There Is No Escaping History: Fiat Currency Eventually Fails

Authored by Alex Deluce via GoldTelegraph.com,

Paper currency has led to the collapse of almost every economy that has tried to institute a fiat currency to trade for goods and services. It’s not looking very well for the once mighty dollar, either.

Throughout history, attempts at using fiat currency, even today, has failed. When the government prints fiat money that isn’t backed by any value, disaster inevitably ensues. Still, the long history of failed fiat currency is being ignored by today’s money printers.

At the start of the first century, the Roman denarius was a coin containing approximately 94 percent real silver. By the end of the century, the amount of silver was reduced to 85 percent. Devaluing the denarius meant Nero and succeeding emperors could pay off their bills more easily while becoming richer. A hundred years later, the denarius contained less than 50 percent silver, and in 244 A.D., Emperor Philip the Arab devalued the currency down to 0.05 percent silver content. By the time the Roman empire collapsed, the denarius was made of 0.02 percent silver, and it became useless as a currency.

Copper backed China’s initial paper currency. When copper became scarce, China began to make iron coins. The iron currency became overissued and soon became devalued. By the 11th century, a Szechuan bank issued another paper currency that could be exchanged for valuable goods such as rare metals or silk. Continuous war with neighboring Mongols caused economic inflation. China lost the war to Genghis Khan, who was too busy with other conquests to take much interest in China. Genghis’ grandson Kublai brought China and its finances under Mongolian control. Kublai used fiat currency for the vast China trade, including trade with Marco Polo. Kublai simply continued to print vast amounts of money as he continued his marauding and conquering. But infusing the economy with worthless monopoly money ruined many and chaos became the norm.

France has an interesting history with paper money. It may be the only country to face economic collapse not once, not twice, but three times by flooding the country with fiat currency.

High-living Sun King Louis XIV left a debt of 3 billion livres for his successor to deal with. Louis XV desperately needed incoming tax payments and demanded these be paid in paper currency. Predictably, the paper currency was quickly overprinted and became worthless.

In the 18th century, France began another attempt at printing paper currency called assignats. By the end of the century, the assignat suffered 13,000 percent inflation. Napoleon rode to the rescue by instituting the gold franc, which stabilized France’s erratic currency. One would think the French might have seen a connection between the stable economy and gold-backed currency. No such luck.

France reverted to paper currency in the 1930s, the paper franc. In just more than a decade, the fiat franc became devalued by 99 percent. France’s third attempt at printing worthless monopoly money proved to be a dismal failure.

Following WWI, Germany’s Weimar Republic faced historic debts. So, Germany put the printing presses to work – a total of 133 printing companies were kept busy. The mark became more than worthless. It was used to heat furnaces. Burning the paper currency to keep warm was more efficient than using it for trade.

A wheel barrel became a wallet.

Throughout the 20th century, many other countries flooded their economy with fiat currency – and collapsed as a result. The direct correlation between government interference with money and the devaluation of currency seems to escape many.

Has the US learned anything about fiat money? The Colonies happily jumped on the fiat currency bandwagon and began flooding the land with their own paper money. When these currencies quickly became overissued, they became – surprise! – devalued. Like the marc to come a few centuries later, colonial currency made for excellent bathroom tissue. The Revolutionary War was financed with a paper currency called the continental. It, too, crashed on a grand scale. This, finally, brought about some healthy American distrust for fiat currency. The US dollar was now backed by actual gold and saw the most splendid and richest economic growth in history. People came from all parts of the globe to be a part of such a success story.

As if on schedule, the Federal Reserve appeared. Currency once again fell under the aegis of government control and manipulation. In 1933, President Roosevelt made ownership of gold illegal. The ties between the US dollar and the country’s gold reserves were severed gradually until President Nixon eliminated the gold standard entirely in 1971. The once mighty US dollar instantly turned into fiat currency. This was followed by a decade of disastrous inflation.

The US has followed the historical pattern of paper money. The government is currently printing dollars with abandon to pay off its record debt (sound like a familiar refrain?). Following a long historical precedence, the US dollar is losing value at an alarming rate as we head into a period of high inflation.

