Could the Weimar Hyperinflation Happen Again in America?

I keep suggesting to the Yanks that they open up Alcatraz and stuff it with their numerous crooks. And if that's insufficient space then build some more.
They bankrupted the world and just get a ticking off !! It beggars belief.

It was hardly just us: RBS pays billions while Commerzbank bankers get nothing

whats worse is RBS is almost totally owned by the tax payer!

Obviously there is an official reserve ratio, set by the Fed. Without even getting into anything else, it should be obvious that if you can securitize a loan and sell it off, this frees you to make more loans. This is an international, not just a US, practice. Therefore, throughout the world, reserve ratios are flouted regularly in good times, when people are willing to buy the securities offered by the banks.
In bad times, the multiplier exists only because the whole thing goes into reverse: as loans are defaulted on, asset prices deflate, more loans get defaulted on because of the lower asset prices, more people default, and so on.
Just to give a quick example of this in action: the lousy economy is causing one of my neighbors, who owns his own business, to possibly have his house foreclosed. He's in at least the second wave of defaults, not the first. He was considered a worthy borrower when times were good, and he was. Now he's not anymore. There are lots of people in this position.

Lehman: Lehman was an investment bank. Investment banks were not regulated by the Fed.
AIG was an insurance company, and they were up to their eyeballs in this as well. Also, not regulated by the Fed.

As for enforcement, I don't know how it's done in other countries. I suspect culture plays as strong a role as official action. As far as official action, the moment I found out the bank only had to report its reserve position once every two weeks I knew it was a fiction. Obviously, especially in this time of instant electronic transactions, reporting only once every two weeks is crazy.
But what you're also missing is that this will happen again, because some way will be found to make it happen again. They can ban securitization of loans, tighten up reserve enforcement, etc., etc. Some way will be found around all of it, and the party will start all over again.
Read A Nation of Counterfeiters, by Stephen Mihm. Prior to the Civil War, the US had no recognized national currency, believe it or not. At that time, private banks issued money against their reserves of gold and silver. The situation that wound up existing was - what else? - an unlimited money supply. This book is about that time.
So now we have a single national currency, and a single enforcer of the money supply: the Fed. But what did you wind up with in the recent boom? A de facto unlimited money supply.

Conclusion: a way will always be found. It was found when there was a gold standard, it was found again in the Twenties under a slightly looser gold standard, and it was found again in this boom under a fiat currency regime with regulations put in place specifically to prevent the Twenties happening again.
Instability is inherent in capitalism.

Technically the shareholders own the bank.

Tax payers only own the debt...

A bit like new aircraft - amazingly good while the computers function properly but one glitch and its all over.

I agree with pretty much everything you have written here BDS and I recognise a little like the joke between two friends attacked by a bear. One stops to put his trainers on so he can out run his friend and avoid being the next meal.

In a competitive world the US and many others are perhaps the worst offenders of the system. US far more important as it is the key power player with global standard currency. BUT - there are a number of other countries who have pursued the same system and policies but have not flouted the rules. Now this may either be because their unit of currency is not the standard like the dollar or because they are better mananged, regulated etc. It could be they were simply just lucky being too small and off the radar. I reckon taking these later arguements loses sight of the reasons for the current fiasco or worse underplays them.

Either way these countries which have now been exposed and all individuals and financial institutions can judge for them selves what level of risk and exposure they are prepared to consume.

The net conclusion to all this debt you suggest is deflation or negative multiplier etc.

But imo that ignores the duality of the economy once again that one persons expenditure is another persons income. One persons debt is someone elses credit. Yes - even if that money was created out of smoke. Because the governments have stepped in - true asset valuations have not taken place and those asset valuations via wealth and spending will feed into the real economy sooner or later.

Current US inflation stats ignored food prices... Here is an old article and I would suggest more of this will be coming round as economies come to grips and moving out of recession... http://www.msnbc.msn.com/id/24127314/

Food and fuel prices are at this level in a recession how will prices cope in boom times??? Higher prices, higher interest rates and higher inflation... Unavoidable!

More on bankers, British variety, which I suppose you can file under "Old Habits Die Hard": It'll Go Faster Than You Think