Making a mark

As a child, Malcolm added those extraordinary stamps to his small collection. They're still in his attic. Somewhere.

The over-prints told the story of the collapse of the German currency in the early 1920s. Then there are those photographs of shoppers with barrowloads of notes, hoping to buy a sausage.

Just like Zimbabwe today.

What stopped the rot?

Inevitably, since we are talking high finance here, it was a masterly piece of legerdemain. A "notional" currency was invented: the Rentenmark, nominally based on the value of the land of Germany. It was based on the assumption that 4.2 Rentenmarks were worth one US dollar. And the people of Germany, desperate for a quick fix, believed it. And so a new stability was almost constructed.

That was 1924.

Flash forward to 2009, and to the marvellous, magnificent Robert Peston's blog:

... the overnight announcement on the bailout of B[ank] of A[merica] would have been viewed as the stuff of public-finance nightmares a year ago. Today, it's almost par for the course that US taxpayers are injecting $20bn of new capital into the bank and promising to absorb most of the future losses on $118bn of radioactive investments.

Those financial commitments are peanuts of course in the context of $14,000 bn-and-rising of financial support that taxpayers have provided to banks all over the world. What's gone wrong with our banks is without historical precedent - but then, you knew that.

Actually, young Robert, -- gulp -- I hadn't kept count.

But, "without historical precedent"?
No: it's merely a case of convincing us plebs to believe. Sphere: Related Content