White Papers | 15 February 2013

Hyperinflations, Hysteria, and False Memories

Executive Summary

In this paper I’d like to turn to a subject that has long fascinated me: hyperinflations. My interest in hyperinflations stems not from my background as an economist, but rather from a small collection of bank notes that my father gave to me. (A peculiar benefit of his smoking habit – bank notes were used as an incentive to purchase cigarettes.) Included in this collection is a one million mark note from the Weimar Republic; it is this note that is responsible for my interest in hyperinflations. To this day I collect bank notes from hyperinflations. The notes shown in the body of this paper come from my collection and serve as decorative reminders of important historical hyperinflations.

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Disclaimer: The views expressed are the views of Mr. Montier through the period ending February 15, 2013 and are subject to change at any time based on market and other conditions. This is not an offer or solicitation for the purchase or sale of any security. The article may contain some forward looking statements. There can be no guarantee that any forward looking statement will be realized. GMO undertakes no obligation to publicly update forward looking tatements, whether as a result of new information, future events or otherwise. Statements concerning financial market trends are based on current market conditions, which will fluctuate. References to securities and/or issuers are for illustrative purposes only. References made to securities or issuers are not representative of all of the securities purchased, sold or recommended for advisory clients, and it should not be assumed that the investment in the securities was or will be profitable. There is no guarantee that these investment strategies will work under all market conditions, and each investor should evaluate the suitability of their investments for the long term, especially during periods of downturns in the markets
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