Echoes Through Time: Unraveling Financial Crises from Weimar to Wall Street

 

The recent utterances of the President of the United States of America have left everyone in jitters. There is panic around the world, and countries are trying to figure out how to react to these tariffs. While reading about these different reactions, I thought of the crises of the 1930s, 1970s and the sub-prime crisis of 2008. Now, for the younger generation, it is a bit difficult to connect the dots as they have not lived through these crises. Today, let's embark on a journey through three pivotal financial crises: the German hyperinflation of the early 1920s, the collapse of Herstatt Bank in 1974, and the subprime mortgage meltdown of 2008. These stories, though separated by decades, are threads woven into the same fabric of financial folly and resilience.

The Weimar Republic's Dance with Hyperinflation (1921–1923)

Picture post-World War I Germany, a nation burdened with reparations and economic despair. In a desperate bid to meet its obligations, the government resorted to printing more money. The result? A catastrophic devaluation of the German mark. By 1923, the exchange rate spiraled to an astronomical one trillion marks to a single U.S. dollar. Citizens transported wheelbarrows brimming with banknotes just to purchase basic necessities. There is  the famous anecdote of a person ordering a cup of coffee for a certain price and in the time the coffee was delivered to the table the prices went up. This period wasn't merely about skyrocketing prices; it eroded public trust in financial institutions and set the stage for political upheavals that would later shape world history. 

Fast Forward-The Sudden Demise of Herstatt Bank (1974) 

Fast forward to the 1970s. Bankhaus Herstatt was a small private bank based in Cologne, West Germany. It had developed a reputation in foreign exchange trading, especially during the post-Bretton Woods era when exchange rates became more volatile. The 1970s was characterised by the collapse of the fixed exchange currency system of the Bretton Woods, there was high currency volatility and the currency market was highly speculative. Amidst this, the Herstatt bank started speculating in the foreign exchange market to make profit. 

On June 26, 1974, the German Banking Regulator revoked the license of the bank. The problem was that the customers of Herstatt bank had already deposited the payments in Deutsche Marks but the New York market had not opened by then. As the license was revoked the payments could not be settled. Time zone variations made this misalignment even worse, leaving counterparties vulnerable to large losses, particularly in New York. The episode brought to light the complex network of international financial interdependencies and the dangers of unregulated foreign currency activities. 

The Subprime Mortgage Crisis (2007–2008) 

Now we move to the final stage of the story which played out in Uncle Sam's country.  The subrpime crisis happened which was because of the over abundance of sub prime mortagages available in the market which made the dream of owning houses a reality for many Americans. Motivated by immediate profits, financial institutions packaged these hazardous loans into mortgage-backed securities and offered them for sale to investors all over the world. However, defaults increased as housing prices fell and interest rates rose. Major financial institutions failed, world markets plummeted, and economies entered severe recessions as a result of the disastrous knock-on effects. This crisis laid bare the dangers of excessive risk-taking and the opacity of complex financial instruments. 

Interwoven Lessons Across Eras  

At the first glance it seems as if they are three different isolated events but a closer look reveals a recurring pattern: the catastrophic consequences of unchecked financial practices and the absence of robust regulatory oversight. From the reckless monetary policies of Weimar Germany to the speculative gambles of Herstatt Bank, and the imprudent lending of the 2000s, each episode underscores the imperative for vigilance, transparency, and accountability in financial systems. 

Conclusion

These three historical events tell us the difference in the policy makers initiatives and how with the passage of time, the financial market has become more complex. It also points out the fact that today in the globalised market, a single country cannot initiate a step without it having a global cascading effect. Let us see how the future unfurls itself and what more has Donald 2.0 got in store for the world. 

Rosa's Rebellion: Tracing the Path from Revolutionary Suffrage to India's Political Renaissance

 

The United Nations declared March 8 as International Women’s Day because, on this day in 1917, women played a major role in the Russian Revolution, which led to the abdication of the Tsar and the establishment of a provisional government that granted women the right to vote.

Rosa Luxemburg, a Marxist activist and politician, wrote an article titled “Women's Suffrage and Class Struggle” in 1912. In her piece, she quoted the French philosopher Charles Fourier, who stated, “In any society, the degree of female emancipation is the natural measure of the general emancipation.” This article discusses the rights of proletarian women to vote. The capitalists of the time opposed granting women this right, fearing that it would ignite further social change. However, the unionization of proletarian women turned them into a formidable force. These women were economically independent, and according to the norms of pre-1848 absolutism, they were deemed mature enough to exercise political rights.

A very interesting point raised by Rosa Luxemburg in her article concerns the participation of bourgeois women in politics and the possibility that capitalists might have conceded to their demands for voting rights. She uses the term “parasite” to describe bourgeois women, referring to them as “parasites of the parasites” because they are “nothing but co-consumers of the surplus value their men extract from the proletariat.” She asserts that granting direct suffrage to women would further the overall struggle for the liberation of the proletariat.

In the present context, this article remains highly relevant. While virtually every country now extends direct suffrage to women, the critical question remains: have these rights translated into substantial influence over societal and environmental changes? In India, women were granted the right to vote alongside men in 1947. However, their representation in Parliament has been dismally low. Although the 33% reservation bill has been passed, it comes with several conditions that undermine the effective participation of women in the political process. Moreover, systemic issues such as socio-cultural barriers, entrenched patriarchal norms, and unequal access to political resources have further limited their influence.

Recent data from governmental and academic sources indicate that the underrepresentation of women in key decision-making roles is not merely a statistical anomaly but a reflection of deep-rooted structural challenges. For instance, despite constituting nearly half of the electorate, women in India continue to be marginalized in legislative bodies, which affects the prioritization of policies on economic reform, social justice, and environmental sustainability. Research published by institutions such as the Centre for the Study of Developing Societies (CSDS) and reports available on the official websites of the Election Commission of India provide evidence that only a fraction of parliamentary seats are occupied by women, despite the introduction of affirmative measures.

In addition, entrenched political practices and cultural stereotypes often relegate women’s issues to a secondary status. This underscores the urgent need for a more robust framework that not only legislates for greater female participation but also ensures that women have the requisite support and resources to influence policy effectively. In the Indian context, targeted policy interventions, capacity-building programs, and stricter enforcement of reservation policies are essential to dismantle these barriers. Only by addressing these structural impediments can India hope to unlock the full potential of its female electorate and foster a more inclusive, equitable political landscape. Such a transformation is critical not only for the progress of women but also for the overall development and democratization of the society.