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Saturday, 6 August 2011

Caravan in Berlin Friday

 Woke up about half six and of course no internet, which meant no BBC radio 4 :( So at seven I went to reception to buy more Internets and was told I would have to wait 'till eight when the boss came in, back to the caravan for another cup of tea, then tried again this time I met the boss and he sold me two hours of 'Net time but this time, this meant separate slips of paper for two separate hours, ah the penny has dropped.

At last I could listen to radio 4 and catch up with the news, and what news! America's credit rating has dropped!!!! The world has had the same economic system since Breton Woods in 1971 when America ditched the gold standard and instead made the dollar the reserve currency for the world, another name for this is 'the fiat currency', this function used to be performed by the Pound Sterling, but since WWII meant that, the UK was no longer the world economic power it once was, it no longer operated as reserve currency. Muddling along using gold as fiat currency, is a bit cumbersome because gold is rather heavy. So countries started to use the Dollar as a trading currency instead, this worked fine whilst America had a healthy trade balance. The world's commodities are bought and sold in dollars, wheat, oil, etc, etc. If the dollar was devalued, the world's drillers and farmers would be paid less. Which is why America and the rest of world, need a new fiat currency.

Once China became the world's manufacturing giant, and America was in the situation of importing much more than it was exporting, the pressure to devalue the Dollar grew and grows still.

Many people are suggesting a basket of world currencies, could be the reserve currency, this would work fine, except when it comes to people who use the Euro. It was very noticeable how cheap things were in Poland, except when it came to road fuel, road fuel in Germany is cheaper than road fuel in Poland or the UK, this is easily achievable if a currency can be revalued up or down to balance it's economy in terms of exports and imports.

 This is the problem with countries within the Euro zone, they cannot revalue their currencies because they all use the same currency.

Using gold as a fiat currency is a guard against inflation, because if you only print the number of bank notes in circulation in relation to the amount of gold a nation holds, you don't risk, adding 0's to denominations, or printing lots more notes to cure economic problems, gold keeps things financially disciplined.

Economic behaviour that causes inflation, such as can be seen in Germany before WW11 causes massive social damage.

Reading about the Weimar Republic and the massive social damage that the hyper inflation caused, explains why the German people elected someone like Hitler.

(end of international economics rant and back to travel blog)

So anyway once the two hours had been used up with my usage, Lisa and Angie's use, I went back to reception to buy more 'Net time, this time I explained to the manager how I had mistakenly bought a ten hour block, not knowing it could not be split and he kindly gave me 4 separate hours to compensate me, and just to make the point - I have created most of this content using them!

So after tea and breakfast we set off for the centre of Berlin to explore, we have taken many photos of Berlin which will be uploaded to this blog later on, then this blog will be given a polish.


  1. Hi there!
    I'm stil in Poland , in Przworsk!

    Kind regards, Mariette

  2. Hello Mariette,

    After a couple of interesting days in Berlin we are now on the Stena line ferry, sailing from Hoek van Holland to Harwich and hopefully will arrive home tonight.


    Lisa, Angie and Pete.

    Ps I've tons more to do to this blog so check back later, also to email me directly