These Guys Used To Issue The World's Reserve Currency Too

Tyler Durden's picture

Submitted by Simon Black via Sovereign Man blog,

For hundreds of years the Byzantine Empire coined the most popular reserve currency in the history of the world.

Merchants all over Europe, the Mediterranean, the Middle East, and further, used it in trade for centuries.

It was called the solidus, and was introduced by Constantine I in 312 AD.

The solidus held steady at 4.5 grams of 24-carat gold for nearly seven centuries. Hence its Latin name – ‘solid’. The durability of its purity is nearly unprecedented in the history of money.

Its weight, dimensions and purity remained constant until the 10th century when the government began to debase it.

The debasement was gradual at first, then accelerated rapidly.

In a matter of decades its gold content was reduced to almost zero as the Byzantine Empire was scrambling for cash to finance its numerous wars.

Consequently, Emperor Alexios I Komenos drastically overhauled the Byzantine coinage system in 1092 and introduced a new gold coin, the hyperpyron.

It too was soon subject to gradual debasement. And by the mid 1200s the hyperpyron’s gold content fell drastically again.

As the saying goes, fool me once, shame on you. Fool me twice, shame on me.

The rest of Europe had seen this movie before. And when they saw the gold content in the hyperpyron fall, they quickly lost confidence.

By that time, the Byzantine Empire was weak—a shadow of its former power.

Meanwhile, several small kingdoms in Italy were rising in prosperity, especially Florence, Genoa, and Venice.

The Florentines and the Genoese took up the task and minted a new gold coin called the florin, which at 3.5 grams of pure gold was the most wildly circulated trade currency in Europe and around the Mediterranean for a while.

The Venetian ducat gained wide international acceptance in the 1400s. The ducat contained 99.47% of fine gold—the highest metallurgical purity possible at the time.

As the Venetian merchants traveled far and wide the ducat became an internationally accepted trade currency throughout the world.

Even though he didn’t live in Venice, for example, Leonardo da Vinci was paid by the King of France in Venetian ducats—exactly 400 ducats per year, which in today’s dollars equals to roughly $56,000 (and he didn’t pay any tax…)

The ducat was ultimately supplanted by the Spanish dollar (real de a ocho, or Pieces of Eight) with the onset of the Age of Exploration.

Pieces of Eight became so widespread in international trade that they were legal tender in the United States until the mid 19th century.

The clear lesson here is that this stuff changes.

It’s common for the world’s most powerful country to issue a currency that becomes adopted around the world as the standard for international trade.

But whenever that country reaches a point of epic, terminal decline, and especially when it rapidly debases its currency, the rest of the world seeks an alternative.

The US has been enjoying this special privilege for decades now.

The US dollar is the most widely used currency in the world for international trade. Central banks and sovereign governments around the world hold trillions of US dollars.

And while these changes never happen overnight, it’s clear that the dollar is quickly losing this status.

The French Finance Minister recently called for a ‘rebalancing’ of currencies in global trade settlement. The British, French, Canadians, and Swiss are all on board with this trend.

As are, clearly, the governments of Russia, China, and India. Nearly the entire world understands this trend. Everyone but the United States government.

They’ll be the last ones left in the room after nearly everyone else has headed for the exit, oblivious to their own destruction.

People who understand this shift and get out in front of it will make fortunes.

Those who play Ostrich, stick their heads in the sand, and keep all of their eggs in one frail basket are taking the gamble of their lifetimes.

*  *  *

Nothing Lasts Forever...

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stevefromthenet's picture

Do you have to rub it in man?

TeethVillage88s's picture

Yep, when the public stops listening to NPR Economics & Main Stream Media Economics Shills... then Logic can come back into Politics. But Congress is out of Session ain't happening till like September 2014 at least.

US Federal Government had a Coup in 2002 and no longer is managing the Federal Budget, and no longer has the "Skills" to manage the Budget. Hey, Bob Corker, Rep. Zoe Lofgren, how about an H1F1 VISA for some Asians to start managing the US Federal Budget (For Congress).

The Strength of the USA, It's Economy, and it's Fraudulent Banksters has been great. But there must be a "Law of Exponential Shit Thinking" that says the US System is coming down because of "Poor Stewardship" and False Accounting, False Financial Ratings, and Fraudulent Financial & Corporate Structures.

nope-1004's picture

I can't believe the rest of the worlds' nations sit idly by, taking the US corruption and lies.  There is a better way, and it doesn't include equiities ramping, gold slamming, high unemployment, and warmongering sanctions.

Just can't f'n believe that no one has made a serious move yet.



FlyingDutchman's picture

Putin seems to be doing this.

TeethVillage88s's picture

I'm still reading bits of John Perkins Secret History of the World. I just got to the section on Africa. He says it is the most important thing to talk about. When he asks audiences if they know much about Africa every time no one raises a hand. We have wiped African culture off the map and made their people non-people some how. Our corporations have repeated patterns for decades or longer and nothing has changed from colonial Africa. Even the Aid we send and NGOs sort of cover up the problem and only make us feel better some how.

