'The Death of Paper Money'?

Interesting article in the London Telegraph this week titled 'The Death of Paper Money'.

Apparently there is growing interest in a long out-of-print book called 'Dying of Money: Lessons of the Great German and American Inflations' by Jens Parsson.

According to the article, Ebay has a copy available for a starting bid of $699. Amazon has a copy of the book for $234.

The Telegraph article focuses on Chapter 17 of the book which is entitled "Velocity". That chapter says that each big inflation - whether the early 1920s in Germany, or the Korean and Vietnam wars in the US - starts with a passive expansion of the quantity of money. This sits inert for a surprisingly long time. Asset prices may go up, but latent price inflation is disguised. The effect is much like lighter fuel on a camp fire before the match is struck.

The book vividly and thoroughly recounts the influence of inflation throughout history with special emphasis on the U.S. economy and the hyperinflationary events of the 1920s in the Weimar Republic, Germany.

In the Telegraph article, the writer (Ambrose Evans-Pritchard) notes that the book is suddenly in high demand amongst elite banking circles, particularly with QE2 immanently pending.

If you are interested, you can read the entire book here on Scribd.

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