Thread by @drew_macmartin

Who was Hugo Stinnes?

In the early 1920’s in Weimar Germany, Hugo Stinnes became the richest man in Germany earning the title the ‘Inflation King’ How did he do it? Time for a #Thread 🧵 🪡 👇 1/

For reference, whenever I say ‘Inflation King’ 🤴, I am saying the words with a ‘Sausage King of Chicago’ accent from Ferris Buellers day off. 2/

Hugo Stinnes was born in Germany 🇩🇪 in 1870. Stinnes inherited his father’s coal #mining ⛏ business in 1890 at the age of 20. He began to purchase seagoing vessels 🚢 to transport his coal and other materials. 3/

By the age of 23, Stinnes had started investing heavily into Steel (another hard asset) and gradually his wealth began to grow. 4/

Before World War I, Stinnes had already begun to amass a wealth of several million pounds. During the War, Stinnes began buying more shipping infrastructure and timber, further growing his wealth. 5/

What made Stinnes the richest man in Germany is where things get interesting 🤔. As a quick history refresher, Weimar Germany 🇩🇪 suffered terrible #hyperinflation in the 1920s. 6/

The value of paper marks (relative to gold Marks) drastically lost value in 1922 and 1923. #Hyperinflation causes the #currency 💴 to become worthless (see chart). Most people lose a lot of their #wealth during hyperinflation, but not Stinnes. 7/

In Hyperinflationary events your savings and your purchasing power shrinks. You are punished for saving money (like a responsible person) in your bank 🏦. (see the Bank of England’s #BOE recent announcement about the possibility of negative interest rates). /8

In the 1920s, during this hyperinflation, Stinnes wealth grew and grew a lot to become the richest man in Germany. His secret... /9

Stinnes borrowed large amounts of money in Germany’s native currency 💴 (the German Papiermark ‘Paper Mark’) and #invested that money in hard assets like Steel, coal, transportation infrastructure, #RealEstate 🏡 etc... 10/

When the hyperinflation hit, the value of the Paper Mark money he borrowed was worth less and less (when it came to pay back the borrowed debts) and the hard assets he owned with the borrowed money (#preciousmetals , real estate 🏡, infrastructure) all increased in value. /11

By 1924 when the value of the paper 📝 mark was relatively worthless, Stinnes repaid his debts by selling some of his hard assets which had then ballooned in price, making Stinnes the richest man in Germany by 1925. 12/

Does this strategy sound familiar? Well it should. @michael_saylor and @MicroStrategy #MSTR just took a page out of the Stinnes #Inflation playbook in Dec of 2020, borrowing $650 million in debt 💸 and using those funds to buy 29,646 MORE #Bitcoin for the company. 13/

If #hyperinflation does hit again, think of the #inflation like a #flood. Hard assets (such as #GOLD #Silver #RealEstate #btc) are the arc that will protect you (preserve your wealth). Last time I checked, the hardest asset out there is #Bitcoin . Just ask @michael_saylor 14/

What are your thoughts on the Hugo Stinnes wealth playbook? Please feel free to comment/ share your feedback! 15/15

Check out the long form version of Hugo Stinnes story and how it relates to what’s happening in the world today here 👇

wealthplaybook.ca/post/who-was-h…