-- Posted Sunday, 5 April 2009 | | Source: GoldSeek.com
By R. D. Bradshaw
In any discussion or analysis of the inflation/hyperinflation problem, it is inevitable that most of us quickly gravitate to the hyperinflationary blow out in the Weimar Republic of Germany in the early 1920s. But, in fact, this catastrophe was only one of many the world has faced over the years.
On this theme, here are some remarks from “Newsfromthewest.blogspot.com” of Mar 9, 2009: "Today there are some 49 countries which forbid ownership of gold by their citizens, but do allow holding gold coins for numismatic purposes. Even the Soviet Union and Eastern countries legally tolerate the acquisition of numismatic gold coins. For these are the only gold holdings that could be kept in your safe deposit box without any fear of confiscation."
The USSR
Of these cited 49, perhaps the most important one was the old Soviet Union (essentially now Russia). The Soviet problem with inflation (often at or near the hyperinflation level) was, in many ways, similar to the German problem in the Weimar Republic of the early 1920s. Wikipedia Internet Encyclopedia gives us this perspective:
“By the spring of 1915, the (Russian) army was in steady retreat, which was not always orderly; desertion, plunder and chaotic flight were not uncommon. By 1916, however, the situation had improved in many respects. Russian troops stopped retreating, and there were even some modest successes in the offensives that were staged that year, albeit at great loss of life. Also, the problem of shortages was largely solved by a major effort to increase domestic production.
“Nevertheless, by the end of 1916, morale among soldiers was even worse than it had been during the great retreat of 1915. The fortunes of war may have improved, but the fact of the war, still draining away strength and lives from the country and its many individuals and families, remained an oppressive inevitability. The crisis in morale (as was argued by Allan Wildman, a leading historian of the Russian army in war and revolution) ‘was rooted fundamentally in the feeling of utter despair that the slaughter would ever end and that anything resembling victory could be achieved.’
“The war devastated not only soldiers. By the end of 1915, there were manifold signs that the economy was breaking down under the heightened strain of wartime demand. The main problems were food shortages and rising prices. Inflation shoved real incomes down at an alarmingly rapid rate, and shortages made it difficult to buy even what one could afford. These shortages were especially a problem in the capital, Petrograd (formerly the City of Saint Petersburg), where distance from supplies and poor transportation networks made matters particularly bad. Shops closed early or entirely for lack of bread, sugar, meat and other provisions, and lines lengthened massively for what remained. It became increasingly difficult both to afford and actually buy food.
“Not surprisingly, strikes increased steadily from the middle of 1915, and so did crime; but, for the most part, people suffered and endured — scouring the city for food — working-class women in Petrograd reportedly spent about forty hours a week in food lines — begging, turning to prostitution or crime, tearing down wooden fences to keep stoves heated for warmth, grumbling about the rich, and wondering when and how this would all come to an end.
“Government officials responsible for public order worried about how long the people's patience would last. A report by the Petrograd branch of the security police, the Okhrana, in October 1916, warned bluntly of ‘the possibility in the near future of riots by the lower classes of the empire enraged by the burdens of daily existence.’
“Nicholas was blamed for all of these crises, and what little support he had left began to crumble. As discontent grew, the State Duma issued a warning to Nicholas in November 1916. It stated that, inevitably, a terrible disaster would grip the country unless a constitutional form of government was put in place. In typical fashion, however, Nicholas ignored them, and Russia's Tsarist regime collapsed a few months later during the February Revolution of 1917. One year later, the Tsar and his entire family were executed. Ultimately, Nicholas's inept handling of his country and the War destroyed the Tsars and ended up costing him both his rule and his life.
“This revolution broke out without definite leadership and formal plans, which may be seen as indicative of the fact that the Russian people had quite enough of the existing system. Petrograd, the capital, became the focus of attention, and, on 23 February (8 March) 1917, people at the food queues started a demonstration. They were soon joined by many thousands of women textile workers, who walked out of their factories—partly in commemoration of International Women's Day but mainly to protest against the severe shortages of bread. Already, large numbers of men and women were on strike, and the women stopped at any still-operating factories to call on their workers to join them.
“The mobs marched through the streets, with cries of ‘Bread!’ and ‘Give us bread!’ During the next two days, the strike, encouraged by the efforts of hundreds of rank-and-file socialist activists, spread to factories and shops throughout the capital. By 25 February, virtually every industrial enterprise in Petrograd had been shut down, together with many commercial and service enterprises.
