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Today’s RANT is inspired by an article about the Mongol Empire of the 13th Century, demonstrating how civilians openly revolted against the imposition of an unwanted, unjust fiat currency system, upon penalty of death – and succeeded!  I’m sure this is not the only such instance throughout history, and probably quite common in societies utilizing specie as MONEY when their overseers commandeered it in favor of paper chits.

Withholding Consent from the Khan

Even in the 13th century, evidence of failed fiat experience was plentiful, starting with China, which experienced the world’s first fiat-driven hyperinflation more than 1,000 years ago.  Not once but twice China watched entire kingdoms jeopardized by paper currency, and the same issues that destroyed them then are the same ones doing so today.
The Song Dynasty in China was the first to issue paper money, jiaozi, around the 10th century AD. Although the notes were valued at a certain exchange rate for gold, silver, or silk, conversion was never allowed in practice. The notes were initially to be redeemed after three years’ service, to be replaced by new notes for a 3% service charge, but, as more of them were printed without notes being retired, inflation became evident. The government made several attempts to support the paper by demanding taxes partly in currency and making other laws, but the damage had been done, and the notes fell out of favor.
The successive Yuan Dynasty was the first dynasty in China to use paper currency as the predominant circulating medium. The founder of the Yuan Dynasty, Kublai Khan, issued paper money known as Chao in his reign. The original notes during the Yuan Dynasty were restricted in area and duration as in the Song Dynasty.  However, in the later course of the dynasty, facing massive shortages of specie to fund their ruling in China, the Yuan Dynasty began printing paper money without restrictions on duration. This eventually caused hyperinflation. By 1455, in an effort to rein in economic expansion and end hyperinflation, the new Ming Dynasty ended the use of paper money.
In the case of the Mongols, evil overlords such as King Rinchindorji Gaikathu, frivolously wasted the kingdom’s Treasury and thus needed capital to prevent bankruptcy.  Upon the advice of his bankers, he confiscated all publicly-owned gold and silver coins, issued worthless currency notes in exchange, and banned specie as a monetary medium under penalty of death.  Unfortunately for Gaikathu, the citizenry understood full well what he had done, and within months the scheme had not only failed, but Gaikathu hanged.

Of course, numerous MODERN cultures have been destroyed by paper currency, the stories well-documented but largely ignored.  The most infamous example is 1922-23 Weimar Germany, caused by the onerous war reparations imposed by the Treaty of Versailles, but many other nations have lost the unwinnable battle with fiat currency as well.  In Germany, here’s what happened to the Reichsmark in terms of the U.S. dollar (which was gold-backed at the time)…

In 21st century America – and Europe, Asia, Africa, etc. – citizens have never owned PHYSICAL gold and silver, nor experienced a society void of inflation.  Most – but not all – have not experienced hyperinflation first hand, so the Federal Reserve’s 99-year policy of “boiling us like lobsters” has worked.  Due to the entire world’s willingness to foster the greatest PONZI SCHEME of all time – the U.S. dollar – it has still retained some semblance of value, albeit just 2% of what it was when the Fed was created a century ago.  The majority of the world’s population doesn’t realize that 30 years ago, one income could support a four-person family, or that milk and gasoline cost under $1.00/gallon.

…and here’s what happened to gold and silver, keeping up with the decline in the mark’s value tick for tick.  By the way, please notice the 10:1 gold/silver ratio over nearly the entire period of hyperinflation.

