We Have Seen This Play Before

Courtesy of Hugo Salinas Price @ Fekete Research:

Ambrose Evans-Pritchard in “The Telegraph” (The Telegraph, April 2, 2014†) is quite worried about deflation in the Eurozone; he says it may become entrenched, which would lead to economic disaster for Europe.

What we are seeing is a repeat performance, on the world stage, of a previous failed experiment with fiat money, as documented by Andrew Dickson White, in his classic book: “Fiat Money Inflation in France 1790 – 1797”, reprinted in 1933, when a great believer in monetary tinkering was just getting started.

In Revolutionary France, the French National Assembly gathered together the best and brightest men in France. They were the leading lights of the time. As worshippers of the goddess Reason, they could not for the life of them understand why human reason should not be able to devise an artificial money which would make the French economy function to perfection.

image

At the time, there were opponents to the idea of floating a new, artificial currency, to be named the “Assignat”. They pointed out the disastrous consequences of the prior French experiment with artificial money, launched in 1720 by the highly intelligent Scottish adventurer, John Law. But like those of us today, who are convinced that the present monetary dispensation will end in a huge world disaster, they were out-debated by those who represented the dominant spirit of the time. Continue reading