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Nov. 25, 2024 - Freedomain Radio - Stefan Molyneux
06:22
The Great Crash of the Roman Denarius
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So here is a graphic, the cliff ride of hell itself.
Hey, see if you can figure out when the government started bribing the poor.
So this is the silver value of the denarius from 300 BC to 400 AD, and as you can see along the top, you know, a couple of hundred years, pretty stable.
I think it's the British pound sterling has been the most long-lasting currency, even though it's gone down enormously in value at about 400 years.
The value of the US dollar has crashed by about 98% since the foundation of the Federal Reserve in 1913, so a little over 100 years.
But here you can see silver value of denarius.
Oh, it's doing well.
It's doing well.
And this is logarithmic, right?
You see, we're going way down here.
It's crazy.
So this is even steeper if you were to map it out properly.
This is a really, really tough time for the Romans.
Again, 113 years stretch, 192 to 305 AD, 84% of the emperors were either brutally murdered or assassinated in some other way.
Pretty, pretty bad stuff.
There was a crisis in the 3rd century from 235 to 284 AD. We've got invasion, we've got civil war, plague, economic depression, and it looked like the whole thing was about to go into the toilet and...
This crisis occurred at the same time that the silver denarius went from having 2.7 grams of silver to basically nothing.
It was silver in name only.
So they just started squirting base metal like bronze and copper into the silver coins to base the currency like hell, and by the year 300 AD, silver denarius, or its equivalent, had only a trace of silver left.
So, as currencies devalue, As inflation hits and currencies devalue and debt escalates, there's lots of social upheaval.
And this tends to feed itself, right?
So as you debase the currency, you destroy the economy.
As you destroy the economy, you need the welfare state because you're afraid of revolution.
Because you have the welfare state and you don't have the taxes to pay for it because the economy is being destroyed, what do you have to do?
Hey, you've got to devalue the currency to pay for all of the welfare state.
Oh, that means that the economy gets further destroyed, which puts more people on the welfare state.
You get how this It works.
It's pretty brutal as a whole.
So that's the silver value of the denarius, 300 BC to 400 AD. This, I argue, is at the foundation of a lot of these problems.
A lot of the problems are a reflection of this, because if you can't devalue the denarius, you actually have to start telling the truth to the people about what you could afford and what you can't afford.
But this is a cocaine-addicted fantasy.
Third century fiscal crisis, as we just talked about, decline in silver content of the Roman coin.
So you see here, 64 to 68, right?
Boom!
90%, 90% crashes down, crashes down.
In 100 years, it goes to virtually nothing.
And this escalates the problems.
If they weren't allowed, like Bitcoin style or whatever, they weren't allowed to do all of this crap, Then they'd actually have to make better decisions than all these bad decisions they make by thinking they have this infinite magic money photocopying machine.
Governments get worse and worse as soon as they gain control over the currency, which every politician thirsts for, but they just start making worse and worse decisions, you know, like, say, going to war in Iraq without raising taxes.
Anyway.
So, this hyperinflation created a huge amount of economic chaos.
And as we talked about, first century BC, about a million inhabitants in Rome, and until the end of the second century AD, it was about the same.
And then it began to collapse.
Slowly throughout the 3rd century and in the 4th, it really collapsed.
By the 5th century, out of the million people, only 50,000 people were left in Rome.
So, let's just say I'm guessing there was a bit of a housing crash and they had some elbow room.
Hey, finally got a seat in the Colosseum!
Oh look, the barbarians are pouring over the walls.
Anyway, so this is crazy.
So again, first century, denarius 90% silver, end of the second century down to less than 70%.
One century later, less than 5%.
By 350 AD, here's the number.
I mean, you can't even say this stuff with a straight face.
All but worthless.
An exchange rate of 4,600,000 The denarius to a gold solidus.
Or nearly 9 million to the original aureus.
And sorry, I forgot to mention the sources.
We're going to put all of the sources for all I'm saying below.
So, yeah, I mean, it's crazy.
I mean, it was just, and you can't make any plans.
You can't, long-term interest rates, who knows, investments, you can't, everybody gets paralyzed.
Just for comparison, 1913, Foundation of the Federal Reserve.
This comes from the USinflationcalculator.com.
Value of $1 Federal Reserve, $1913.
Hey, let's go back here too.
Bomb, bomb.
Yeah, government gets control of the money.
Boom!
And it just catastrophically goes down in value.
This is why I'm saying we really got to start pushing back against this stuff, folks, because we all know where it ends.
So here's the frustrating thing, is that continually debasing the currency doesn't even help the government's finances.
So there's something called Gresham's Law, not about bad novels.
This is bad money drives out good.
So everybody knew that the older money was worth more.
So when the government comes and says, hey, come pay your taxes, what they do is everybody hoards the older coins and pays the tax bill in the newest junkie stuff, which is why the government stopped accepting it in the first place.
So this debasement, the government's real revenues, in other words, the actual amount of silver or economic value they were getting from taxes, may actually have fallen as a result of all of this debasing.
So again, they didn't want to raise taxes on ordinary Romans, because that's an admission that they're doing bad things, but what they did was they just handed out citizenship like candy.
We don't care what your values are.
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