Gresham’s Law: An Important Monetary Concept

How bad money chases out good.

We live in history, which is unfolding before our eyes.

Future historians will look back on this time as when the dollar got away from-the FED and the US government. This will go down as a tipping point and the covid response will be the “reason why” when many will question whether that is why the governments around the world collectively responded the way they did.

Gresham’s law is and important monetary concept to help you understand Bitcoin, gold, silver, monetary history, and how this is happening right i front of our eyes in 2021.

Source: The 7th Property

"The Roman Republic and Empire was fraught with monetary debasement and controls. Driven by the need to finance their lavish spending on the military and various luxuries, coin clipping when minting their currency became a common practice. In fact, the origin of the word “mint” is from the Roman temple of Moneta where currency was manufactured. Juno Moneta was the personification of money in Roman culture. This is how the English words “Money” and “Monetary” came to be. 

In the late republic and early empire, the standard roman coin was the silver denarius. Its value had been gradually reduced prior to Diocletian, as emperors issued tin-plated copper coins and still called them denarii. Gresham’s law, which states that as bad money is introduced into circulation, people will naturally begin to hoard good money, became the norm. People hoarded their gold and silver as best they could. 

During the period ending with Claudius Victorinus in 270 A.D., the silver content of the denarius fell to one five-thousandth of its original level, and at this point the monetary system had lost its bearings. Trade was reduced to barter, and economic activity collapsed, nearly destroying the middle class.6 When Diocletian assumed the throne in 284 A.D., the prices of commodities and wages had reached all-time highs. De Moribus Persecutorum, a surviving source, blames government spending on armed forces and the commensurate increase in taxation; Diocletian blamed the merchants (the most common scapegoat in centuries to come). 

The classical historian Roland Kent in the University of Pennsylvania Law Review echoes this sentiment, naming inherited economic instability and lavish spending to be the sources which caused economic collapse and destructive taxation. Most likely, the salient cause was the debasement of the currency (more on this later)."

Colin Stuckert

Better HUman PodcasT, Free HUmans & Free Markets Advocate, Father, Human
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