Cover of MoneyWeek magazine issue no 500

Keep your cool

20 August 2010 / Issue 500

The case for optimism


  • UK inflation could hit 15%
  • Buy this bargain wind-power play now
  • Don't fall for these investment myths


Lessons from Weimar

I had dinner with Adam Fergusson, author of When Money Dies: The Nightmare of the Weimar Hyperinflation, this week. We reviewed the book in the magazine a few weeks ago. For those who haven’t yet rushed out to buy the book, it’s a fascinating account of the way utterly uncontrolled inflation turned Germany from a relatively sophisticated capitalist nation into the sort of barter economy that had its middle classes trading pianos for potatoes.

Adam is a slightly bemused man. He wrote the book in the 1970s. When he started it, UK inflation was around 13%. By the time he was half way through, it had flown past 20%, which explains why the book sold as well as it did when it was published. However, after Margaret Thatcher and Geoffrey Howe (to whom Fergusson was an adviser) tackled inflation in the 1980s, he rather lost interest in the book, as did everyone else.

So it came as some surprise to him a few years ago to find it, now long out of print, changing hands in the US for $1,800 as investors and politicians tried to figure out what would happen if they found themselves addicted to quantitative easing (QE), the modern bankers’ version of printing money. The republished edition has become something of a best-seller (although the rise in supply has pushed the price down to under a tenner).

I asked Adam the question he must hear all the time: can it ever happen here? He says absolutely not…

• Read the full editor’s letter here:
Lessons from Weimar