Sunday, March 19, 2006

Imperial Empires, tyrants and copper in the coin...

Nero directed that new gold and silver coins be issued bearing a different image of himself with a significantly changed metallic content. Nero probably had several reasons for taking this action. The first is a political rather than an economic reason. The coinage was an extremely useful means of propaganda. At the time of the Early Roman empire the means of propaganda, intended to reach the common people, were limited. They included, in addition to the coinage, only such things as games, statues, buildings, and, of course, word of mouth. Thus, the coinage became the TV commercial and the newspaper ad of the ancient world.
On his new issue of coins, Nero announced his assumption of the imperium in two ways. First, he usually appears on the new coins with his head wreathed with laurel. His new representation with the laurel wreath is in contrast to Nero’s earlier issued coins on which he appeared with a bare head—an indication of his lack of concern for power. Second, the imperial gold and silver coins no longer bear the legend EX S.C. [the mark of the Senate] [...]
It [the legend EX S.C.] is one evidence the more of the reality of the senatorial restoration during Nero’s early years; it is not surprising to find that after the reform it disappears once and for all.
[A] striking parallel might be drawn between the actions taken by Nero and those taken by Franklin D. Roosevelt in the U.S. depression of the 1930’s.
Prior to the date of Nero’s reform of the coinage, the aureus contained 122.9 grains of gold. Nero’s new aureus contained but 114.1 grains. Thus, he was able to get 45 aurei out of a pound of gold rather than the 42 previously yielded. This represents an expansion of the government’s money supply by 7%. In a similar manner, the silver denarius was reduced in metallic content from 61.46 grains to 52.68 grains. In this way, an additional 12 denarii over and above the original 84 to the pound were obtained. This is an even greater devaluation (14%) than Nero got from the reduction in metallic content of the aureus. In addition, Nero put a 10% alloy of base metal with his silver. Whether this last step was taken to hide his sharp practice, or merely to reduce the wearing which occurs with pure silver, is not clear. If Nero had intended to deceive the people he would have wanted to keep the size of the new coin similar to that of the older ones. The alloying made this possible through preventing a marked change in the size of the coin.
When Nero added the alloy to the silver, debasement of the coinage became a reality in Rome. Nero’s debasement of the coinage is truly an innovation. It is the first of a long line of efforts to be made by succeeding emperors to make income stretch to meet outgo. Nero’s debasement of the denarius had a surprising result. The denarius was accepted as fiat money rather than as bona fide money. "Today, all American currency and coin is essentially ‘fiat’ money. It is money because the government decrees it is money, and because we all accept it." Bona fide money, of course, is money which is equal in value to the value of its metallic content. The acceptance of the new Roman silver coins without the disappearance of the old is a contradiction to Gresham’s law which says that the better coins ought to disappear. Usually this happens in two ways: they are melted down or they are exported. The coins were not melted down at Rome. The new coins circulated along with the older coins.” As might have been expected, however, Nero’s success at creating fiat money was restricted to its use domestically. Nero could get his money accepted in Rome but foreign governments would not go along with such practices. India offers a good example of the reluctance of a foreign government to accept the fiat money of another nation. We have evidence, through hoards, that indicates that although the Romans did export gold coins to India after the year A.D. 64, the silver denarius was no longer found in the Indian hoards. “The lack of post-Neronian denarii and the presence of post-Neronian aurci in the hoards in India is a sign that only the metallically better coins were exported from the Empire to India.”
(Nero's New Deal
by Mary Elizabeth Kelly Thornton
Transactions and Proceedings of the American Philological Association, Vol. 102. (1971), pp. 621-629)

That liar and pervert Nero was just trying to feed the poor, see.

Money is language, a statement of value and judgment. Socialists are trying to say that you can get something for nothing, which is a lie. This is why they prefer the Darwinian creation myth in which everything comes from nothing.

The same thing happens to money when liars use it as when they use other forms of language. It is emptied of meaning and value. Render unto Caesar, for his symbols and signs are rather meaningless in the end.

On a side note, fortunately for Americans other nations did accept the currency of the American Empire. You can be quite fortunate if you work yourself into a position to write your own fortune, I suppose. Yet other nations have told lies and probably would even more than the U.S. if they could. For all its evil I would still argue that the American Empire is the most benevolent to have ever existed. Think on it, would you prefer a Russian Empire, French Empire or perhaps a Chinese Empire? And what of the old Empires, how do they compare? Listening to Leftists like Chomsky one would think that the world would be better off without the American Empire entirely. But all the Left really seems to be doing is working to ensure that a different and more malevolent Empire will rule, whether it is American or not.

(E.g., I ask one of those type of Leftists to write a critique of different rulers and instead I get them pointing out that what I just pointed out is a good argument. Yeah. Well, another good thought experiment for them would be to think about what would happen if the American Empire's rather vast powers decreased so that America had to be more united with other nations. Then they get what they want and the supposed Big Bully is gone. But now what? I suppose that the U.N. will then lead the world?)

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