“Students, white-collar workers and teachers joined the workers in the streets and at public meetings, whilst, in the still-active Duma, liberal and socialist deputies came to realise a potentially-massive problem. They presently denounced the current government even more vehemently and demanded a responsible cabinet of ministers. The Duma, consisting primarily of the bourgeoise, pressed the Tsar to abdicate in order to avert a revolution.
“On the evening of Saturday the 25th, with police having lost control of the situation, Nicholas II, who refused to believe the warnings about the seriousness of these events, sent a fateful telegram to the chief of the Petrograd military district, General Sergei Khabalov: ‘I command you tomorrow to stop the disorders in the capital, which are unacceptable in the difficult time of war with Germany and Austria.’ Most of the soldiers obeyed these orders on the 26th, but mutinies, often led by lower-ranked officers, spread overnight.
“On the morning of the 27th, workers in the streets, many of them now armed, were joined by soldiers, sent in by the government to quell the riots. Many of these soldiers were insurgents, however, and they joined the crowd and fired on the police, in many cases little red ribbons tied to their bayonets. The outnumbered police then proceeded to join the army and civilians in their rampage. Thus, with this near-total disintegration of military power in the capital, effective civil authority collapsed…”
This backdrop set the stage for the November 1917 revolution which brought Lenin and the Communists to power. And quite naturally, the utter chaos was dealt with by the Communist government through several actions—including firing squads, the deportation of people to Soviet labor camps in Siberia, and the call in of gold. Yes, just like other dictators, one of the important acts of the Communists in November 1917 was the confiscation of gold where it was turned over to the state bank of the USSR (per H. Lauterpacht in the International Law Review).
I don’t have any information on the ownership of the USSR state bank under Communism but an educated guess would have to be that it was Rothschild owned/directed. The evidence for this conclusion is simple. The Rothschilds, through their subsidiary and henchmen at Kuhn, Loeb and Company in the US, financed and supported Lenin and the Russian Revelation. It is inconceivable that they would have put millions of dollars into this campaign without gaining control of the money in the new government.
The USA Gold article on hyperinflation noted that so-called “economic crimes” were some of the most serious of all in the old USSR. People committing these acts were subject to the firing squad. Yet, per the USA Gold article, there was a flourishing black market in gold in the old Soviet Union and other Marxist states which still continues today in Russia.
Per an internet study on “Episodes of Hyperinflation,” as published by the Economics Department of San Jose State University, the economic problems in Russia/the USSR in the years 1921 to 1924 saw the former level of inflation reach the hyperinflationary blow off state (other Communist controlled states since 1917 have also had their share of hyperinflation). It is not totally clear to me at this time what steps the Communists took to solve their hyperinflationary problems over the years but it appears that they used firing squads and the deaths of millions to do so (as described above and in comments to follow).
This backdrop leads us to the realization that significant inflation, as happening in both Germany and Russia, paved the way for more serious events which must be described as catastrophic. The following remarks will demonstrate this reality.
From South Africa
A correspondent/reader in South Africa addressed the problems in the old Soviet state and offered his comments by citing Nobel Prize winner Alexander Solzhenitsyn (author of The Gulag Archipelago) and others.
In a speech in Washington in 1975, Solzhenitsyn took note of the death of six million people in the Ukraine in 1932-1933 from starvation and the world never even noticed it. My correspondent added: “Franklin Roosevelt’s ally and associate Joseph Stalin was the supreme dictator of Russia for almost a quarter of a century, from 1929 until his death in 1953.
“Born as Iosif Djugashvili, he adopted the very indicative name 'Stalin', 'man of steel'. He lived up to this name in every respect. Soviet Russia under Stalin was a despotic police state that relied on espionage and terror, with a profound gulf in manner of living between the rulers and the ruled. Stalin's first Five-Year Plan (1928-1932) sought to bring about the 'collectivization of agriculture' in accordance with the 'abolition of property in land' put forward in Karl Marx's Communist Manifesto…
“But back in 1861 Czar Alexander II had liberated 23 million serfs, four years before slavery was abolished in the United States. In the period before the Revolution, millions of these peasants had been enabled to get title to their own individual plots, boosting Russian agricultural productivity. These independent peasant farmers became known as kulaks. When Communism was imposed on Russia, the kulaks as private property owners now stood in the way of the idea of Communism.
