The year was 1921. It was near midnight. Economist Ludwig von Mises was guiding some visitors through Vienna’s dimly lit inner city. The city was asleep. All was quiet except for the sound of the men’s muted conversation and the clop of their footsteps on the cobblestone streets. The men had just come from an economic conference where they had been discussing the disastrous effects of inflation.
Prices were rising rapidly in most of the countries of post — World War I Europe. Germany and Austria, especially, were facing hyperinflation. In Austria, the economy was in the doldrums. Large numbers of industrial firms were idle throughout the land, while others were working only part-time.
As the men approached the center of the city, the still of the night was broken by “the heavy drone of the Austro-Hungarian Bank’s printing presses.” Their Viennese host, Mises, explained that those presses “were running incessantly day and night, to produce new banknotes.” Throughout the land, only the printing presses making banknotes were operating at full speed. “Let us hope,” Mises told his guests, “that industry in Germany and Austria will once more regain its prewar volume and that war- and inflation-related industries, devoted specifically to the printing of notes, will give way to more useful activities.” FULL ARTICLE