As history has demonstrated, inflation is a guaranteed devaluer of currency. Following WWII, Greece saw an increase in inflation of 18 percent per day. The country’s deficit tripled within a year. And then things got really bad. An invasion by the Axis powers saw income plummet by 70 percent. Like so many other countries in the past, Greece started printing worthless currency and experienced one of the worse hyperinflations in history.

As previously stated, Germany’s Weimar Republic faced unprecedented debt in the wake of WWI. No country would accept its worthless mark as repayment, forcing Germany to sell off marks for other foreign currencies at any price. This lead to Germany’s famous hyperinflation of 29,500 percent.

Zimbabwe is famous for its 100 trillion-dollar note during its period of catastrophic hyperinflation. Prices doubled daily as Zimbabwe faced hyperinflation of 79 billion percent in 2008. A loaf of bread was priced at 35 million Zimbabwe dollars. Government intervention can invariably be found as the source of any hyperinflation.

There is no escaping history. Paper money and out-of-control national debts have always devalued the currency and caused massive inflation. The US dollar remains on the cusp. It is anyone’s guess which way it will go. But the roadmap to a financial disaster was printed thousands of years ago. Is anyone paying attention?

Comments

ted41776 Mon, 04/02/2018 - 20:47 Permalink

no it won't, this time it's different! /sarc now don't forget kids, put your extra money in the bank into a savings account like a good lemming

 

why the black and white pictures though? there are plenty of recent examples

 

https://i.imgur.com/XKsPZk1.jpg

https://i.imgur.com/np84gOe.jpg

https://i.imgur.com/9a15Z29.jpg

https://i.imgur.com/1Z6n21l.jpg

https://i.imgur.com/lkGkEmN.jpg

https://i.imgur.com/Hmi4XPV.jpg

https://i.imgur.com/4YnJc8y.jpg

J S Bach AtATrESICI Mon, 04/02/2018 - 20:54 Permalink

The history of Weimar Germany is unknown to most people because the knowledge of its injustice leads them to a complete understanding of the rise of Hitler and National Socialism.  This naturally evolves into a "full-circle" understanding of cause and effect - which then leads inevitably to the (((cancerous root))) of all of our woes.

I leave it to you, dear reader, to figure out the rest.

In reply to by AtATrESICI

luckylongshot beepbop Tue, 04/03/2018 - 01:08 Permalink

The problem with claiming all fiat money eventually fails is that the statement is simply not true. While it is true is that all debt based fiat money eventually fails, fiat money that is not debt based has shown it does not always fail. Case in point the Tally system. žIn the middle ages England operated successfully for 500 years using split wooden tally sticks as money. žThis system operated so well that during the best part of the middle ages an average laborer only needed to work 14 weeks a year to support his family (Rogers). žAccording to Hoskins (1985) the long period of prosperity in the Middle Ages was due to the absence of usurious lending practices. žThis was because under the tally system there was no interest.

What caused the end of the Tally system was the private bankers funding Cromwell to invade England, the currency did not fail by itself.

In reply to by beepbop

heretical luckylongshot Tue, 04/03/2018 - 04:16 Permalink

My understanding is that it was Jewish bankers in Holland that financed Cromwell.

Also that the 'Dark Ages' are so-called not because they were dark, but because nothing of note happened. Imagine a man going to the local baker and paying a farthing for a loaf of bread. Several decades later, his grandson goes to the same baker, now run by the descendants of the original baker, and pays exactly the same: one farthing for a loaf of bread.

Such was life without usury, and war.

Please correct me if I am wrong about the 'Dark Ages'; no historian, me.

In reply to by luckylongshot

NidStyles Bigly Mon, 04/02/2018 - 21:25 Permalink

Most of humanity is being forced to experience hell because of one group.

 

For you autistic sodomites:

Blue, you’re worthless.

Black, go fuck goats.

Reds, go eat each other.

Yellow, you’re all retards anyways.

White, you’re a terrible example of a good person.

The rest of you, you’re following what some queer kid in a physics class didn’t understand, because he’s retarded.

Quit doing the Jews work for them, make them do their own work for once.

In reply to by Bigly

Betrayed J S Bach Mon, 04/02/2018 - 21:12 Permalink

And the Rothschild's involvement in creating the fiat disaster. Like any lowlife criminal they hate eye's pointed on em.

