Weimar Formula- Currency Plunged, Stock Market Skyrocketing

1919-1921 Weimar Germany # Bank interest rate - still 5% # German stock market at 97 in January 1919, 166 in January 1920, 278 in January 1921 and 731 in December 1921. # The general price level has doubled since 1914. # Most of the rest of the world allows their money supplies to contract as a "war withdrawal" effect, and goes into recession or depression (general prices fell 16% in the U.S. in 1921). Germany keeps creating or printing money, and the government deficits continue to increase. # Newspapers and many financial folk are very confused by the continual price increases. Its blamed somewhat on the Versailles Treaty and France but mostly on speculators and "foreigners" inside Germany (an ominous sign and similarity to what's ahead with Hitler and the Holocaust, etc.). # In other countries, its blamed on the German government deficit. But the real problem is that too much money is being created by the German banks. The key point is, when Fed stop cutting or raise interest rates, the equity market will go to the sky, per this Weimar model. ....