The Chaos This Time

clipped from www.realclearmarkets.com German Chancellor Angela Merkel’s rebuke last week of central bank policies, including the loose money strategy of the U.S. Federal Reserve, didn’t get very much play in the American media, perhaps because to editors and producers it was just another moment in the theoretical debate over whether we should be worrying more about inflation or deflation and unemployment. People took more notice in Europe, however, where media outlets used words like “astonishing” to characterize her speech. There, perhaps, they understand more clearly that Germany, scarred by the hyperinflation of the Weimar years which helped lead to chaos and then Hitler’s political ascent, has charted a far more conservative, tight-fisted post-World War II fiscal policy than most developed nations. In the 1970s, inflation turned the chronology of the American dream on its head and made our lives less predictable and more chaotic.