by October 18, 2011
Phnom Penh, Cambodia
In his seminal work The Rise and Fall of the Third Reich, William Shirer recounts how the struggling Weimar Republic printed its way out of reparation debt from World War I. Out-of-control printing caused the German mark to fall from 75 per dollar in 1921, to more than 4 billion just 3-years later.
Talk about chaos. After a brief period of credit-fueled economic respite, the onset of the global depression in 1929 had people in the streets clamoring for change. Hitler’s National Socialism promised the world… and under such economic distress, people believed him.
There are two important lessons here. First is that hyperinflation comes very quickly. Confidence languishes for months, even years… until one day the currency begins to slide, slowly at first, then exponentially.
The second is what followed. Economic disaster begets social unrest, the two are inextricably linked. Populist rebellions and roving gangs became a constant presence in the republic.
It’s at this point, when people are really hurting, they’re the most impressionable. They’re looking for somebody, anybody, to lead them out of the turmoil. What they got was a charismatic leader with a grand plan.
Here in Cambodia, a similar story unfolded in the 1970s.