Fundamentally transforming the European economy | theTrumpet.com
“Iinflation” has been dominating global news for months now. Most major economies suffer from high inflation rates. The United States, Mexico, Brazil, the United Kingdom and the Eurozone all have rates above 8%. And inflation is blamed for the costs of everything from fuel to heating to food.
In some parts of Europe, “inflation” is a particularly crude word that brings back painful memories.
We are approaching the 100th anniversary of the hyperinflation crisis in Germany. After losing the world war I, Berlin was desperate to keep its economy afloat while making repairs abroad. He didn’t have much money to spend; the war effort had sucked the economy dry. So the government chose to print money. This caused a crisis of hyperinflation which peaked at the end of 1923. In January of that year, a loaf of bread cost 250 German marks; in november it costs 200,000 million marks. It’s a 2 with 11 zeros after that.
Money became so useless that people used banknotes to paper their homes or to burn in their stoves instead of wood. One of my history teachers gave the following analogy for the crisis: Imagine that you are a young person about to board the train from Berlin to Heidelberg (a prestigious university town) to go to university. Before boarding the train, you have enough money to cover tuition, accommodation, food, everything. By the time you arrive you don’t have enough to pay for the train ticket.
British economist John Maynard Keynes said in 1919:
[Vladimir] Lenin is said to have said that the best way to destroy the capitalist system was to poach money…. [He] was certainly right. There is no more subtle and surer way to overthrow the existing foundations of society than to poach money. The process engages all the hidden forces of economic law on the side of destruction, and does so in a way that not one man in a million is able to diagnose.
The inflation didn’t last too long. On November 15, 1923, the German central bank introduced a new currency, the Rentenmark. He also stopped monetizing Berlin’s debt. These two measures stopped the crisis and launched the process of monetary normalization. The rest of the 1920s was an economic boom for Germany, as it was for the rest of the Western world.
Germany’s hyperinflation crisis is a major event in most modern history textbooks. Not because of how he solved his economic problems, but because historians now see it as a harbinger of ominous times. Just days before the introduction of the new currency in 1923, on November 8, Adolf Hitler staged his infamous Beer Hall Putsch, where he attempted to take control of the Bavarian government. This was one of the main springboards for his rise to power.
Hitler’s Nazis would not gain power in Germany for another decade. But when they did, they did so against the backdrop of economic collapse. The Great Depression hit Germany particularly hard. The Nazis rose to popularity with the promise of fundamentally transforming German society from a failing system into a strong one.
The hyperinflation of the early 1920s showed how shaky the German economy was. One of the only reasons he was able to tread water economically was the American loans under the Dawes Plan, under which the United States lent money to Germany to pay for reparations to Britain and France. When American money dried up with the stock market crash of 1929, Germany sank. And the nation was ready to listen to a demagogue who promised freedom from its economic shackles.
This makes the inflation hitting Europe today all the more worrying.
Since the start of the coronavirus crisis in 2020, governments around the world have spent money they don’t have to sustain their economy. The United States has spent more than $5 trillion on coronavirus lockdown recovery packages. During 2020 and 2021, Germany spent the equivalent of around 10% of its gross domestic product on resuming the lockdown. France spent about 15% of its gdp public guarantees in 2020. In Austria, a 2021 financial stimulus program caused a deficit of more than 8% of gdp. Italy, whose debt togdp the ratio was around 150% last yearannounced a program in 2020 for unlock an amount worth almost 50 percent of his gdp liquid assets for coronavirus recovery.
During Germany’s hyperinflation crisis of the 1920s, America was there to bail out Berlin. This is no longer the case. The American economy—with its debt of more than 30 trillion dollars– is even more fragile than that of Europe.
Spiegel International published an article on September 22 titled “Germany on the brink.” He describes the general mood of many Germans regarding their economic future:
That the German economy sinks into recession this winter is no longer really a question. And there is growing evidence that it could become particularly serious – with a 10-fold increase in the price of electricity on the stock exchange, numerous corporate bankruptcies and a lastingly damaged economy. Losses in prosperity, according to economist Michael Fratzscher, will be permanent. Germany, according to forecasts, is in decline. …
This is uncharted territory for Germany. After nearly two golden decades of rising incomes, stable economic growth and reduced unemployment, a difficult decade lies ahead. At least for those who are unhappy with paying up to €1,000 more per month for gas and electricity, €3 for butter and a purchase price of €1m for a two-bedroom apartment . In other words, everyone except the richest 10% in the country.
In a country generally characterized by economic and political prosperity, these are unusual times. Germany is the richest and most populous country in the European Union. Its chancellor is often seen as the unofficial leader of the bloc. Whether Germany of all countries is in difficulty, then the circumstances are serious for all of Europe.
With inflation out of sight, where will Europe turn? What happens when circumstances worsen? What happens when recession turns into depression?
Spiegel keep on going:
This is a dangerous situation, and not only from an economic point of view. Thousands of people have taken to the streets to protest in the cities of Leipzig, Magdeburg and Pforzheim in recent weeks, and this may just be the start. Politicians on all sides are warning of the possibility of a “hot autumn”, some of a winter of rage, referring to possible protests and unrest. The German domestic intelligence agency, the Federal Office for the Protection of the Constitution, which is responsible for monitoring extremism, has set up a task force to investigate the materialization of a movement.
The fears are justified. People who feel left behind tend to gravitate towards the political fringes. Injustice, even if it is only perceived injustice, fosters populism and extremism.
Much of Europe is already turning to “populism and extremism”. Italy concluded its legislative elections on 25th September. The Brothers of Italy, successors to the fascist party of Benito Mussolini, won the most seats. In the Swedish parliamentary elections earlier this month, Sweden’s far-right Democrats won the second most seats. Inflation is not the only reason people are attracted to these types of parties, but economic mismanagement helps to delegitimize status quo parties in favor of more radical alternatives.
Europe’s current economic woes are not yet at the level of the Great Depression. But like the hyperinflation of 1923, they are a good sign that much worse times are ahead.
Germany’s solution was previously to turn to a strongman. If historical parallels mean anything, the current situation suggests another is to come.
The Trumpet has been watching the rise of a European strongman for decades. We are watching this development because of Bible prophecy. Revelation 13 and 17 prophesy that a strong European empire in the spirit of ancient Rome will come into play just before the second coming of Jesus Christ. (Please ask for our free booklet Germany and the Holy Roman Empire for more information.)
Daniel 8:23 speaks of this empire ruled by “a king with a fierce countenance and understanding of dark phrases”, or “one who understands riddles” (Revised Standard Version). Verse 24 speaks of him having “mighty” power. Verse 25 states that he “shall destroy many.” He will be in the mold of his predecessor, Adolf Hitler.
This man has not appeared yet. But the circumstances that brought Hitler to power are taking hold again in Europe, particularly in Germany. People will soon be looking for someone…anybody– to deliver them. The Bible prophesies that when this man comes he will shake the world.
To learn more, request a free copy of Germany and the Holy Roman Empire. Also read our Trends article “Why the Trumpet Watch the rise of a German strongman.
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