– Trust me, this time is different… (Sovereign Man, Feb 26, 2013):
By 1789, a lot of French people were starving. Their economy had long since deteriorated into a weak, pitiful shell. Decades of unsustainable spending had left the French treasury depleted. The currency was being rapidly debased. Food was scarce, and expensive.
Perhaps most famously, though, the French monarchy was dangerously out of touch with reality, historically enshrined with the quip, “Let them eat cake.”
The Bourbon monarchy paid the price for it, eventually losing their heads in a 1793 execution. But it took the French economy decades to finally recover.
Along the way, the government tried an experiment: issuing a form of paper money. It didn’t matter to the French politicians that every previous experiment with paper money in history had been an absolute disaster.
As French Assemblyman M. Matrineau put it in 1790, “Paper money under a despotism is dangerous. It favors corruption. But in a nation constitutionally governed, which itself takes care in the emission of its notes [and] determines their number and use, that danger no longer exists.”
Translation: This time is different. We’re different. We’re smarter. We won’t suffer the same fate. TRUST US.
Within a few years, hyperinflation had taken hold in France. A measure of flour that sold for two francs in 1790 was selling for 225 francs by 1795. Everything soared. Carriage hires. Butter. Sugar. Everything.
Naturally, the French government decided to fix this problem by printing even more money, doubling the money supply from 7 to 14 billion units in a six-month period.
When these measures also failed, the French government imposed every control in the book– price controls, capital controls, information controls, people controls. They confiscated lands, they filled the prisons, they waged genocide against their own people.
History shows there are always consequences to entrusting a paper money supply to a tiny handful of men. The French experiment is but one example. Our modern fiat experiment will be another.
Like the French, our politicians think this time is different. Our central bankers think they’re smarter. And they want us to trust them. After all, what could go wrong?
Ben Bernanke, a man who has expanded the Federal Reserve balance sheet by nearly 300% during his tenure as central banker, just wrapped up Congressional testimony downplaying the risks of his own money printing:
“We do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery…”
It’s also quite interesting that the Federal Reserve Chairman is discussing the ‘stronger’ economy, especially when by the government’s own numbers, US GDP contracted in the 4th quarter of 2012. Meanwhile the price of everything from food to fuel keeps getting higher.
Simultaneously, politicians in the US are racing to avoid imminent ‘sequestration’ budget cuts. They’ve created a problem caused by excess spending, and their solution is to ensure they can keep spending.
The French were in the same boat in the 18th century. During the time of Louis XV, no one could imagine how French society could possibly function if they cut the welfare system or defense budget. So they kept spending… kept going into debt… and kept debasing the currency.
We know what happened next.
The US already must borrow money just to pay interest on the money they’ve already borrowed. The political elite is dangerously out of touch. This time is not different. Assuming otherwise is really dangerous.
Well, yes and no. The French Revolution was the response to mass hunger and total inequality. France also had a growing middle class with a stake in the system. This time, they plan to wipe out the middle class, without one, there can be no revolution. One of the Rules of Revolution that we are taught as historians.
It wasn’t decades to recover because Napoleon came up, became a general at 26…..almost unheard of then. He invaded other nations, Egypt and Italy very early, and took their treasures back to the French. By the time Napoleon left power in 1815, France was virtually debt free.
Unfortunately, todays wars are fought to enrich corporations, not the people, so we end up poorer and poorer. The people get the costs, the corporations all the profits. It is a total outrage.
As corrupt as the Directory was, and even Napoleon as First Counsel, they served France, not the rich. So, I don’t see much to compare.
We are on the way down and out. We have fools in power, and the court and executive branch are no better. I wish we were more like France, but corruption is far worse. The leaders understood feeding the people as important, this one is led by those who only see their own jobs.
John Bohener was more concerned about losing his job than serving the people, so to hell with fixing sequestation, just go home.
We are already over the cliff. The only thing remaining is the fall.
William Butler Yeats said it very succinctly:-
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Marilyn, your article is a lot more interesting and informative than the original. You need to be writing these articles. Thanks