What a Currency Collapse Looks Like (It Is Not Pretty)

Thanks to Max Keiser at MaxKeiser.com for this pair of videos chronicling the French experience with fiat money in the 1700s.

If you think that the collapse of the dollar could never happen, that we are safe from such a calamity simply because we are the United States, think again. Fiat money goes into a death spiral at some point. It can be propped and manipulated, but sooner or later it dies, as it did in 18th century France (and many other places.)

The French Revolution in many ways was a direct result of a monetary implosion. The streets of Paris flowed red after the ledgers of Paris were overwhelmed by red ink.

As Keiser sites in the below video, Napoleon in the wake of the Revolution swore that he would never resort to paper to finance his government. The gold Franc lasted until World War I.

Yes, but that was a long time ago, and in France. This is America. C’mon.

Yes, and the value of houses always rises.

Watch the videos below and see if you don’t see striking parallels to what we are witness to now. Let’s pray that good ole’ American exceptionalism kicks in soon and we get our act together.

14 comments
simonvrouwe
simonvrouwe

Bottom line: value of gold and paper money is mainly trust in their scarcity,  which is trust in physical/chemical properties in case of gold and trust in the issuers (politicians / bankers / armies) in case of paper money. A third option can be added: Bitcoin a digital currency of which the value (scarcity) is trust in mathematics AND trust in sanity of (most of) its users.

TexaLee
TexaLee

Seems like all the countries of the G20 are in a process of "inflating" their currencies in concert to each others--The currency units seem to be piling up in their respective National banks for now. It could get interesting if these "units" get into the respective economies of their countries. Guess we will see--But holding a lot of paper or "electrons" sure makes me nervous.

RReaganRepublic
RReaganRepublic

The Weimar Republic, where the German currency collapsed, and when the German citizens then rejected their Democractic Republic within the economic crisis of the great depression era, replaced it with Hitler and the Nazis.. This what can happen to a nation when it's panics, and acts out of desperation, and do not have the forsight and courage to force their politicians to adhere to sound conservative fiscal and financial policies..

 

Aidan Haggerty
Aidan Haggerty

I wouldn't be surprised that if we had a revolution today it would be like the one in France...People don't understand history, much less economic history.

TexaLee
TexaLee

Thats where the term "Not worth a Continental" came from--but they don't teach that in US History books anymore. They also don't teach that FDR DEVALUED the Dollar in 1934, when after he recalled the Gold in 1933, he revalued gold to $35 per ounce from about $21 per ounce before the recall in order to keep us on the Gold Standard while putting more money in circulation.

Stephen Faust
Stephen Faust

2015....2016, but I would say definetly by the next presidential election.....I would be suprised if they can keep it together that long.......hell, they lied, cheated and were down right misleading to get through this last election.

ErnestDeanLudwick
ErnestDeanLudwick

I also strongly recommend the RT channel, online or on Comcast channel 81.  "The Max Keiser Report" is a great weekly injection of reality.

cyber0
cyber0

This monetary or financial crisis differs greatly from the one suffered by the French.  This time it''s world wide.  The end of the price system it's self is at hand.  Politicians, bankers and the wealthy will do everything they can to postpone the collapse but their efforts will only intensify the pain and anguish of a failing system.  

David Wilson
David Wilson

It's ALREADY HERE!! A Ben Franklin is only worth about $1 NOW!!

Blc Sattler
Blc Sattler

Currency collapse is UGLY. We don't even have to look very far to find its ugliness; just across the pond....

drmattbarney
drmattbarney

We don't even need to travel to France - the first American example - the Continental dollar - was so deflated, it likely provided the context for why they insisted on gold or silver-backed currency in the constitution, to avoid the first USA fiat currency debacle. http://en.wikipedia.org/wiki/Early_American_currency

Fred972
Fred972

 @TexaLee They don't teach it in French school too, just a little about the assignats, in high school… More precisely they DID when I was 15, I just don't know if they do it now, but I know they teach about Karl Marx in some secondary school curses… Be VERY careful in America, in my opinion sane states should separate from the rest in order not to fall, soon. Here we simply can't protect ourselves anymore, only pepper spray is easily available.

TexaLee
TexaLee

 @drmattbarneyThats where the term "Not Worth A Continental" came from. But they don't teach that in the History books anymore.