő is maybe a different pengő from an A pengő. So how is a million of something worse than a hundred trillion of something else?
Because it isn’t, actually, a million of something.
Most people are unaware that there are two distinct ways of reckoning large numbers. There’s the “short scale” and the “long scale.” In the United States, we use the short scale. On continental Europe and all of their former colonies (except Brazil), they use the long scale. The United Kingdom formerly used the long scale, but they were increasingly using the short scale in speech (thanks to Yankee cultural influence, most likely) and in 1974 their government finally gave in and formally adopted the short scale.
The short scale and the long scale both have the same definition of a thousand, 1,000, and a million, 1,000,000. The short scale goes on: 1,000,000,000 is a billion, 1,000,000,000,000 is a trillion. Add three zeros, move up one more Latin prefix before “-llion”: quadrillion, quintillion, sextillion, septillion, octillion, and so on. If someone tells you the Earth’s mass is 13 septillion pounds, and you’re wondering how many zeros that is, translate “septi” into 7, add one to it (8) and multiply by 3, to get 24 zeros. 13,000,000,000,000,000,000,000,000.
But you’d better be sure they’re operating on the short scale, because the long scale is quite different. On the long scale, 1,000,000 is a million also, but then 1,000,000,000 is called either a thousand million or a milliard. Only after you add another three zeros, 1,000,000,000,000, do you bring out the word “billion.” Add three more zeros, 1,000,000,000,000,000 and you have, believe it or not, a billiard. Then a trillion, then a trilliard, and so on. In a way, you can think of it as using groups of six zeros, not three zeros. How many zeros in a trillion (long scale)? Turn “tri” into 3, multiply by six, done: 18 zeros. So an old-school Brit might claim the Earth’s mass is 13 quadrillion pounds, which after all is 6 x 4 = 24 zeros. (In many ways, this is cleaner and makes more sense than our short scale, but the short system is what we’ve got, and I’ll use it.)
Anyhow, you probably already see part of the answer to the mystery of the 1 milliard B-pengő note, I telegraphed it pretty strongly. It’s not a million, it’s a billion, which they called a milliard, B-pengős. Milliard isn’t just some weird Hungarian word for million. (Leaving aside the issue of whether any Hungarian word will ever seem normal to a speaker of any Indo-European language, and vice versa.)
And looking around a bit, you will see that Germany issued milliarden mark notes during its inflation in the 1920s, those too are nine zeros, what we call a billion. Germany is on the European continent and uses the long scale. (Apparently Russia uses the short scale. And so does Zimbabwe.)
If you ever listened to the G. Gordon Liddy show, he regularly used “thousand million” for nine zeros (short billion), and “million million” for twelve zeros (short trillion, long billion). That is unambiguous, no matter which system you’re used to, and it can also be clear to the innumerate who think a billion is “what, maybe two million?” (No, I’m not kidding.)
OK, getting back to that Hungarian note: You may be thinking, “ok so it was a billion b. pengős; that’s nine zeros, still a lot less than a hundred trillion, which is fourteen zeros!”
But the B, it turns out, stands for “billion.” A B pengő is not some new improved A pengő, it’s a billion pengős. Their billion, with twelve zeros, not our puny little nine-zero billion.
So a milliard B pengős was 1,000,000,000,000,000,000,000 pengős. Twenty one zeros.
Now there are places that have inflated their money just about as much. Yugoslavia devalued its currency multiple times between World War II and the late 80s, if you stack that up, and look at the 500 billion (our billion) notes at the end, yeah, they were up to twenty five or twenty six zeros of their original dinar. But that took decades.
Hungary went from three to 21 zeros in just over a year, and that’s just their paper money. As we’ll see below, the exchange rate against the dollar tacked on 28 zeros in almost exactly a year. This utterly annihilates what Germany went through in the 1920s, and we’ve all heard those stories, wheelbarrows full of money, people being paid at noon and the end of the workday so they could immediately spend their pay before it became worthless.
Pengő derives from peng, an onomatopoeic word for the sound of ringing, as in the sound silver coins make. The pengő was adopted in 1927 as the Hungarian currency, it consisted of 100 fillér, and replaced the…um…korona (crown). But it wasn’t until after World War II ended that the pengő jumped into the toilet, reached out of the bowl, and pulled down on the handle.
