QUESTION: Hi AE, et al. Your blogs not only inform, but are actually entertaining as they give most of us a point of view we’ve never before contemplated.
My question….you have stated numerous times that one of the reasons the Roman government survived for 100’s of years is because they simply created currency, as needed, instead of borrowing (gov’t bonds) as they do today. But their currency was mainly silver, which possessed at least some intrinsic value, as opposed to today’s digital, key-stroke variety.
The only public figure I can think of, with whom I would entrust such easy access, might be Thomas Jefferson. Human nature being what it is, corruption would be as inevitable as it is today.
To many of us, currency without some intrinsic value, just doesn’t make sense. Too much temptation. Would love to hear a more fulsome reply, with your thoughts on this subject. All of us here deeply respect what you are doing.
ANSWER: All currencies today are still backed and are not intangible. Now, that statement may provoke thousands of emails. But the value of any currency has NEVER been its intrinsic value even throughout history. Proof of that statement is the fact that the surrounding economies to the Roman Empire imitated the gold and silver coinage of Rome for a single reason — the coins were accepted and regarded as more valuable than their intrinsic value simply in metal content.
Here is an imitation of a gold aureus of Rome struck in India. The weight of the gold was even greater than that minted in Rome. India routinely imitated Roman coinage from the reign of Tiberius (14-37 AD) to Gordian III (238-244 AD). Obviously, India had gold but the coinage of Rome carried a premium. There would have been no other reason to imitate Roman coinage if the monetary system was purely intrinsic.
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