Re: Income tax and employment

["Forstater, Mathew" <ForstaterM@xxxxxxxx>]

According to A. Lowe (who, Nell writes in the New Palgrave, "was largely responsible for the planning and management of the currency reforms that brought the great hyper-inflation to an end") the Rentenmark was "backed by a general mortgage on the industrial and agricultural property of the country" (1935, p. 19).  Lowe believed it to be a case in which the success of policy depended on a co-operation of economic and non-economic (sociological and psychological) factors.  (Adolph Lowe, Economics and Sociology, 1935).

-----Original Message-----
From: Esteban Perez [mailto:eperez@xxxxxxxxxxxx]
Sent: Tuesday, May 07, 2002 3:37 PM
To: pkt@xxxxxxxxxxxxxxxx; rosserjb@xxxxxxx; has27@xxxxxxxxx
Subject: Re: Income tax and employment

The Rentemark was in fact introduced on Nov. 15 1923. That is towards the end of the hyper. It was the result of different proposals by Helfferich, Hilferding, Luther, and perhaps Schacht who received the credit for its success. It was supposed to be backed by productive assets (if I remember correctly) not just land. Luther who passed the Rentemark law on October 27 treated the rentemark as "a medium of exchange that would be accepted by law in all offices handling money in the Reich".

"The new appellations 'rentebank'  and 'rentemark' also had a happy psychological advantage, since they not only reflected the fact that new money was based on annuities paid on the mortgage of the assets of the productive classes but also conjured up memories of the highly successful  19th century Rentebriefe which were state guaranteed bonds issues after the emnacipation of the peasants on which the redempetion of peasant holdings was paid to the landlords". Feldman. The Great Disorder. p. 752-753.
―-------------------------------------------------------------------------------------------
>>> "J. Barkley Rosser, Jr." <rosserjb@xxxxxxx> 05/07/02 03:05pm >>>
     Well, actually the German rentenmark was in
principle backed by land, as its name indicates.
But, this did not work out too well once the hyperinflation
really got going.
Barkley Rosser
----- Original Message -----
From: "Henry Schappach" <has27@xxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Monday, May 06, 2002 3:26 PM
Subject: Re: Income tax and employment


> Fiat currency by definition is "currency backed by the full faith and
> credit of the _____________ government". One may insert the name of any
> country or government since fiat currency is not redeemable for gold or
> silver or anything of any intrinisic value.
>
> One of the most famous photographs of the 20th. century shows a German
> peasant pushing a wheelbarrow that contains a huge mound of fiat
> deutschmarks. The peasant is pushing the wheelbarrow to a bakery to
> exchange the heaped amount of fiat deutschmarks for one (1) loaf of
> bread. This famous photo was taken a few years after World War 1.
>
> What happens today or tomorrow when the peoples of any country lose
> faith in "the full faith and credit of any country's fiat currency?"
>
> Idealism is wonderful and I would dearly love to embrace a philosophy
> where no one goes hungry or is in want or need. But we live in a
> realistic and not an idealistic world and the "full faith and credit of
> any country in fiat money" can reach a point where the peoples of any
> country (and those who believe in globalization) can be strained to the
> point where there is no longer credibility in the fiat money of any one
> or more nations.
>
> I don't like doom and gloom scenarios but feel there is a need  to
> address "realism". I do not have the ability to address the question(s)
> but would like someone with much better economic credentials to do so.
>
> Henry A. Schappach
>
>