The Specter of Hyperinflation: Remarque’s “The Black Obelisk”

Erich Maria Remarque, author of All Quiet on the Western Front, produced a novel in 1956 called The Black Obelisk about the nightmarish hyperinflation that battered the German mark in the early 1920’s and led to the rise of fascism.  Germany’s experience during the troubled Weimar era, as detailed by Remarque, offers a frightening glimpse of what might well happen to this country in the years ahead.

Remarque’s novel describes a population that races breathlessly from Monday through Saturday to keep pace with inflation: “There’s no new dollar quotation Saturday afternoons.  From noon [Saturday] till Monday morning our currency is stable.”  (Note the importance of the “dollar quotation”.  Already the US dollar had become the international currency of exchange.)

This is a world where those ruined by hyperinflation are “the people who have property they are forced to sell, small shopkeepers, day laborers, people with small incomes who see their bank accounts melting away, and government officials and employees who have to survive on salaries that no longer allow them to buy so much as a new pair of shoes.  The ones who profit are the exchange kings, the profiteers, the foreigners who buy what they like with a few dollars, krone, or zlotys, and the big entrepreneurs and manufacturers, and the speculators on the exchange whose property and stocks increase without limit”.

Remarque’s protagonist Ludwig Bodmer is an embittered veteran of the trenches who resides in the fictional town of Werdenbrück, where he plays the piano for amusement and the organ for a local church and earns his living selling headstones for Heinrich Kroll and Sons, Funeral Monuments.  He categorizes the firm’s inventory as follows: “cheap little headstones of sandstone and poured concrete with narrow pointed socles, for the poor, who live and slave in honesty and naturally get nowhere.  . . . Next come the monuments of sandstone with inset plaques of marble, gray syenite, or black Swedish granite . . .  for small businessmen, foremen, artisans who own their own businesses . . . ”  Then come the larger polished monuments for “the more prosperous middle classes, the employer, the businessman, the larger store owner, and of course that diligent bird of ill omen, the higher official . . .” and finally there are elegant showpieces for “rich farmers, property owners, profiteers, and clever business people who deal in long-term promissory notes and so live on the Reichsbank, which keeps paying for everything with constantly replenished and unsupported paper currency”.  Spouses and relatives of suicides are also frequent customers.

Remarque occasionally gleans humor from this soul-crushing predicament.  Georg Kroll, Ludwig’s boss, “meticulously lights a cigar worth five thousand marks” and “blows three hundred marks’ worth of smoke in my eyes”.

Ludwig’s friend Willy is a profiteer who drives a fancy red sports car and lives in a spacious apartment.  Ludwig himself lives from day to day.  He loses his current girlfriend Erna to a profiteer but soon finds another named Gerda.  Relationships, as with every other aspect of life, accelerate to keep pace with inflation.

Ultimately the Weimar Republic settles the bulk of its foreign debt (punitively imposed by the Treaty of Versailles) and establishes a new currency based on available commodities.  This action renders all existing bills worthless.  Willy, Ludwig’s profiteer friend, sells his fancy red car and moves to a smaller apartment that he wallpapers with unsalable marks.  Unfortunately, the general population hoards the new currency and abstains from making purchases, which leads to an equally catastrophic bout of deflation.  (Former Chairman of the Federal Reserve “Helicopter Ben” Bernanke so feared the prospect of deflation that he once claimed he’d drop cash from a helicopter to encourage consumer spending.)

The specter of hyperinflation now looms over the US: Monday, March 26, 2018 China launched the Shanghai International Energy Exchange  (ShFE), where oil can be traded for yuan (renminbi) instead of dollars.  Global financial observers consider the establishment of the Chinese exchange an earthshaking event.  In an article published by Reuters the day ShFE opened, Kate Duguid quotes Hayden Briscoe of UBS Asset Management: “This is the single biggest change in capital markets, maybe of all time”.  Juan Cole, in an essay dated March 27, 2018, says opening the ShFE will “start the reverse snowball down the hill, with the dollar falling against other currencies, causing high inflation for US consumers of imported goods, and the Congressional addiction to big budget deficits (Trump just added a $1.5 trillion deficit to give tax breaks to his billionaire cronies) coming home to roost”.  Kate Duguid agrees, holding that the new exchange “challenges the petro-dollar system, in which oil deals are executed in dollars. This would decrease demand for the greenback and boost U.S. inflation”.

The Obama administration effectively weaponized the dollar, using its position as reserve currency as a blunt instrument to bring Iran to the table when negotiating an end to its nuclear program.  But according to Juan Cole: “Under China’s new exchange, this tool of US dominance will be substantially blunted. Countries that wanted to buck the US on Iran oil purchases could just go to Shanghai. I said at the time that using the position of the dollar as the world reserve currency in what was basically economic warfare on Iran would certainly cause China, Russia and other powers to attempt to sidestep the dollar. That now appears to be happening”.

The notorious top one percent share much of the blame for our economic predicament.  Juan Cole again: “. . . the Reagan-to-Trump tax scam, whereby taxes are slashed on the rich and vast inequalities are promoted in American society, aiming at the creation of a new aristocracy, has depended on the dollar’s position as a reserve currency. Ordinarily, cutting taxes on the people with the money to pay them and then running consistent big deficits would cause inflation and would vastly weaken a currency against other currencies. But the Washington elite has skated by essentially offloading the costs onto international holders of dollars”.  Once the dollar loses value, the market for US Treasury notes evaporates.  No one wants to get stuck with worthless paper.

