Monday, February 16, 2009

US Dollar Devaluation? History Shows:

Avner Mandelman in the Globe and Mail, with inspiration from the book Fiat Money, Inflation in France, written 50 years ago by Andrew Dickson White, sees some distressing similarities of today's situation and post-Revolutionary France:
What evidence is there that today resembles that particular past so much that the ending is bound to be similar? First, in 1789, power shifted from those who had money to those who mostly didn't – similar to today. Second, the revolutionary French government tried to pay the debt racked up by the deposed regime with freshly printed money – again like today. Third, any dissenting voices in the National Assembly were shouted down with dire warnings of a “catastrophe” if the stimulus package were not approved – once more, like today.

But fourth and worst, as soon as the freshly printed money was used, the cry arose that it was not enough – and so more was printed. Then more, more and more.

That last part is not yet in evidence today. However, once the recently approved U.S. stimulus is used up, more will be demanded of Congress, just as it was in 18th century France – you can bet on it.

Hat tip: Pat, who adds:

"My late father-In-law knew all too well about paper money. He was German. He told me his father had the money reduced to zero four times in his life. We were talking about this right after a Ruble "revaluation" in Russia. In Zimbabwe they recently issued a 1 trillion dollar note."

1 comment:

  1. Alright Dan! My Father-In-law`s wisdom made your Blog! Pat