Going through the annals of recent history, I expected to find just a handful of hyperinflationary breakouts, but was shocked (even for ME) to find instances in 31 different countries, including several with multiple occurrences, per this Wikipedia file:

Hyperinflation – Wikipedia

Below are the most rampant modern examples of monthly hyperinflation in the 20th Century…

Highest monthly inflation rates – 20th Century

Country

Currency name

Month with highest inflation rate

Highest monthly inflation rate

Equivalent daily inflation rate

Time required for prices to double

Hungary Hungarian pengő July 1946 4.19 × 1016 % 207.19% 15 hours
Zimbabwe Zimbabwe dollar November 2008 7.96 × 1010 % 98.01% 24.7 hours
Yugoslavia Yugoslav dinar January 1994 3.13 × 108 % 64.63% 1.4 days
Germany German Papiermark October 1923 29,500% 20.87% 3.7 days
Greece Greek drachma October 1944 13,800% 17.84% 4.3 days
Taiwan (Republic of China) Old Taiwan dollar May 1949 2,178% 10.98% 6.7 days

…and here are all examples in that period.  Notice how many instances occurred in the last 20 years, and how hyperinflation is not partial to time, region, or even event.  Sure there were some hyperinflations resulting from war (such as World War II) or national reorganizations (such as the breakup of the U.S.S.R.), but there are just as many that simply occurred because greedy, immoral politicians printed too much money.  Argentina, Brazil, China, Mexico, and Russia are just a sampling of the guilty, and this table ONLY refers to the past 90 years.

20th Century Hyperinflations

Overall hyperinflation impact

Nation

Year(s)

One original currency unit = x hyperinflated units

Angola

1991-95

1,000,000,000

Argentina

1983-92

1,000,000,000

Austria

1922-23

500,000

Belarus

2000-08

100,000,000

Bolivia

1984-86

1,000,000

Bosnia/Hergezovina

1992-93

50,000,000

Brazil

1967-94

2,750,000,000,000,000,000

China

1948-55

15,000,000,000,000,000,000

Georgia

1993-95

1,000,000

Greece

1944

50,000,000,000,000

Hungary

1922-24

n/a

1945-46

400,000,000,000,000,000,000,000,000,000

Mexico

1982-92

1,000

Nicaragua

1987-90

50,000,000,000

Peru

1988-90

1,000,000

Phillipines

1942-44

100

Poland

1921-24

1,800,000

1989-91

10,000

Romania

1990-98

5,000,000

Russia

1992-98

1,000

Taiwan

1944-49

4,000

Ukraine

1993-95

100,000

U.S.S.R.

1921-22

n/a

Yugoslavia

1989-94

1,300,000,000,000,000,000,000,000,000

Zaire

1989-96

300,000,000,000

Zimbabwe

2000-08

10,000,000,000,000,000,000,000,000

If I were to create a hyperinflation table covering all of history, it would be perhaps 100 times longer.  It would include two instances from the United States alone (the Continental and Confederate Dollars), and had the Civil War gone on another year, the Northern “Greenback” would have been a goner as well, care of everyone’s favorite President, Abraham Lincoln.  It was also would include instances in five of the G-7 nations, most of the G-20, and some of the most famous civilizations in global history, including Ancient Egypt, Greece, and Rome!

Global Hyperinflation Histories

Charting The Non-Linearity Of Hyperinflation, And Predicting America’s Future Courtesy Of Ancient History

When I started writing this RANT, I intended to solely discuss the experience of the 13th Century Mongols.  As usual, my writing took on a life of its own, so the final product presents a quite broad depiction of mankind’s FIAT FAILURES of the past 3,000 years.  The problem with fiat currency was the same then as it is now – it is inherently worthless, i.e. holding ZERO INTRINSIC VALUE.

Hyperinflation does not require an event to cause it – such as a war – and it certainly does not require catastrophic economic conditions.  It is fomented by careless politicians and bankers, and catalyzed by the loss of public CONFIDENCE engendered by mass realization of said worthlessness.  Just as it happened then, it will happen now – only this time, on the GRANDEST SCALE IN WORLD HISTORY, care of the most diabolically destructive currency PONZI SCHEME of all-time, the global U.S. dollar reserve standard.

The only question is what catalyzes the imminent, catastrophic loss in CONFIDENCE.  Could it be U.S. debt surpassing $16 trillion?  Or the collapse of Greece?  Or warfare with Iran?   Only time will tell, and not much time at that.

PROTECT YOURSELF, and do it NOW!