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Fed Distorts History, Blames Coronavirus for Magic Money Printing Policies

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Along with being the gatekeeper of the monetary system, the Federal Reserve has dipped its toe into the waters of historical revision. Kristian Blickle, a New York Fed economist and columnist, suggested the Spanish Flu of 1918 gave rise to extremism and drove citizens to vote for Adolf Hitler, thus, ushering in Nazism and all of its associated horrors.

The problem with Blickle’s report is one of timing, proportion, contrast, and comparison. For instance, and in reference to Hitler becoming chancellor of Germany in 1933, Blickle states:

“influenza deaths themselves had a strong effect on the share of votes won by extremists, specifically the extremist national socialist party.” 

Thomas Weber, professor of history and international affairs at the University of Aberdeen and author of “Hitler’s First War” and “Hitler: The Making of a Nazi” said in an interview with Harretz.com:

“When you look at the evidence, there is no causal link” between the pandemic and political extremism, and “there is nothing to show that the trauma of the pandemic had anything to do with it.”

Thomas Weber rightly points out that the massive death toll, crushing economic aftermath associated with the Treaty of Versailles, and the failure of the Weimar Republic were the catalysts that drove political transformation resulting in the ascendancy of Adolf Hitler and Nazism.

Kristian Blickle wrote that Spanish flu deaths “spurred resentment of foreigners among the survivors,” which, over time, led to increased support for racist and xenophobic parties. This claim is not supported by the historical record.  In fact, neither Hitler nor Joseph Goebbels assigned blame to the Jews for the flu pandemic in Germany or use it in anti-Semitic propaganda. Thomas Weber points out that during medieval times, plagues such as the Black death did spur antisemitism in Europe, but after 1800 that link was less far less common. With regard to the Spanish Flu, he says, “no one in postwar Germany blamed the Jews for the outbreak.”

The most questionable claim in Blickle’s Federal Reserve retrospective is that Spanish flu deaths “reshaped demographics” by reducing populations in Germany’s cities, which led to anemic spending on citizens, thus, driving people into the arms of extremist parties and subsequent support of Hitler’s Chancellorship. Thomas Weber responded, “Overall, it was the death of over 1.7 million Germans in the Great War that radically reshaped the demography of German cities,” not the country’s 287,000 victims of the Spanish Flu.” 

It’s clear that Kristian Blickle is ignoring the real events that led to Hitler’s support in Germany, which had everything to do with unemployment rising from 1.4 million to 6.1 million between 1929 and 1933 and Hitler winning favor by promising to usher in a new monetary system that would unshackle the German people from financial hardships the treaty of Versailles had imposed upon them. Financial challenges were greatly magnified in 1929 by the Great Depression, which caused allies to call-in loans made to Germany for rebuilding.

It’s curious and revealing that Blickle, writing for the Federal Reserve, attempts to tie the German fiscal policy of excessive money printing to the ravages of the Spanish Flu instead of the burdensome payment of war reparations under the treaty of Versailles, which a preponderance of historians agree upon. It should not be lost on the observer that the Federal Reserve has just completed the single largest fiscal stimulus the world has ever seen 2.1 trillion, much of it paid for by buying U.S. Treasuries and other securities, then replacing them with credit. In effect, it’s creating money out of thin air, or “printing.”  This comes on the back of the three rounds of Quantitative easing between 2009 and 2014.  Prior to the 2009 recession, the Fed held about 700 billion in Treasury notes on its balance sheet. By 2014 that number exploded to 4.5 trillion.

It appears the Federal Reserve, through the pen of Kristian Blickle, is preemptively blaming a future scenario of hyperinflation on the Coronavirus instead of its own dangerous practice of excessive money printing (currency debasement) over the course of a decade.

 RWR original article syndication source.

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Bekah Lyons
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History is destined to repeat itself?