Ditch the US Dollar Before It’s Worthless
Take a lesson from the French kings: currency debasement doesn’t end well
In the early and mid-twelfth century, the kings of France had a major problem: They were profligate money-spenders, their debts were piling up, and they had no efficient way to tax their subjects to pay for it all, thanks to a mostly agrarian economy and decentralized money in the hands of baronies, duchies, principalities, religious fiefdoms, and village market economies.
Luckily for them, centralized money-printing was on the rise.
By the late thirteenth century, the French kings possessed the sole right — the monopoly power — to mint the coinage of the realm. At the time, silver was the metal of choice for higher denominations, with bronze and alloys for the smaller stuff.
In a fair world, $100 worth of silver would be minted with the word “$100" on it. The people would spend it into the economy, with a transaction tax to finance democratic expenditures.
Instead, the French kings instituted a vile practice called seigniorage — they assigned far higher values than the actual coins were worth. Instead of stamping “$100” on a coin worth $100, medieval kings simply sent out an edict saying the big silver coins were worth, say, $100 in legal tender.
