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134962Update for August 14, 2014 - Newsletter (Molotov-Ribbentrop Part 2 -4)

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  • Gerry Agnew
    Aug 13, 2014
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      Is peace therefore not what the US wants overall, and in the Ukraine specifically? There are many thoughts over this and they basically oscillate around the idea that the US economy is close to being fundamentally wrecked and needs the sort of shot-in-the-arm which could well be seen in a warlike scenario. In considering the days of Molotov-Ribbentrop in 1939, we see that despite all of FDR’s attempts to resuscitate the American economy, unemployment stayed stubbornly high. In looking at old German unemployment numbers we see just the reverse. In January 1933, Hitler achieved power in Germany. The first job (after securing his hold on Germany) was to to get the level of unemployment down to less dangerous levels. From a high of something like 34% in February 1932, it stayed at relatively high levels, despite enormous efforts via make-work projects and the like to reduce it.

       

      Finally, Hitler decided to go for broke and gave his economy ministers the orders to “prepare for war within four years”. This was in 1936. The German Reichsbank started to print money to finance all of this and the economy caught hold (anybody from The Fed reading this??). With conscription at various levels and companies churning out war materiel of all descriptions, unemployment finally fell to a low of 0.75% in November 1938. In the late 1930s it was difficult to find Germans for skilled factory work and we saw unemployment stay at about 1% by the outbreak of the war. This did not pass unnoticed and today I still do not believe that the economic lessons from the Third Reich have been consigned to the history books. With U.S. real unemployment levels probably in the 22-25% range (shadowstats.com) and up to 70 million Americans having nothing to do with their lives besides line up for food stamps and play video games, something has to be done. Interest rates across most of the world are at zero or slightly below (which I saw with 1-5 month US Treasury yields recently), which should spark all sorts of economic revival according to standard economic theory. It isn’t.

       

      I have heard theories expounded that the only way the US (in a global economy, which would preclude re-establishing trade barriers and the like) can “get it going” is via war expenditures. Hitler, in the middle of 1939, was the equivalent of all dressed up and nowhere to go, militarily. He was armed to the teeth and had nowhere to use this force unless he could get Stalin to retire to the sidelines. We thus saw “Give Stalin what he wants” at the outset of the Molotov-Ribbentrop talks. In 1938, we saw, with only a few days to spare, war in Europe averted as the Sudetenland was surrendered to Germany so that the three million Germans living there could be reunited with their ancestral homeland. Prime Minister Neville Chamberlain returned home with his infamous “Peace in Our Time”, waving the scrap of paper which sundered Czechoslovakia. The small state was sacrificed so that peace would reign in Europe. Today sees the small state of Crimea taken away from the Ukraine (today’s equivalent to the Austrian Anschluss of 1938 and the huge victory of the Austrian Nazis at the polls?) and the ethnic Russian areas of the Eastern Ukraine tossed to the winds for a new version of “Peace in Our Time”. Things do not change very much do they?

       

      Hitler wanted war to fulfill his lebensraum promises to the German people. He prepared for it and saw an economic boom result which lowered unemployment to virtually zero. Washington, near a collapse according to many authorities, would dearly love to see history repeat itself and may very well be hoping and praying that it can rally the people around its leaders to prepare for such a publicly supported economic armament programme, with a similar result for the unemployed armies of Americans. All Hitler had to do was to get Stalin to stay quiet and concentrate on domestic issues and residual flare ups with Japan along the Soviet/Mongolian/Manchukuoborders which would give him a free hand in Europe. He got his way with this via Molotov-Ribbentrop. So, the question is what happens in Europe now with “Pact 2”? We shall find out, but my honest belief is that it will still be in the Far East where the War Cycle for 2014 will play out.

       

      I must acknowledge the excellent book “Hitler’s Economy – Nazi Work Creation Programs, 1933-1936” by Dan P. Silverman (1998) for much of the economic data presented in this newsletter.

       

      Listen and watch is my advice to my readers. It may save you a lot of grief as the U.S. economy continues to grind towards its demise.

       

      Tomorrow, I wish to start a fresh piece on an old theme; Korean reunification (having just mentioned the far East and the 2014 War Cycle). I have seen a couple of things I wish to pass along which may be of interest.

      Gerry

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