Some of you may remember learning about the Weimar Republic with its hyperinflation in the early 1920s. To make a long story short, Germany printed a whole bunch of money to pay France and Britain for the war guilt, according to the Versailles Peace Treaty of 1919.The rationale for printing more and more fiat currency was simple. Not printing meant default. Printing meant meeting financial obligations and avoiding more of Germany’s assets seized by France. Whatever happened to the value of Germany’s currency didn’t really matter although what happened was hyperinflation.The law of supply and demand is simple, too. The more currency America prints (or creates digitally), the less value it holds. Paying just the interest on America’s national debt costs the United States one trillion dollars a year (as of 2024). Not enough dollars to pay America’s creditors? Print more. What can go wrong?The world meanwhile is watching.
