informationliberation
The news you're not supposed to know...




An Introduction to Austrian Economics: Understand Economics, Understand Everything
The Century of the Self: The Untold History of Controlling the Masses Through the Manipulation of Unconscious Desires
The Disappearing Male: From Virility to Sterility

The Obama Deception: The Mask Comes Off
Operation Gladio: The Hidden History of U.S. Sponsored False Flag Terrorism in EuropeThe New American Century: The Untold History of The Project for the New American Century
(more)
Article posted Mar 01 2012, 1:17 PM Category: Economy Source: The Dollar Vigilante Print

The Decline and Fall of the Roman Denarius

by Chris Horlacher

History repeats itself, so the scholars say. But according to Mark Twain it just rhymes. Literary quips and hair-splitting aside, I've found that one of the most valuable things anyone can do to advance their knowledge and understanding of the world is the study of history. Now I'm not talking about the kind of history you get in grade school and university, where all you're told to do is rote-memorization of people, dates and events. To get any value whatsoever out of studying history, you have to be able to discern cause and effect. What causes civilizations to grow to greatness, and what causes them to collapse?

There are few collapsed civilizations that have been studied in quite the depth as the Roman Empire. Many theories have been offered, some with more merit than others. Ludwig von Mises argued that Rome was eroded from within and that economics played a huge part in it. This is too big of a story for me to cover in a single article, so I will focus on one of the most important aspects; the currency.



For hundreds of years, the Romans were on a bimetallic standard, not unlike the currency system of the early United States. There was a gold coin, the aureus, which was popularized by Julius Caesar. There was also a silver coin known as the denarius, which was what most Romans used in their day to day transactions. It was on a solid gold and silver standard that Rome ascended to the height of its development and power.

One of the greatest enemies of mankind is hubris, and the Roman Empire was certainly not immune to this. The phrase "bread and circuses" refers to the massive welfare spending that occurred in Rome during the height of its power. With the treasury filled with gold, spendthrift politicians quickly used the money to buy influence, votes and curry favour with neighbouring states.
"The budget should be balanced, the treasury should be refilled, public debt should be reduced, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance." Cicero, 55 BC
When Julius Caesar first began minting large quantities of the aureus it was 8 grams of pure gold. By the second century it had declined to 6.5 grams and at the beginning of the fourth century it was replaced by the 4.5 gram solidus. The purity of the coin itself was never debased, but the ever decreasing weight was a sure sign that government spending had been outpacing revenues for centuries.

All of this however, pales in comparison with the devaluation of the denarius. The denarius was the backbone of the Roman economy. Citizens earning their income in gold were a rarity given that a day's wage for an average labourer at the time is estimated at a single denarius. Thus it also became the target of severe abuse by the Roman authorities.



The denarius began as a 4.5 gram silver coin and had stayed that way for centuries under the Roman Republic. After Rome became an empire, things began to turn sour for the denarius and, by extension, the Roman economy. Base metals, such as copper were blended in with the silver and so even though the coin itself weighed the same, the amount of silver in it became less and less with each successive emperor. Throughout the first century the denarius contained over 90% silver but by the end of the second century the silver content had fallen to less than 70%. A century later there was less than 5% silver in the coin and by 350 AD it was all but worthless, having an exchange rate of 4,600,000 to a gold solidus (or nearly 9 million to the original aureus).



The economic chaos the hyperinflation of the denarius had on Roman society was very real. The population of Rome reached a peak of about 1 million inhabitants during the first century BC and maintained that level until nearly the end of the second century. At this point it began to slowly decline throughout the third century and precipitously throughout the fourth. By the fifth century, only about 50 thousand people remained.

Now compare the collapse in value of the denarius to some modern-day currencies and see if you notice any similarities:









Further reading in to the events that unfolded in Rome (links below) will reveal that as the denarius was debased, Rome became an economic basket case. Desperate times called for desperate legislation as the fabric of society was slowly torn apart by inflation. I urge my fellow readers to gain a firm grasp of these events because they will be instructive as to what we can expect for the future. The destruction of the Denarius is only one example of currency debasement, of which there are hundreds. Romans that held on to their gold coins fared well in the hyperinflation and if history is any guide, they will serve us well in the coming years.

