Comments by "Alan Pennie" (@alanpennie8013) on "How did Schacht's MEFO Bills work? Were they inflationary or not?" video.

  1. It was something weirder, a quasi - government bill whose redemption could be indefinitely extended.
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  2. There was the same problem with food as people ate out less.
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  3. It was an effect a treasury bill but with the unusual quirk that after its original redemption date (180 days) it could be indefinitely extended in 90 day instalments. This is all from Wikipedia so it may not be quite accurate.
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  4. A very clear explanation. It appears that MEFO bills were converted into state debt in 1939.
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  5. Certainly. That's why Schacht wanted the bills to be saved and not redeemed.
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  6. Pity. I have looked and there don't appear to be any representations of MEFO bills online
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  7.  @simplicius11  I think you're wrong there. You could trade them, but people preferred to keep them because the rate of interest was good (for a depression).
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  8.  @simplicius11  Agree to disagree. I would like to see a fuller account than those currently available online.
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  9. Effectively. But off - book I think because issued by a private corporation.
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  10.  @Zveebo  I agree. The effect of increased money supply in the recent past has been asset inflation, and I see no reason why this should not continue indefinitely.
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  11. Yep. The element of discounting (which made them worth only 96% of their face value) meant they weren't quite cash.
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  12.  @billbolton  You can't beat real estate. I do think there will be more house building in future but I doubt this will cause any fall in prices.
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  13.  @johnweatherby8718  Wikipedia reckons that the main reason to use a quasi - private corporation instead of issuing normal treasury bills was to conceal the extent of rearmament. A secondary effect would be to conceal the true government deficit. I'm not sure how important this was though. I don't think there was any foreign investment in Germany then because it was impossible to get the money out again.
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  14. It actually happened in Italy in the 1970s, and people created their own money for small day to day transactions.
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