The second French hyperinflation

I recently read the very short Fiat Money Inflation in France, about the destruction of the French paper currency around the time of the French revolution. What's interesting about the book is that the author does not denounce the French politicians as total morons. He takes care to show that these politicians started out printing money quite cautiously and thoughtfully. But, as I have said before, when you print more fiat currency you actually reduce the true value of the currency in circulation, exacerbating the deflationary problems in the economy. The people then begin to demand new currency, and yet new currency soon makes the troubles more severe, resulting in another round of demands for more currency. And so it went in France, until the assignats were nigh worthless and the economy was decimated.

As the author writes on pp. 73-74:

The question will naturally be asked, on whom did this vast depreciation mainly fall at last? When this currency had sunk to about one three-hundredth part of its nominal value and, after that, to nothing, in whose hands was the bulk of it? The answer is simple. I shall give it in the exact words of that thoughtful historian from whom I have already quoted [Von Sybel]: "Before the end of the year 1795 the paper money was almost exclusively in the hands of the working classes, employees and men of small means, whose property was not large enough to invest in stores of goods or national lands. Financiers and men of large means were shrewd enough to put as much of their property as possible into objects of permanent value. The working classes had no such foresight or skill or means. On them finally came the great crushing weight of the loss. After the first collapse came up the cries of the starving. Roads and bridges were neglected; many manufactures were given up in utter helplessness."

To continue, in the words of the historian already cited: "None felt any confidence in the future in any respect; few dared to make a business investment for any length of time and it was accounted a folly to curtail the pleasures of the moment, to accumulate or save for so uncertain a future."

In both Weimar Germany and revolutionary France, historians write about hedonism and impulsiveness, "loose morals" and rising crime. Take away the ability to plan for the future, and the society begins to disintegrate.

Today, however, people of very modest means have some ability to protect themselves, because junk silver is cheap and is available in very small denominations. It usually sells for something like 11-12 times its face value. So a 90% silver dime from before 1965, with a face value of 10 cents, could be bought for a little more than a dollar. A roll of such dimes, worth $5 in face value, could be bought for $60 or less. Furthermore, if the worst happens and you need to acquire food using silver, it's those little dimes you want.

Google a coin shop in your area and get yourself some silver. Remember the line "The working classes had no such foresight or skill or means." But you do have the means... you just need the foresight.

Coin shops near Mount Clemens
Coin shops near Winter Park
Coin shops near Ann Arbor