🥷🏽Marco🥷🏽

The oldest financial trick in history is being used on you right now. Ancient Rome couldn't stop using it either, and it played a part in bringing down the whole empire... For two hundred years the Roman denarius was one of the most trusted coins in the world: under Augustus it was struck from silver that ran around 95% to 98% pure, a small disc of real metal that a soldier or a shopkeeper could hold and believe in. It held its value across the whole Mediterranean because there was something genuinely valuable inside it. Then the emperors discovered a trick that every government since has been tempted by. If you melt down the coins, mix in a little cheap copper, and mint them again, you get more coins out of the same silver. To the eye, nothing has changed. The face on the front is the same. But now the state has more money to spend, and it costs them nothing to make. Nero began it after the great fire of Rome in AD 64, dropping the silver to about 90%. It was barely noticeable, which was precisely the point. But once the door was open, no emperor could resist walking through it. Each one who needed to pay the army or fund his ambitions shaved off a little more. By the reign of Septimius Severus the denarius was down to about half silver. His son Caracalla went further, and by the time of Gallienus in the 260s the coinage that had once been nearly pure held around 5% silver. It had become a copper token dipped in a thin silver wash, and everyone knew it... The result was exactly what you would expect, and exactly what we fear today: prices spiraled. The more coins the mint stamped out, the less each one was worth, and the cost of everything climbed to catch up. Trust in the money collapsed so completely that soldiers began refusing to be paid in it and demanded grain and goods instead. The same thing is happening to your money right now: according to the U.S. Bureau of Labor Statistics, the dollar has lost more than 96% of its purchasing power since 1913, the year the Federal Reserve was created. What a single dollar bought then takes more than thirty dollars to buy today. The coin was silver and the modern equivalent is paper, but the pattern is the same that ate the denarius: a slow, relentless erosion of value that the people holding the money can feel but cannot stop. Keynes called it by its real name: theft. "By a continuing process of inflation," he wrote, "governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens." And Milton Friedman put it even more bluntly: "Inflation is the one form of taxation that can be imposed without legislation." This is one of the most important lessons Rome has to teach: a currency almost never dies in one dramatic stroke, it is always worn away a little at a time by rulers who tell themselves that this once, in this emergency, it will be fine, and by citizens who do not notice until the coin in their hand is copper wearing a thin coat of silver. As Ludwig von Mises, who watched the great European currencies collapse in the twentieth century, put it: "Government is the only agency that can take a useful commodity like paper, slap some ink on it, and render it totally worthless."