This is not the only challenge to the US economy.  On March 8, 2018, 11 countries—including China and Japan—signed an amended version of the TPP (Trans Pacific Partnership) trade agreement.  The United States was excluded.  Our exclusion resulted from the Trump administration’s belligerence.  When he first took office, Trump unilaterally withdrew the United States from an earlier version of the agreement because it didn’t put “America first”.  Trump also imposed tariffs on steel and aluminum imports, further undermining our economic status internationally.

And for years Brazilian journalist Pepe Escobar has been charting the progress of China’s One Belt, One Road system, also known as The New Silk Roads, a project initially inspired by Russian President Vladimir Putin’s vision of an economic community stretching from Lisbon to Vladivostok.  In an October 7, 2016 RT article titled Why The New Silk Roads Terrify Washington, Escobar relates how China took Putin’s concept a step further: “Three years ago, in Kazakhstan and then Indonesia, President Xi Jinping expanded on Putin’s vision . . . enhancing the geoeconomic integration of Asia-Pacific via a vast network of highways, high-speed rail, pipelines, ports and fiber-optic cables”.

In his article, Escobar describes One Belt, One Road (OBOR) as “an even more ambitious version of Eurasia integration, benefiting two-thirds of the world population, economy and trade. The difference is that it now comes with immense financial muscle backing it up, via a Silk Road Fund, the Asian Infrastructure Investment Bank (AIIB), the BRICS’s New Development Bank (NDB), and an all-out commercial offensive all across Eurasia, and the official entry of the yuan in the IMF’s Special Drawing Rights; that is, the christening of the yuan as a key currency worth holding by every single emerging market central bank”.

China’s economy is larger than ours and it has now effectively neutered the petro-dollar, and by creating a massive and harmonious Eurasian economic system will be in position to establish the yuan as the new reserve currency—supplanting the US dollar.  When—not if—this happens, US currency will lose much of its current value as central banks the world over shed their suddenly worthless greenbacks.  Bear in mind, the US is already the world’s largest debtor nation.  Once the dollar loses traction, we will have nothing but bad paper to offer our creditors.  The result will be hyperinflation likely followed, once it has been stabilized, by an equally ruinous bout of deflation.  Other than arms, the US produces next to nothing.  What happens to a nation of consumers when their currency loses its value?  Remarque’s novel offers a bleak, harrowing look at the possible consequences.

But there is much more to be contemplated in The Black Obelisk.  Remarque also examines the rise of fascism in Germany.  In early Weimar, as he describes it, the principal malefactors are not Nazi brownshirts but nationalists, first encountered in the novel at a beer hall, where they demand that patrons stand for the national anthem.  Ludwig tells us: “The purpose of these good-for-nothings is to start a row.  They keep ordering the national anthem, and each time a number of people do not get up because it seems so silly.  Then with blazing eyes the brawlers descend on them, looking for a fight.”  One such brawler, in Ludwig’s estimation, “could not have been more than twelve at the end of the war”.

Ludwig is hugely concerned by the plight of veterans.  At an insane asylum where he plays the organ on holy days Dr. Wernicke the resident psychiatrist takes him to a special ward set aside for those who never mentally recovered from battle: “The war, which has already been almost forgotten by everyone, still goes on ceaselessly in these rooms.  Grenades explode in these poor ears; the eyes reflect, just as they did four years ago, an incredulous horror . . .”

Midway through the novel Ludwig comes upon a procession of maimed veterans protesting their woefully insufficient pensions.  “First, on a little gocart, comes the stump of a body with a head.  Arms and legs are missing. . . . Next come the amputees on crutches.  These are the strangely distorted silhouettes one sees so often—the straight crutches, with the twisted bodies hanging between them.  Then follow the blind and the one-eyed.”  His observations continue: “I follow the procession to St. Mary’s.  There stand two National Socialists in uniform, with a big sign: ‘Come to Us, Comrades!  Adolf Hitler Will Help You!’”

The Nazis are few in number and throughout the novel remain at the margins of the action.  This, Remarque implies, is how terrible things begin.  In our own country we’ve seen symptoms of fascism wherever Trump holds a rally.  Election statistics inform us that between thirty and forty percent of the electorate take a favorable view of the extreme right.  Trump’s true believers will continue to follow him regardless how many promises—and laws—he breaks, and despite conduct that frequently borders on mental illness.

In The Black Obelisk Ludwig and his boss, Georg Kroll, travel to a nearby village to witness the unveiling of a war memorial they are owed a commission for.  A Catholic priest and a Protestant pastor preside over the ceremony.  The local rabbi has been banned, though two of the villagers who died heroically on the battlefield were Jews.  Ludwig tells us “the Levis got the two lowest places on the back of the tablet where, no doubt, the dogs will piss”.  Later that day a man who flies the black, red and gold Weimar flag rather than the banned Imperial flag is thrown down a flight of stairs and stomped to death by a nationalist mob.  Georg Kroll sarcastically assures Ludwig that no one will be punished.  “Political murder,” Kroll explains, “when it strikes from the right, is honorable and surrounded by mitigating circumstances.”

Followers of the extreme right in this country wear nationalism like an armband with a swastika.  They hold minorities, the weak, the elderly and the infirm in contempt.  Anti-Muslim and anti-Semitic hate crimes are on the ascension, and the number of young black men shot and killed by the police continues to swell.  This will only get worse as things move forward.

Those in the liberal media are consoled by the antics of Stephen Colbert and Jimmy Kimmel and Jon Stewart and other comics who use humor to confront the menace of Trump.  I recall the words of the late British comic Peter Cook who pointed out that during Weimar, in the cabarets and cafes of Berlin, the funniest, sharpest and most biting political satire ever staged was on offer.  Said Cook: “Stopped Hitler right in his tracks.”

Chris Welzenbach is a playwright (“Downsize”) who for many years was a member of Walkabout Theater in Chicago. He can be reached at