“Recent monetary experience, in Germany and elsewhere, show that the theories of some economists on the influence of speculation are too optimistic. According to economists, speculators foreseeing the future variations of exchanges and anticipating them with their transactions, lessen the fluctuations themselves. But this theoretical conception often does not correspond to reality. Speculation has continually produced enormous fluctuations in the exchange rates of the German mark…On November 29th, 1921, the dollar was quoted at 276 marks; on December 1st it fell sharply, to 190…Towards the middle of August 1923 the dollar rose giddily to 1, 2, 3, and 5 million marks; later falling suddenly to 3 millions. These examples, which could be multiplied, show that speculation did not exercise a stabilizing influence on the exchanges, but had rather the opposite effect.”
- Constantino Bresciani-Turroni, ‘The Economics of Inflation’, 1931
Great book with lessons on why we sometimes need higher taxes, higher interest rates, and more control over speculation. But CNBC will never learn this.