“In 1929 Stalin called for 'the liquidation of the kulaks', and their small family farms, animals, implements and crops were declared to belong to the state. ‘Trotsky, Zinoviev and Kamenev had always argued that the peasant would never surrender enough food voluntarily, and must be coerced and, if need be, crushed’ (Paul Johnson A History of the Modern World (1983) p 268). The Red Army and the GPU secret police were used to implement the policy.
“All peasants who resisted were treated with violence. A very large number were killed or sent in cattle or freight trains to exile in remote areas in the frozen north or the desert steppes. Rather than give up their animals to the collective farms, many peasants killed and ate them. As a result, the number of farm animals in the Soviet Union was catastrophically reduced” (cattle decreased from 30.7 million in 1928 to 19.6 million in 1933, sheep and goats from 146.2 million to 50.2 million, hogs from 26 million to 12.1 million, etc).
“The peasants stopped farming on ground that suddenly, officially, no longer belonged to them. As a result, food production decreased drastically. After a while, the cities started running out of food. Orders were given for grain to be confiscated from the peasants, whether they had sufficient for themselves and their families or not. Those caught trying to reserve food for their families were ‘severely dealt with’. By the winter of 1932-3, virtually no food was left in the countryside.
“By early March 1933, 'death on a mass scale really began' (Robert Conquest, The Harvest of Sorrow (1986) p243). The main farming areas of Russia, in the regions of the Ukraine and North Caucasus, were utterly devastated. Millions of people were forced to eat anything that was available, mice, rats, birds, grass, nettles, bark and even cats and dogs, but even then did not survive. It was a time of great and terrible hunger, a catastrophic man-made famine.
“The American journalist Eugene Lyons was sent to Russia in 1928 as chief correspondent for the United Press agency. Arriving as an enthusiastic communist, he was able to experience the Soviet experiment at first hand. He became extremely disillusioned. He described the famine in his book Assignment in Utopia (published in 1937) in the following terms:
“‘Hell broke loose in seventy thousand Russian villages.. A population as large as all of Switzerland's or Denmark's was stripped clean of all their belongings.. They were herded with bayonets at railroad stations, packed indiscriminately into cattle cars and freight cars and dumped weeks later in the lumber regions of the frozen North, the deserts of central Asia, wherever labor was needed, there to live or die..’ The number of people that died is unknown, but the famine alone is estimated conservatively to have been responsible for 6 million deaths, almost half of them children (Conquest, p 303-4). Other millions died from the killings and sickness as a result of the deportations (p 304-7).
“At the famous Yalta conference in 1945, Winston Churchill was able to question his friend and fellow ally Stalin about the process. Stalin said 'ten million' had been 'dealt with', but that it had been 'absolutely necessary'. Churchill records that he 'sustained the strong impression of millions of men and women being blotted out or displaced forever' (Churchill, The Second World War, vol. IV p448). However Churchill – thank God for Winston Churchill - had no further comment to make on the matter. Controlling the agenda is always so important!
"The suffering caused by the great man-made famine was covered by some reports in newspapers in Britain, Europe and the United States. Books dating from before World War Two can still be found in second-hand bookshops which describe the ferocity… Arthur Koestler, Soviet Myth and Reality in The Yogi and the Commissar (1945) Muggeridge, Lyons, Chamberlin… Yet this episode has been completely, entirely, totally ignored by our guardians of history, morality and political correctness…
“According to Solzhenitsyn in the eighty years that preceded the Revolution in Russia, - years of revolutionary activity, uprisings and the assassination of a Czar, an average of ten persons a year were executed. After the Revolution, in 1918 and 1919, according to the figures of the Cheka, the secret police itself - more than a thousand persons were executed per month without trial. In 1937-8, at the height of Stalin's terror, more than 40 000 persons were executed per month. (Solzhenitsyn p17). Millions of persons were executed or sent to labour camps…”
The Bottom Line
The last several issues of the Goldsmiths have now addressed the historical background of hyperinflation, economic dislocations (depressions), gold confiscation and economic, political and social chaos and catastrophe in both Germany and the USSR/Russia. It just seems that all of these issues combine into one theme once serious inflation sets in and turns into something tragic and chaotic.
In the case of the United States, our stupid money policies of the last century have set us up for a catastrophic collapse that will exceed the worst things that happened in Germany or the old Soviet Union states. What one can read and deduce from the above and from the Goldsmiths, Parts 59 and 60, should be enough to alert some readers to the potential for great trouble in the United States in the coming days.
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-- Posted Sunday, 5 April 2009 | Digg This Article
| Source: GoldSeek.com
