Doug Casey on Currency Debasement and Cultural Degradation

You can tell a lot about a country and its culture from the quality of its money. From Doug Casey at internationalman.com:

International Man:  How instrumental do you think the debasement of their currency was to the eventual fall of the Roman Empire? How did it affect their culture?

Doug Casey: In ancient pre-industrial societies—just like today—you became wealthy by producing more than you consume and saving the difference.

One of the best things about money is that it allows an individual to set aside capital, the product of his labor, in a form that retains value. A farmer, for instance, can’t save fruit from year to year, nor can a baker save bread. Sound money is critical for lasting gains in wealth and economic progress. Sound money is why wealthy societies become dominant, and a reason other societies are poor and ripe for conquest and domination.

Rome provides a meaningful long-term template. The Roman government, in search of revenue, started debasing the denarius under Nero in the 1st century, taking it from 90% silver to 75%. As late as the reign of Marcus Aurelius, which ended in 180, the denarius was still about 75% silver. By the end of the 3rd century, it was pot metal that was simply plated with silver. The 3rd century was notable for numerous coups, civil wars, assassinations, and secessions. There are plenty of reasons political chaos goes hand in hand with economic chaos; they reinforce each other.

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