In order to cut down on zeros, the milpengő was introduced. This allowed them to use the same paper money designs again, then the b. pengő after the milpengő became as valueless as the pengő was when the milpengő had been introduced. Note the the paper money above has a colored background with a B cut out of it, and pengő is replaced by B. pengő.
Here are the regular milliard, and milliard milpengő notes to compare.
Notice that they are essentially the same, they just had to change the text in the middle. And of course running it off in a different color is as simple as changing the ink on the press. They didn’t even have to change the value in the “counter” on the left.
(Did you ever wonder why they always put the numbers inside fancy spirograph-like patterns on paper money, known as counters? It’s to make it harder for some unscrupulous schmuck to change the number. He can’t just scrape a one off and put a five in its place without leaving obvious holes in the pattern. (The ink on paper money rests on the surface of the paper and can be scraped off, anything left over can be bleached.) This was quite an issue in the early 1800s when banks issued their own notes and the designs rarely were standardized. Some guy in Gasoline Alley, Michigan might not know that the ten dollar bill from the First Bank of Outer Slobbovia, Delaware, was really a one dollar bill “raised” to a ten by a counterfeiter, because in Gasoline Alley, no one knew what Outer Slobbovia bank notes were supposed to look like. This lesson [put your denominations in counters] was learned the hard way in the early 1800s. And later, banknotes became standardized so they all had the same design with different lettering, and under strict government oversight.)
Anyhow, note that both the milliard milpengő and the milliard b-pengő were issued–or at the very least, authorized legally–in June of 1946, on the same day, the third. Two notes, one worth a million of the other, issued the same day! The implication is that they already expected that money would drop in value by a factor of a million in short order. Can you imagine that hundred dollar bill in your wallet on June 1 being worth 1/100th of a cent at the end of the month? Or imagine a “strap” (banker’s bundle) of one hundred, one hundred dollar bills on June 1st not being worth picking up off the ground at the end of the month, because it’s only worth what a Lincoln head cent was on the first of the month.
Of course we can’t really know from this issue date alone that it took a month to drop to a millionth of its prior value.
Maybe it was even faster.
Taking a look at the exchange rates allows us to fill things in. On the first of January 1927, when the pengő was introduced, the US dollar was worth 5.26 pengős. On the 31st of March, 1941, it was 5.06 pengős (the pengő had gone up, unsurprising because the dollar had been devalued by Roosevelt when he confiscated the gold). By the 30th of June, 1944 it was 33.51 to the dollar. Not too bad for an Axis country losing the war. At the end of August, 1945, it had slipped to 1320. So in a bit over a year, it had become worth about 1/40th what it was worth the year before. Bad for anyone who had pengős stuffed in his mattress because he didn’t trust banks, but people could adapt to this if they had to.
But Hungary was allied with Germany, and had lost the war. The Soviets demanded huge reparations, and were plundering Hungarian industry. (Communists rarely produce anything; they subsist by looting others. See any downtown Democrat-run city for evidence that this continues to be true today.) The US actually had custody of Hungary’s gold reserves; the puppet communist government the Soviets were setting up couldn’t use that.
Three months later at the end of November, however, it took 108,000 pengős to buy a dollar. Yowza, almost a hundred fold loss in three months. But you ain’t seen nothin’ yet. And that’s what the pengő was now worth: nothing! By the end of March, 1946, 1,750,000 pengös to the dollar. One month later–one month later— it was 59 billion pengős to the dollar, 59 followed by nine zeros. A month after that it was 42 quadrillion pengős, 42 followed by fifteen zeros. (And yes these are all short scale, “Murrican” numbers.)
The next datapoint on Wikipoo is 10 July 1946. 460 octillion pengős to the dollar. That’s 27 zeros after the 460, or 28 after the 46. In forty days, May 30 to July 10, not a million, but more than a ten trillionfold (thirteen zero) loss in value had occurred, from 15 zeros after a 42, to 28 zeros after a 46. That’s equivalent to a dollar becoming worth a dime in three days, and then the cycle repeating itself twelve more times. A millionfold loss in a month? Ha, ha, ha! What an unicorn-fart-sniffing optimist I was!
