Thanks Red Badger. BTW, it's nonsense -- there is no "debasedment" of currency, the currency is what the political authority sez it is -- that began in the Kdm of Lydia -- and there is nothing else.
Posted on 07/05/2016 4:36:48 PM PDT by vannrox
The consistent theme from my travels so far in Europe– the UK, Scandinavia, Lithuania– has been noticeably higher prices. Shockingly so, in some instances.
London, where I spent a rather pleasant and rare sunny weekend with friends and colleagues, has gone from being ‘stupid’ pricey, to just plain absurd. Tube prices, taxi fares, food prices, restaurant bills, train fares… it all keeps going up.
And to cap it all off, the British government’s VAT increases have ensured that absolutely everyone is paying a little bit more.
Here in Lithuania, the buzz around town is the spiraling gasoline prices, which have shot past $7/gallon in local currency. The bootleg fuel industry is thriving here as smugglers bring in cheaper fuel from neighboring Belarus and sell it at a 30% discount.
Needless to say, such practices are heavily frowned upon by the local government looking to get its fair share. Fuel smuggling operations now involve such an intricate network of audacious deception and bribery, it ranks up there with the tall tales of America’s famed Prohibition-era bootleggers.
Now, the official story for rising prices across Europe usually involves some insipid excuse about tensions with Iran or weather. And in nearly every instance, the government propaganda machines simply insult people’s intelligence and understate inflation by an entire order of magnitude.
Yet as John Maynard Keynes, the high priest of modern monetarism, once said, “There is no subtler, surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
Prescient words from the man whose General Theory constitutes the playbook from which modern politicians and central bankers routinely pillage the livelihoods of billions of people across the planet.
Currency debasement, though, has a long and distinguished history.
In his 1958 work State and Currency in the Roman Empire to 300 A.D., Sture Bolin outlines the systematic (and almost constant) debasement of the silver denarius coin of ancient Rome, which I have reproduced below:
Subsequent emperors became even more clever at debasing the currency; Caracalla (reign 211-217 AD) created a new coin, the Antoninianus, which had a face value far greater than its weight and metal content.
Under Gallienus (reign 260-268 AD), the Antoninianus was composed of less than 5% silver. By the time of Aurelian in 270 AD, further debasement was essentially impossible… though they kept trying.
Such debasement led to rampant inflation in the empire. A slave under the reign of Commodus that cost 500 denarii was five times as expensive under Septimius Severus. A second century modius of wheat (about 1/4 bushel) sold for 1/2 denarius. By the time of Diocletian’s price fixing in 301 AD, the nominal price was 200 times more expensive.
In Roman Egypt, where the best documentation on pricing has survived, a measure of wheat which sold for 200 drachmae in 276 AD increased to more than 2,000,000 drachmae in 334 AD, roughly 1,000,000% inflation in a span of 58-years.
In his 1960 work Roman Coins, historian Harold Mattingly remarked about Roman inflation that “[t]he Empire had, in all but words, declared itself bankrupt and thrown the burden of its insolvency on the citizens.”
Other historical examples abound, but Mattingly’s assessment sums it up the best. Any government that resorts to debasing the currency is making a conscious decision to stick the people with the consequences of its insolvency.
In the starkest example of modern times, the United States government is insolvent to the tune of tens of trillions of dollars and hemorrhaging cash on a daily basis.
Meanwhile, the US dollar has lost 95% of its value while under the management of the Federal Reserve since 1913.
Today, the Fed’s balance sheet has expanded to nearly $3 trillion of shaky, questionable assets… while posting a mere $55 billion in capital, roughly 1.8%. This is about the same level to which Lehman Brothers was leveraged before its own spectacular collapse in 2008.
Yes, there’s a reason the fuel smuggling business is thriving in Lithuania and prices in London have become absurd. Like the Roman Emperors of the past, today’s political elite is throwing the burden of its insolvency onto the people.
It’s in the interest of government to create dependents by bankrupting everyone.
The commissars want lots and lots of serfs.
And your solution or remedy is........
One of my Nashville buddies did a tour in Scandinavia a few years ago. asked him if he’d had any really good beers. He said “No! Beer in a club is ridiculously priced. 7/8 bucks a bottle!. All taxes!
Get rid of socialism. But the Scandinavians have been with it for a very long time...doubt they would stand up and fight for what belongs to them.
PinGGG!...
I was 9 years old in 1964, when the last silver US coins were minted. I knew then we were going downhill
..
“Beer in a club is ridiculously priced. 7/8 bucks a bottle!. All taxes!”
The reason for this is that alcoholism is a real problem in Scandinavia, partially from the long, dark winters and Seasonal Affective Disorder, and partially due to the general hopelessness and futility of living under socialism. What I do like about many of those countries is that they direct those tazes directly to the treatment of those problems. Compare and contrast that with this country.
At the get-together afterwards, the vicar said: "We make half of what Americans make, and pay twice as much as they do for everything. No wonder we can't get ahead."
Totally accurate.
But if you are a working man in Europe what are you going to do about it?
Complain?
We think OUR elected leaders are bad.
European elected leaders START at the left wing.
There's nowhere to turn if you don't take it, and LIKE it.
[ “There is no subtler, surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” ]
What, like the current U.S. situation?
Ben who?
Thx, when I saw “Roman Empire” in the article, I figured someone had pinged me, did the search, and for a change actually *saw* it in a timely manner! :’) Will do the GGG thing later.
Dover?
It was invented by ancestors of Ben Bernanke.................
BOHICA!...............
Ben had.
OPEC has been doing its defacto pricing in Euros for over ten years, in order to keep crude price-stable in Europe — the EU being a nearby large market, and the USSR, oops, I mean, Russia selling about 45 percent of the EU supply. Since Brexit, the Euro has dropped against the US dollar. It’s just about that, and not about any bugaboos.
http://www.xe.com/currencyconverter/convert/?From=EUR&To=USD
OPEC Has Already Turned to the Euro
GoldMoney Alert
February 18, 2004
...The source for the euro exchange rate is the Federal Reserve, and I have calculated the euro's average exchange rate to the dollar for each year based on daily data.We can see from column (4) in the above table that in 2001, each barrel of imported crude oil cost $21.40 on average for that year. But by 2003 the average price of a barrel of crude oil had risen 26.0% to $26.97 per barrel. However, the important point is shown in column (6). Note that the price of crude oil in terms of euros is essentially unchanged throughout this 3-year period.
2001
As the dollar has fallen, the dollar price of crude oil has risen. But the euro price of crude oil remains essentially unchanged throughout this 3-year period. It does not seem logical that this result is pure coincidence. It is more likely the result of purposeful design, namely, that OPEC is mindful of the dollar's decline and increases the dollar price of its crude oil by an amount that offsets the loss in purchasing power OPEC's members would otherwise incur. In short, OPEC is protecting its purchasing power as the dollar declines.
Ben had by Ben Bernanke.........................
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