The Meb Faber Show · Friday, July 31, 2026
Liaquat Ahamed explains that the German stock market experienced a massive bubble following the Franco-Prussian War. The billion-dollar reparation payment from France, injected into the German economy, represented a significant portion of its GDP and led to excessive foreign investment.
“And the heart of the mania was in Germany because in 1870, you had the Franco-Prussian war. And France declared war on Germany, and then proceeded to lose the war. Germany imposed a reparation of a billion dollars.”
“And now to translate sums from that era, multiply by a thousand. So a billion dollars would be a trillion dollars today.”
“So the German economy was a 4 to 5 billion dollar economy. Injecting a billion dollars into the economy in two years, essentially 20% of GDP into the economy, caused a massive stock market bubble.”