That note I started this off with had 21 zeros built into it. It would have taken 460 million of these notes to equal one dollar. But there weren’t 460 million of them. Hungary, after all, doesn’t have all that many people in it, so why produce so many notes of one denomination?
It turns out these notes were produced but never issued–the 100 million b. pengő, one tenth the nominal value, was the highest note actually issued. I suspect by the time they were made they had already been overcome by events and become worthless, so why bother?
At the very end, every single paper pengő in existence, put together, was worth less than a tenth of a US cent. Now all of the pengős put together had become…nothing.
The pengő was replaced by the forint (also of 100 filler) on August 1st 1946. One forint was worth 400 octillion pengős. But that is a fictitious exchange rate since every pengő in circulation put together was worth one thousandth of a forint. No one was going to buy so much as a single forint with pengős. I remember seeing pictures of littered streets in Budapest…the gutters strewn with what had once been money. I looked just now and found this:
But the forint, at least was comparable to a dollar (460 octillion pengős).
The government had learned its lesson and the forint was relatively stable. In 1992 eighty forints were roughly worth a dollar. Which is not as good as it sounds, because the dollar had itself inflated quite a bit since 1946, but still a far, far cry from what happened in 1946.
There was just one more problem left for Hungary. They had used up so much good quality security paper printing pengős that they had trouble finding any to make the new forint. But this problem could be solved.
Zimbabwe was so badly off when it ran out of paper, it had to stop printing money. No one would sell them any more. And just like that the Zimbabwean inflation stopped.
Could this happen here?
Yes. If we don’t get government spending under control, something will break. Either we default on our debt or we print money to cover it, or our government really tightens its belt.
I suspect I will live long enough to hear people talking about quadrillion dollar federal debts, deficits and budgets. We’ve gone from a trillion dollar debt to almost 27 trillion in about 40 years, that’s a 27 fold increase and one more of those puts us at 729 trillion bucks, almost a quadrillion. Bush and Obola both doubled the debt. Trump will likely do the same (sorry, but that’s the truth, and yes, it is partially his fault), making it eight times as large as it was just 24 years ago. One projection says 78 trillion in 2028. Sigh.
All debts are paid. Either by the person who owes the money…or by the person who lent it. Or if the government cranks up the printing presses someday, it will be paid by third parties who have no choice in the matter. Inflation is theft.
Maybe it wouldn’t be 1946-Hungary-bad if our government took the inflation route…but it would be bad. I heard the stories of suffering in Russia during its much-less-severe inflation after the Soviet Union collapsed; many many people were on a fixed income. Hmm, $5000 a month won’t sound so hot when every dollar in existence put together won’t buy you a dust bunny.
I don’t know much about this alleged monetary shift some people talk about being imminent, but I hope it’s nothing like this, because, folks:
We don’t want this.
Disclaimer: Neither these, nor any other coins or paper money I post, are mine. With older coins, I’m going to find the best pic of one on the internet, so even if I should happen to have one, it’s not the nicest one on earth and I’ll show another…and some coins are worth more than my net worth so I certainly won’t have those!
PS: Precious metals closings, 21 August 2020 (all values are Kitco Ask):
Gold $1943.40 (it has bounced around a lot this week but was fairly steady on Friday), Silver $26.92, Platinum $926 (on sale!), Palladium $2219, Rhodium $12,200.
Remember that gold was once $20.67 by definition, and look at today’s price, and see what has happened to the dollar…it’s worth barely a 1913 cent. In fact gold actually hit $2067.20 one day not too long ago. Inflation walks among us, mostly unnoticed, but piling up as time goes on.
Another PS: You might wonder what the Hungarians used if they never issued the milliard b pengő note, and clearly they’d need huge denominations, T pengős, Q pengős, and so on. Well they had created an adópengő, literally “tax pengő” for budget planning purposes, but it became a real piece of money in July, worth 2 of those bills I started with apiece. It was supposed to hold its value. It didn’t but it fell much less rapidly than the regular pengő. When the 100 million b. pengő note became worthless, the adópengő took over…for the rest of the month.
To conclude: My standard Public Service Announcement. We don’t want to forget this!!!
Remember Hong Kong!!!
Zhōngguò shì gè hùndàn !!!
China is asshoe !!!