We’re coming out of being subjected to all kinds of restrictions, lock – downs and medical mandates for nearly 3 years. In some rare cases this is still ongoing – no wonder the world economy is in a precarious situation. Inflation is skyrocketing and now major banks have failed. A derivatives-based economy and fractional reserve banking have been stretching ever so gradually. But this does not come as news to us. It has been happening for decades. And we will argue that in fact the same cycle has been playing out for centuries.
It’s not all bad news, though. If we learn the lessons from history we will be able to empower ourselves, our families, our communities, and ultimately the culture at large. As sovereign citizens of a sovereign nation our duty is to inform ourselves, to the best of our ability. We must take decisions based on this. From a place of moral and for a lot of us a spiritual standpoint and understanding.
We now witness the failure of Silicon Valley Bank and other major institutions. It’s a crucial time to reflect on the lessons from history and to act on them. Make sure to check out part 1 of this series of articles. There we go over (to my knowledge) the first major episode of money debasement of Western civilization: the ancient Athenians. We’ll continue relying on the outline of such events of currency mayhem from Michael Maloney’s Guide to Investing In Gold & Silver. 1
Rome: Empire And Currency Collapse Together
Just as what how it happened with the Greek Athenians, Rome was the next powerful empire to experiment with their money and ultimately end up collapsing. For 750 years, successive Roman leaders engaged in the debasement of their once sound gold– and silver-based monetary system.
Like the Greeks, the debasement involved mixing their gold and silver coinage with base metals like copper giving the politicians first-hand use of a soon to be devalued currency. They also engaged in other methods such as clipping the edges off coins. When you entered a government building, the edges of your coins would be clipped as a tax. Coins were also made smaller and eventually the Romans ended up with a very much inferior coinage.
Emperor Diocletian's Reign
Inflation had reached a high point by the time of emperor Diocletian in 284 A.D. The coinage had been reduced to tin-plated copper and bronze. Diocletian issued his Edict of Prices in 301, where he imposed a death penalty on anyone selling goods for more than the mandated price. The Edict also froze wages, resulting in an economic nightmare for both employers and workers.
“To Diocletian’s surprise, however, prices just kept rising. Merchants could no longer sell their wares at a profit, so they closed up shop. People either left their chosen careers to seek one where wages weren’t fixed, or just gave up and accepted welfare from the State… Rome had a population of about one million, and at this period of time, the government was doling out free wheat to approximately 200,000 citizens. That equaled out to 20 percent of the population on welfare.”2
Public works, a welfare state, and vast military to enforce a massive empire contributed to a failing currency. Whenever funds would dry up, Diocletian would mint vast amounts of already-worthless copper and bronze coins. This all contributed to contine to debase gold and silver coins.
The World's First Hyper-Inflation
“All this resulted in the world’s first documented hyperinflation. In Diocletian’s Edict of Prices… a pound of gold was worth 50,000 denari in the year A.D. 301, but by mid-century was worth 2.12 billion denari. That means the price of gold rose 42,400 times in fifty or so years. This resulted in all currency-based trade coming to a virtual standstill, and the economic system reverted to a barter system.”3
Maloney goes on to point out that if gold was to rise from its 1930’s era fixed price of $35 per ounce over 42,400 times. Just like it did at the time of Diocletian, it would go to a little under $1.5 million/ounce!4
This, of course, would not so much indicate the rising value of gold, but rather the declining value of fiat currency to all but worthless. As we shall see in future articles, the advent of paper currencies and other derivatives gave a new breath to experiments in money at the expense of the common populations. Following is a chart taken from https://www.macrotrends.net/ of the price of gold in US Dollars (USD) over the last 100 years. Just think that this rise in price would not even register. It would be a blip on a chart, if what happened in Diocletian’s day happened again.
1. Maloney, Michael. Guide to Investing In Gold & Silver. Scottsdale, RDA Press 2015.
3. Ibid, 9-10.
4. Ibid, 10.