DR Exclusive: The Obama Memos (2 of 3)

[Editor’s note: In a series of three memos to President Barack Obama, Sioan Bethel recommends that real US assets be used to amortize or repurchase the US national debt.]


To:  President Barack Obama

From:  Sioan Stephen Bethel

Subject:  The German Rentenmark, issued in 1924, is a persuasive precedent for a multi-trillion dollar issue of American public land based representative money, in order to, amortize or repurchase relevant portions of the U.S. National Debt and fund or reimburse funding for bailouts and stimulus aid.

After the apogee of hyperinflation in 1922, the Weimar Republic of Germany established a new currency, the Rentenmark, backed by the country’s major agrarian and industrial assets and issued by a new bank, the Rentenbank. The new currency with a fixed parity to the dollar, immediately halted hyperinflation and placed Germany on a stable financial footing.

In the words of one critical observer, the forensic economist, Robert Rene Kuczynski, “the most important and the most characteristic element to German stabilization was the Rentenmark miracle, a monetary innovation without parallel in monetary history.”

Rentenmark History & Instrumentality

In 1924, several representatives of Germany’s major agriculture, commercial and industrial interests became subscribers to a new bank of issue, the Rentenbank. The subscription was made in paper marks (papiermarks). The participation of each group of subscribers in the new bank was proportional to their respective wealth or property and a mortgage on this wealth served as a guaranty against the failure of the new institution. The Rentenmark was originally to be indexed to the commodity of rye like several previous types of private and semi-official, commodity backed currencies utilized successfully during the period of hyperinflation [Attachment]. After a Cabinet change, however, the Rentenmark was indexed to gold, which was adjudged to be a superior price index. The Rentenmark also had a fixed parity with the dollar. The advance of dollarization was significant because it meant that the fix of the exchange rate ceased hyperinflation instantaneously. Again, the Rentenmarks “real” backing was the mortgaged property of Rentenbank subscribers. With a fractional reserve the Rentenmark was not convertible or redeemable for mortgaged property; a characteristic of interest to bullionists and their current day monetarist successors [Attachment].



The Rentenmark representative currency was an unmitigated success in placing Germany on a sound financial footing and eliminating hyperinflation in 1924. The French church-land backed assignat representative currency, issued in 1790, was equally successful, in the first instance, in significantly reducing Frances’s multi-trillion dollar, actually livres, debt before over-issues and commingling with the general currency led to hyperinflation. With the benefit of hindsight and certain adjustments an American public land based representative currency can succeed.

Unlike the Rentenmark, American public land based representative money would not commingle with the general fiat currency of Federal Reserve Notes. Second, the U.S. representative money would enjoy a single issue for the sole purpose of amortizing or repurchasing relevant portions of the U.S. National Debt, and fund or reimburse funds for bailouts and stimulus packages. In the case of repurchasing the U.S. debt, thereby converting national debt interest payments into disposable income, the new income stream can be used to; a) supplement tax revenues: b) tax reduction; c) public investment; d) national debt reduction; e) universal healthcare; f) bolster social security; g) all of the above.

The updated and critical instrumentality of public land based representative money is a monetary innovation suitable for consideration by this nation at this time.

An improved past is prologue.

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