Further Reading


__
Chris Horlacher, CA is the Founder and Managing Director of Maple Leaf Metals Exchange Inc. He possesses a Chartered Accountant designation and is a former Senior Auditor for Deloitte & Touche LLP where he provided audit and assurance services to Fortune 500 companies, as well as independent businesses. He left Deloitte to aid Euro Pacific Canada Inc., an IIROC dealer-member, during its formative period by serving as Chief Financial Officer before founding Maple Leaf Metals Exchange Inc.

Reprinted from The Dollar Vigilante





Latest Economy
- Who's Afraid of the Workers' Revolution?
- Sports Stadiums: Temples to Crony Capitalism
- Obamacare Architect Says Society Would Be Better Off If People Only Lived To Age 75
- Elizabeth Warren Says US Has "No Future" If Free-Market Embraced
- Cost of Renouncing US Citizenship Goes From Free In 2010 to 450$, And Now It's Been Jacked to $2,350
- Colorado's Illegal Pot Market Thrives
- Neighborhood Bully - America Recklessly Throws its Weight Around
- Doug Casey on the Phil Donahue Show (1980/1981)









Comments Add Comment Page 1 of 1
Anonymous

Posted: Mar 01 2012, 9:39 PM

Link
88111 By far the largest public spending Rome had was on its army. It destroyed other cultures without learning from them, it suffered from conceit. It didn't value learning and didn't develop any new technology.


Add Comment
Name
Comment

* No HTML


Verification *
Please Enter the Verification Code Seen Below
 


PLEASE NOTE
Please see our About Page, our Disclaimer, and our Comments Policy.


FAIR USE NOTICE
This site contains copyrighted material the use of which in some cases has not been specifically authorized by the copyright owner. Such material is made available for the purposes of news reporting, education, research, comment, and criticism, which constitutes a 'fair use' of such copyrighted material in accordance with Title 17 U.S.C. Section 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. It is our policy to respond to notices of alleged infringement that comply with the DMCA and other applicable intellectual property laws. It is our policy to remove material from public view that we believe in good faith to be copyrighted material that has been illegally copied and distributed by any of our members or users.

About Us - Disclaimer - Privacy Policy



Advanced Search
Username:

Password:

Remember Me
Forgot Password?
Register

Video: Cop Arrests Subway Performer For Singing, Despite Cop Reading Aloud Rule Saying It's Permitted - 10/20Police Board School Bus To Seize Toy Gun From 6 Year Old - 10/04Video Shows Officer Coaxing Friendly Pets Closer With Kissing Noises Before Opening Fire - 10/20ISIS Cited as Michigan Village's Police Push for Secrecy - 10/20Reading the Road Map to a Police State - 10/20County Justifies Warrantless Raids Because Cannabis Plants Are An 'Immediate Danger' - 10/20Police Chief Says Secret Service Told Them To Fake A Warrant - 10/18FBI Director Demands Law to Give Cops Backdoor Access to Everyone's Private Data - 10/20

Rialto, CA Police Made to Wear Cameras, Use of Force Drops by Over Two-ThirdsCop Who Karate Chopped NY Judge In Throat Gets Off Scot-FreeFlorida Cop Smashes Compliant Woman's Face Into Car -- "Maybe Now You Can Understand Simple Instructions"VIDEO: Lapel Cam Reveals A Day In The Life Of A U.S. Police Officer (Tasing, Beating, Breaking & Entering, Stomping On Heads... and Laughing About It)Caught On Tape: Officer Sucker Punches Inmate In Face, Files Report Claiming 'Self Defense'Insult Person On Twitter, Go To JailSWAT Team Brings TV Crew To Film Raid Against Threatening Internet Critic -- Raids Innocent Grandma InsteadCop Karate Chops NY Judge In The Throat
(more)

 
Top