KnuckleDragger-X's picture

Hand a newly minted college graduate a blank map of the USA and ask him to name the states....

TeethVillage88s's picture

Mr. Geithner; I know you got some gold now. You probably set.

TeethVillage88s's picture

Follow this logic: US Corporations are Expatriates in the sense that Credit has been very high, Banking Rules have been Liberal, Monetary Policy Liberal, Defense Spending Liberal, FISCAL Policy Liberal,... but the money is Stagnant or is not being Invested in the Economy.

1) Velocity of M2 is very low in spite of FISCAL Spending
2) Public Debt is $17.6 Trillion, huge spending
3) Household Debt is Soaring, total debt is $59 Trillion
4) Monetary Policy, TARP, ZIRP, QE3, endless loans
5) Foreigners Invest in the US more than US Banks or Corporations
6) If FRED Charts showed total Cash in US Corporations I'd have a number for you


Rest of the world; foreign direct investment in U.S.; asset, Level
2014:Q1: 3,249,001.2 Millions of Dollars (+ see more)
Quarterly, Not Seasonally Adjusted, ROWFDNQ027S, Updated: 2014-06-05


Gross Private Domestic Investment
2014:Q2: 2,829.3 Billions of Dollars (+ see more)
Quarterly, Seasonally Adjusted Annual Rate, GPDI, Updated: 2014-07-30

US Corporations are Not Loyal, Not Investing, Not Patriots, Don't have a "Good" Vision for the USA, and apparently are out of Ideas other than cutting US Labor Rates, Labor Benefits, and Cutting the Workforce.

Interesting of the $26 Trillion in Foreign Owned US Assets put out by BEA.GOV on IIP Data, looks like about half is accounted for in the 2013 Data Report as Equities, LT Corporate Debt, LT Agency Debt, LT Treasuries. Which leaves me to conclude foreign owned US Real Estate must be about $12-14 Trillion (page 30). But I am not an Economist or Financial guy. Maybe Europeans are also buying US Real Estate.

Save_America1st's picture

great info and post...John Perkins, the Economic Hitman, should definitely be listened to and read by all.  He knows what's up. Did you mean The Secret History of the American Empire?

See you've been here 11 weeks now.

Welcome to Fight Club!

actionjacksonbrownie's picture

One thing has never changed...


Gold has always been money - still is today, and will be for centuries to come.

Acidtest Dummy's picture

The word 'money' has been so 'debased' that there should be a better one for that aspect (the 'moneyness') of Au.

Not Goldman Sachs's picture

Yes, at least the third presentation of the graph. It is meaningful and i suppose there are newcomers....

hedgeless_horseman's picture



So...bullish (nominally) for stocks priced in USD!!!

Rican's picture

Ebola has reached Zimbabwe??

ali-ali-al-qomfri's picture

another form of hemorhagic fiat fever.

JuliaS's picture

Maybe it's global warming.

edotabin's picture


The way things are going, it's more like a global warNing.




Quinvarius's picture

And we just broke out in a new upwards spurt in US money supply.

AlaricBalth's picture

I gave the linked graph above a logarithmic scale, thinking "it can't be that bad...".  

I was wrong!!!

TeethVillage88s's picture

Only insurance against a bank run?

whirling tword freedom's picture

Do we get inflation of the dollar or deflation or some of both??? 

El Vaquero's picture

I suppose that depends on whether you are in the top 0.01% or not.  If they have their way, the unwashed masses are going to get shit on and it won't matter due to us not having anything to purchase anyway, while they (oligarchs) try their damnedest to get theirs.  Call it shitflation.  

exi1ed0ne's picture

Deflation of what you can part with, inflation in what you need.

TeethVillage88s's picture

Clearly there are different sectors.

CEO's Compensation & Federal Contracts to Corporations will continue to Inflate, DoD Contracts will continue to Inflate, Budgets for DHS & Federal Police will continue to Inflate.

The rest is harder for me to imagine. I say housing is Downward Sticky Pricing. There is a shortage of Apartments so Rents will inflate or stay the same. This makes me bullish on US Wages long term... I think wages will tend to rise for skilled jobs, career jobs, and stagnate and maybe deflate for service sector jobs including construction labor, hotel labor, liquor store labor, market labor, retail labor, and hospitality labor.

Commodities will nail us all since we have a Liberal Economic policy Government (no intervention and tending toward privatization including privatizing war)

- Food
- Water
- Fuel
- Energy

These will Inflate as shortages and monopolies appear.

LawsofPhysics's picture

Let me be clear;  "There is not, nor will there ever be, a political, monetary, or economic solution to resource scarcity."



TeethVillage88s's picture

What if we all started having international Pot Parties. You know we got in a basement room, sat crosslegged in a circle and passed joints to each other.

But seriously... China May Crash. US May Crash. EU May Crash. There could be a kind of Reset if we terminated all the bankers that refused to write off bad loans or excessive debt...

