(From a column I wrote 7/16/2004)
For a hundred years, the French used the Livre as their currency. Did they create Livres out of thin air, as all governments do today? Yes, and the French government and citizens used the Livre to pay their bills and save, as do the U.S. government, and far too many citizens today. As today in America, the French government proliferated. Bureaucrats were everywhere, enforcing pointless laws, and fining violators as well. By 1787, 2300 men, 2800 women and 600 young persons were in jail, (Bastille), for violations of one law. France is a predominately Catholic Nation, and the government seized Catholic as well as wealthy peoples’ properties. This resulted in the French Revolution in 1789, and the Bastille was raided. Bastille Day in France, is still celebrated on July 14th. The Revolution was caused by a hundred years of deficits and government growth. Sound familiar? The French Revolution was horrible. Riots, food shortages, enormous taxes and violence. The Livre’s value went to zero, as did the wealth of French citizens who had saved in the Livre.
After the Revolution, the French Government was supposedly reformed, and it became known as the “Directorate.” It issued bonds and currencies, which were known as “Assignats.” Within a couple of years, the Livre and Assignats became worthless, since many hundreds of millions of them had been printed. Run-away inflation, eventually caused the government to declare all paper money to be void. Plates used to print Livres and Assignats were destroyed.
Napoleon Bonaparte had distinguished himself as a soldier. When he returned from Egypt in 1799, and saw the ruins of France, he became one of three consuls of the Directorate, and eventually became one for life, becoming Emperor in 1804. He was an outstanding leader, instituted the French Franc, which was used until the Euro was installed. Napoleon saw to it, that bureaucracy was reduced to a fraction of what is had been, a constitution was written, courts established, church and wealthy’s properties restored. Serfdom was abolished, and Napoleon declared that only gold and silver could be used as money. He ruled that the ratio between gold and silver was 15.5 to 1. Today, the ratio is 83 to 1, making silver an excellent buy. As I write this on Friday, Feb 3rd, precious metals have corrected, and check on Monday, and if they are still low, it is an ideal time to acquire them!
Since there was no longer any paper money in France, gold and silver came in short supply, but Napoleon saw to it that the supply of specie was gradually obtained, and citizens could get them from government offices fairly quickly. Napoleon had a successful 15- year emperorship.
What happened in France in the 18th century, was the natural result of fiscal mismanagement, government spending to the extreme, huge numbers of bureaucrats snooping everywhere, and fining, jailing, and abusing the citizenry. The French, simply had enough, and took to the streets with everything they could find, to stop the abuse by government and the nobility. Under Napoleon, The King was out, and a constitutional government was established.
What lessons can be drawn from the French experience? There are many, but first of all, as in France, government endlessly printing un-backed paper money, reducing its value and purchasing power, has always been common in all currency collapses. Today, the M3 is growing a billion a day. In all nations in history, their currencies go to zero, and the dollar is no exception, even though it has gone down slower than did the French Livre and Assignat. It has lost 9$% of its purchasing power in 75 years. There comes a time in the history of all nations, when governments take too much on themselves, thanks to politicians giving largess from the public treasury to buy votes. Governments, throughout history, have ruled too harshly, passed too many laws, taxed too much, and become a first-rate pain in the posterior. The U.S. has gone so far with Biden, that we now have a president, who is basically unable to form a sentence or give a speech without a teleprompter, and who obviously is taking instructions from the “Squad.” How much worse can it get? BIden is 78, and I’ll be 89 in two weeks, and my mind still works well.
The Federal Reserve, which is not federal and has no reserves, has convinced everyone that inflation can be cured by high interest rates. This has caused all businesses and citizens real hardship. Real estate, car sales, and many others, have been ruined, and the balance between wages and profits, totally destroyed. The dictionary is correct. Inflation is caused by an increase in the money supply, and not by interest rates, which should not be controlled by governments, but by the marketplace.
Think about interest rates being controlled by the marketplace. Mortgages, have interest attached to them, which is a charge for the use of someone’s money. Bank and mortgage dollars, are created out of thin air. Basically, just entries in a computer. If I were a mortgage broker or supplier of a mortgage, I’d compete with others, by doing it at less than the current rate. Currently is it 7%? I’d do them at 6% for applicants with a credit score of over 750, thereby weeding out the irresponsible, who are the ones who cause defaults. I’d get trouble free customers, who deserved a lower rate, and good ones would flock to my door. I’d compete with marketplace mortgage rates. Why not? I’ve never had one, so I can only surmise, but I think it must be accurate, and if not, call me and correct me.
The Biden administration, has printed and injected into the currency supply, well over five trillion dollars in under two years in the White House. The welcoming of illegals and the huge costs of them alone, has cost trillions. Trump, almost stopped them, and when Biden was sworn in, he had a stack of 48 executive orders awaiting his signature, and he signed them as soon as the ink was dry on his presidency. 100%, were designed to destroy what Trump accomplished.
It happened here, when the British imposed just one too many taxes on the colonies, and they revolted. Thanks to France, we won. The South had a belly full of dishonest Abe with his “Tariff of abomination,” and decided to secede. (The industrial revolution was ten years later, and that mightily decreased the need for slaves). Both the currencies of the North and South became worthless, so many millions were printed. In my lifetime, new pickups have gone from $650 to $65,000, and foodstuffs the same. Gasoline from 20 cents to $3.75, and on it can go and will. FDR changed the price of gold from $20.67, which it had been for a hundred years, to $35, and as I write this, it is over $1890. For goodness sake people, save in real money, not things denominated in dollars. How much purchasing power will an IRA, bond, or savings account, in dollars be worth, if the dollar becomes worthless, as it already has mostly? LOOK AT HISTORY! It always seems to repeat itself in one form or another. 1-970-249-4646