For over a hundred years, the French used the livre as a currency. It was not backed by gold, but since a good deal of France was owned by the Catholic Church and the nobility, it didn’t really matter. The serfs and groveling peasants got sick of the corrupt rule, and by means of protesting, withdrawing of services, and other means available to everyone back then, gradually a class called “The Bourgeoisie” was formed. This became the shopkeepers, factory owners, farmers, tradesmen, and what we now call the ‘middle class.’ Gradually, more and more land was transferred into private hands by government selling it to pay its bills, but it was never enough. For a hundred years, the government had been running deficits. The bankers would loan livres to government to pay its bills, and like the Federal Reserve today, the livres were created out of thin air. Government proliferated, and more and more bureaucrats were hired, just like today. Will Trump’s efforts at reducing government size work? Time will tell, but Democrats never took economics 101, so they will always vote for more government and taxes. The French deficit grew astronomically, and kept growing, just like today’s $37 trillion U.S. federal debt. Finally, in 1781, the banks told government, “no more money.” The interest on government debt, by then, was greater than the entire French GDP. America is approaching that condition. This caused a great uproar, because there was no money to pay government’s ever increasing expenditures. With government bills unpaid and great upheavals throughout the land, revolution seemed inevitable.
Surely, one doesn’t have to be an economist, to realize that U.S. tax receipts are $2 trillion short of being able to pay government bills, and one must protect one’s self and family. Why does the majority, always seem so stupid, which cannot be fixed, unfortunately.
The revolution began in 1789. When the government ran out of money, it decided to confiscate the church properties and sell them to finance its deficits. Since the church and its properties were tax exempt, the burden went to the bourgeoisie, who had really gotten tired of being severely over-taxed and regulated, by their bureaucracy. The result was greater unrest, and on July 14th 1789, “Bastille Day” happened, and all the French jails were opened and inmates freed. The French Revolution had begun, mostly headed by Robespierre. It was horrible. Riots, food shortages, violence, and you name it. The government then issued 5% bonds to pay the public debt, and they became known as ”assignats,” and were denominated in livres. These were similar to U.S. government bonds today, which are denominated in dollars. Neither were backed by anything but thin air and the paper on which they were printed. Today, we have not only “T Bills,” but ‘bit-coins’ and others, the holders of each, are also possessing of pieces of paper, backed by nothing, and Trump has just freed from a long prison sentence, the founder of the biggest bit-coin fraud ever conceived, but since the Trumps are deeply involved in bit-coin, there’s the explanation. The livres became useless automatically, and the assignats were what were used as money. By 1793, there were 45.9 billion assignats in circulation, and the paper on which to print them was their only value, and it was made in England. Assignats were printed by anyone who had a printing press! As a result of the revolution, in 1796, a new type of moderate government was formed, called the “Directorate.” It didn’t amount t much, but on May 21st, 1797, all paper money was declared worthless and void.
Napoleon had distinguished himself as a brave, innovative soldier, and when he came back from Egypt in 1799, he became one of the three consuls of the new Directorate government, and eventually became one for life. Napoleon was an outstanding leader, and became emperor in 1804, two years after the French Franc had been established. A new law established that the ratio between silver and gold was to be 15.5 to 1. Here, on October 24th, it was 84 to 1. King Louis 16th had been executed, and Napoleon reduced the bureaucracy by a huge amount, established the Constitution as was already written, inculcating it into the French government. Banking was reformed, courts established, and Napoleon dictated that only gold and silver, which were in short supply, were to be used as money. Silver was used as money or ‘legal tender,’ and it was to be 5 grains per ounce of the silver French franc. Napoleon invaded Russia, and like Hitler, was defeated by the frigid weather, and retreated, also from Spain, and died in 1823. He ruled France only by a decade.
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The entire French Revolution, which killed probably millions, was begun by an out of control bureaucracy, worthless paper money, uneven taxation, confiscation of private church property, and attempting to sell it to pay its debts, and as has always been the end of all governments, where paper was available, printing paper money, declaring it to be “legal tender,” even though it was backed by nothing, and eventually collapsing, due to default.
Smart people, throughout all of government collapses, realized, either sooner or too late, that the real money is not on paper, that government cannot create wealth, but destroys it, and that real money is self-validated, by its physical beauty, rarity, effort, exploration and capital required to produce it, plus physical ownership and ability to use as money, if and when needed.
In the King James Version of the Bible, the word “Silver” is used 320 times, and “gold,” is used 417 times. Does that give you a clue?
-Don Stott. don@coloradogold.com