MEFO Bills: Or how the Nazis created a Ponzi scheme to rearm Germany
This little blog post is about a bit of economic history that tends to be glossed over in many history books, at least those without a strong economic focus. In fact, it's both ingenious and moronic in equal measure, but the Nazis made heavy use of it to rearm for what would be World War II and I wanted to cover it. First some background. After World War I, Germany was forbidden to rebuild their military beyond a pitiful level, mostly because the guys who won did not want Germany trying to go for round 2. Of course, the Nazis had every intention of going for round 2, but they needed to find a way to pay for the rearmament expenses without getting caught, and also do so without scaring away people because they were a terrible credit risk. It's really hard to do both because credit requires public records of your ability to pay back debts to act as a basis for your ability to get credit. At least, that's how it usually works. The Nazis thus had to get a ton of money by hook ...