I been saying periodically since I've been posting here that no Fiat monetary system has survived longer than 75 years before imploding on it's self. The Fed's Fiat scam is at 105 years. This is why they need a WAR BAD. It's not gonna be long. Get out of the large city's if you can.

In reply to by J S Bach

NoBillsOfCredit masada Mon, 04/02/2018 - 22:43 Permalink

"Reserve currency" is a relatively new term. So you are incorrect. The U.S. Dollar has not changed since the Constitution was written and defined in the 1792 coinage act. The fact is that the Federal Reserve Note is NOT a U.S. Dollar which FACT is confessed by the statement "Redeemable in Lawful Money" printed on the face of all Federal Reserve Note's from 1913-1963. They are not same as the current FEDERAL RESERVE NOTE (not redeemable in lawful money). The claim that the Federal Reserve Note is a claim on anything is ludicrous because fraud extinguishes all contracts.  Words have to have a definition or they are just gibberish. The reality is that the current Federal Reserve Notes are no different than Monopoly money and their use was fostered upon our Nation by an ignorant or traitorous government and their Bankster friends. 

In reply to by masada

Implied Violins NoBillsOfCredit Tue, 04/03/2018 - 01:07 Permalink

You are wrong about the "reserve currency"; by definition, it is the currency that is recognized by the world community to settle international debts.  And that has changed many times throughout history:

https://azizonomics.com/2012/01/04/a-history-of-reserve-currencies-in-one-graph/

The true history of "reserve currencies" goes back through Egypt; Greece; Sumeria; and even Babylon - over 5,000 years ago.

The U.S. dollar has been the world's reserve currency only since Bretton Woods in 1944.  It was NOT used primarily to settle international debts before then.

In reply to by NoBillsOfCredit

Moribundus J S Bach Mon, 04/02/2018 - 23:15 Permalink

Why you guys are so obsessed to spreading disinfo?

"Fascist regimes generally came into existence in times of crisis, when economic elites, landowners and business owners feared that a revolution or uprising was imminent.[9]Fascists allied themselves with the economic elites, promising to protect their social status and to suppress any potential working class revolution.[10] In exchange, the elites were asked to subordinate their interests to a broader nationalist project, thus fascist economic policies generally protect inequality and privilege while also featuring an important role for state intervention in the economy."

 

Hitler has not much to do with it. Source: Economics of fascism on wikipedia. Main cause was corporate greed and expansion 

https://en.m.wikipedia.org/wiki/New_Order_(Nazism)

 

In reply to by J S Bach

Lore J S Bach Tue, 04/03/2018 - 03:12 Permalink

Note how the article keeps repeating that money is printed by government... by government... by government...

Lies don't become true by repetition. The central bank franchise is NOT a public utility. If you have any doubts, look into the ownership structure.

Secrets of the Federal Reserve by Eustace Mullins

Mullins presents some bare facts about the Federal Reserve System with subjects on: it IS NOT a U.S. government bank; it IS NOT controlled by Congress; it IS a privately owned Central Bank controlled by the elite financiers in their own interest. The Federal Reserve elite controls excessive interest rates, inflation, the printing of paper money, and have taken control of the depression of prosperity in the United States.

In reply to by J S Bach

herkomilchen AtATrESICI Mon, 04/02/2018 - 21:09 Permalink

More advanced technology and expanded global trade increasing specialization of labor.  Accelerating productivity growth at rates unheard of in the past has been soaking up the huge amounts of money being printed.  Americans would all be millionaires in purchasing power were it not for the money printing frantically devaluing the dollar as fast as it gains.

But inflation has to grow exponentially to continue to work for the government and elites.  That exponential printing rate will overtake and exceed even modern productivity growth very soon now.  Just was a longer fuse this time around.

In reply to by AtATrESICI

HRH of Aquitaine 2.0 Mon, 04/02/2018 - 20:51 Permalink

It is sad that most people went to school for at least 12 years and have no idea. Even many with a college diploma are clueless. They will learn, as my mother often said, "the easy way or the hard way." And that is an exact quote.

Giving the federal reserve the power to print US currency was the beginning of the end. It happend long before most of us were born on December 23, 1913. Those fucking rat bastards sold us down the river.

InnVestuhrr Mon, 04/02/2018 - 20:59 Permalink

There Is No Escaping Obvious History - ALL Shiny-Shit Currencies Have Failed ... otherwise they would still exist.