Maybe it is a dream. But who says we have to do what ever the bankers say? Liberal Status Quo except when it comes to writing off Debt or having a Jubilee. Like Paul Singer buying up old Zimbabwe Debt then demanding to be paid.

- Free Trade, No Tariffs
- No Currency Controls for Hording Individuals or Banks that Bailout or attempt to take capital to other countries
- No Government Training for Employees in Tech Sector or Manufacturing
- No National Stock Piles to prevent Economic Shocks since we believe in Privatization
- No Public Energy, Water, Gas, or Transportation Utilities
- Privatize Defense, Post Office, Air Shipping, Rail, Buses, Water Transpo, COMEX, CFTC, NYSE, AMSE, Internet, K-12, Power Line Maintenance, Road & Highway Maintenance, Bridge Maintenance, Hydroelectric Power, Water & Sewage

KnuckleDragger-X's picture

Yes, all that and more.  Unfortunately eeryone would need to be weaned from the tit and that government crack is just too tasty.

AdvancingTime's picture

I contend the primary reason that inflation has not raised its ugly head or become a major economic issue is because we are pouring such a large  percentage of wealth into intangible products or goods. If faith drops in these intangible "promises" and money suddenly flows into tangible goods seeking a safe haven inflation will soar. Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply.

The timetable on which economic events unfold is often quite uneven and this supports the possibility of an inflation scenario. A key issue being one of timing. If the price of gas jumps to $8 a gallon overnight do you buy gas and not make your car payment or stop driving the twenty miles to work? Answer, it could be months before your car is repossessed so you buy gas.

 It is important to remember that debts can go unpaid and promises be left unfilled. If this happens where does it  leave us? Chaos and major disruption would result from such a scenario. As we have seen from the economic crisis of 2008 and following many other unsettling developments legal actions can continue to drag on for years.  More in the article below.

q99x2's picture

MaxCoin Last Price: 1 bumba coin.

Rican's picture

Where can I get some ducats?

Sudden Debt's picture

I've bought mine mostly in spain and holland. For the rest they're hard to find.
Ducats, Lion dollars, Silver ridders, all verry nice and collactable coins.
Just received 2 lion dollars last friday to add to my collection.'s picture

I found some information here, and will continue my search:

Can you please let me know if there are any online shops that you would recommend picking up any/all of said coins at?  I only travel to Europe a few times a year and don't necessarily want to wait until my next trip to start stacking these.  

Do you have any shops you can recommend in Europe so that I can physically go pick some up as soon as I have some free time?

Thank you in advance. 

Mi Naem's picture

ZH seems to whip out the "Nothing Lasts Forever..." chart every couple of weeks. 

Love the re-runs. 

I always notice that the USA is at the top.  Prob'ly, cause we're #1. 

Dubaibanker's picture

US Govt has been micromanaging a lot of countries but it's diktat is not being followed upon due to differing interests and varying ambitions of the various nations.

US has been at a losing end for years now. Brilliant commentary follows:

Sorry, Washington: “Not Everything in the World Is about America”
Duc888's picture



Re-valuation is on the way.


Gonna be some funny shit when all the stuff being shipped to Walfart gets marked up 400% or so on the way over here.


Countries are voting with their feet and walking away from the green toilet paper issued by the Fed / US Treasury crime syndicate.

debtor of last resort's picture

Let me just print another shale gas trillion and i will acknowledge you're correct.


Mr Yellen

Majikat's picture

Wonder if a neutral cryptocurrency takes hold as the next reserve... makes sense... but knowing how selfish humans can be... wouldn't hold my breath.

apberusdisvet's picture

The shadow govt should be permanently placed in the shadows. Nuke the CFR, the Bilderbergs, Skull and Bones, and all the other elitists.  Let's see them all scurry to their hole at the Denver Airport.

JRobby's picture

Well, now that would be one really neat surgical nuclear strike.




Dragon HAwk's picture

No Way.. are they going to a Public Shelter....

quadratic_equation's picture

At least in the past, reserve currencies they were based in gold contents, now with the USD it's based in air but everyone in earth has air supply so why use the USD for global reserve?

One And Only's picture

It makes settling internation trade easier. If I export to say 20 countries I'd have to keep reserves of all those currencies and constantly do the conversions. Also you don't want to have a reserve of currency that collapses. So having a reserve currency is safer and makes trading easier, especially for the country who issues it because they export a lot of their inflation.

Now 8 trillion US dollars are held overseas. If there is no longer a need to have dollars than they end up back in the US. That's a lot of inflation.

Bioscale's picture

Accepting $ is just better than being bombed by US military for denying to establish a central bank that serves the moneychangers in FED and keeps billions of $ in its reserves.

redd_green's picture

in one small sentence:   trade deficit.   The term "reserve currency" is bullshit.   What it meams is that one country (the USA) was designated the fall guy, to have a huge trade deficit with most of the world, so that jobs get sent overseas with its currency as well.     its how the USA was sold off to foreigners.

JenkinsLane's picture

Sell Simon, Sell!