The reason is that humans CANNOT live within any limits unless imposed upon them from outside their society/government.

NidStyles InnVestuhrr Mon, 04/02/2018 - 21:39 Permalink

All countries and major players and banks pay in those shiny metals. Paper is for peasants and slaves. If you don’t hold those shiny metals you’re a slave to the Fed.

The more you hold, the better off you are. 

I am not saying that paper is worthless, really the stocks are the only paper worth owning, if the company is worthy. Owning stock basically make you a partial owner of the employees. Just like holding municipal bonds makes the local officials more complacent to your local meandering.

In reply to by InnVestuhrr

Caught_Fish Mon, 04/02/2018 - 21:02 Permalink

Energy, resources, knowledge and labor.

I believe these are the true basis for currency.

When money rises above a medium of exchange for goods and services, it has been corrupted.

Fantasy Free E… Mon, 04/02/2018 - 21:03 Permalink

Fiat money is not the problem. The problem is managing the money supply politically.

http://quillian.net/blog/the-means-determines-the-end-facebook/

Any government can abuse any currency and always does. The fact that a currency is fiat is not relevant.

With a fiat currency, the currency can still be converted into gold and it can also be converted into anything else money can buy.

Central banks don't actually create money. Only work creates money. Without work, money would not be needed. The natural money supply consist of value generated by work plus what can be reasonably be expected to be repaid. Governments create money on top of that amount. That fact that it is fiat money makes no difference. 

Sizzurp Fantasy Free E… Mon, 04/02/2018 - 22:33 Permalink

What I find interesting about that chart is that most of those countries were not major established economic powers. The US did have hyper inflation associated with the revolutionary and civil wars, but it was really a developing country at that point. You have French revolution event, and Germany in the aftermath of WW1.  Argentina has been on a slide for quite awhile. Venezuela is a Marxist basket case. Other than that there really has not been a major economic power to have hyperinflation. The US defaulted on its gold obligation nearly 50 years ago, and we have had inflation, but not hyperinflation. Predicting hyperinflation in the US seems to be extreme unless something else happens, like civil war, or we lose a major war and become subjugated.  The latter seems unlikely without nuclear exchange.  There is no need to worry about a post apocalypse world since nobody will be around anyway.

In reply to by Fantasy Free E…

weliveinamatrix Mon, 04/02/2018 - 21:07 Permalink

we already know this...We all know what is coming...the problem with articles such as this, and millions of videos, is its always "not if, but when?"...it could be tomorrow or 10 years from now...seems to me, just be self sufficient as much as possible, water, food, silver, protection etc...Throw a few bucks in crypto if ya want, but I would not invest more than you can lose.  Try to keep healthy...learn a trade. I am learning how to weld.  am fortunate to not have much money so I can fix things..either I fix them or I pay someone else to fix them, and I dont have money to pay anyone else.

InnVestuhrr amadeus39 Tue, 04/03/2018 - 03:03 Permalink

False premise.

I am wealthy because I am strong and I earned my wealth, not inherited it.

I have a lot to lose, and an arsenal of weapons and ammo that will result in me keeping what I earned and the recycling of those who try to take it from me.

The poor have no understanding of the wealthy, just assumptions, delusions, imaginings, myths, and wild guesses.

In reply to by amadeus39

tion weliveinamatrix Mon, 04/02/2018 - 21:54 Permalink

Hey coast :) 

For a new skill some people maybe don’t think of often, I’d like to propose that learning to propagate plants could be worth looking into. Doesn’t necessarily need a large capital outlay or a lot of space. A lot of online suppliers of harder to find perennial food plants actually have their products sold out every year. A lot of less common ornamentals seem very popular too. Propagating perennial food plants also gives a person the means to very inexpensively increase the resilience of their community as well.

Trees can take a long time to bear, so I hope besides planting moar fruit and nut trees/bushes this spring, maybe some will consider taking up a side hustle of propagating them too ^^

In reply to by weliveinamatrix

Dragon HAwk tion Mon, 04/02/2018 - 22:31 Permalink

It's called Horticulture, Agriculture & Gardening,  good book out there  called from seed to seed, but any  old fashioned gardening book will tell you how to raise next years crop from this years,  unless of course you are Monsanto and you make that shit Illegal.

 

In reply to by tion