Thursday, September 28, 2023


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“There is a great deal of ruin in a nation” - Adam Smith, 1777

 Recently there has been a noticeable uptick of “Roman Empire” scuttlebutt on the socials, which wouldn’t be all that interesting except for the fact that in this instance, it appears as though there is a significant effort being made to somehow associate the act of “thinking” about the “Roman Empire” with manhood and men’s supposed preoccupation with concern for the unwind of the United States.

A comical example was from “Eva Vlaardingerbroek” who wrote:

There is some “Freudian thing” happening here for sure and I, for one, believe that her father was being far more honest… that being said, in a world awash in fanciful narratives, and in particular, narratives concerning impending hyper-inflationary financial doom for the United States, one shouldn't get too carried away.

It's important to remember that hyperinflation is not simply “lots of inflation” coming as a result of the mismanagement of purely monetary factors, but instead a far more fundamental and total loss of confidence in the institutions of the state and the financial system.

While hyperinflation typically arises from a combination of familiar calamities such as severe economic crises, political instability, and loss of confidence in currency as a result of excessive money printing to finance large budget deficits or in response to external shocks like war or other exogenous events, the scale of such numerous ruinations and the credibility of the nation in question make all the difference.

There is no doubt that the United States will ultimately visit such a condition eventually, particularly given the lowly course we have chosen to chart these last many decades, but the real question, as perennially posed, is when?

While our historical understanding of “The Fall of the Roman Empire” provides a lot of information to work with when drawing superficial parallels to today’s seemingly endless political theater and economic dramas, it is noteworthy to consider that this is not a new exercise in our public discourse.

A cursory dive into the newspaper archive yields a couple of interesting articles (reprinted here in their entirety from The Minneapolis Representative on July 12, 1893) detailing the monetary concerns of that time:

Clearly on matters of money and arguments over monetary standards, metal or otherwise, the “Fall of the Roman Empire” serves the purpose of providing a powerful historical account of a dramatic end to a once great civilization and thereby a potent lesson for similar issues in the storyteller’s place and time.

Note also that in the first of the two articles above, the “Fall of the Roman Empire” theme is, ironically, being leveraged to make the radical argument to put an end to metalism in favor of a purely “numerary” unit of account, the precursor argument that ultimately led to the “fiat” world we find ourselves in today.

As it turned out, while much of the latter half of the nineteenth century was spent debating metalism, commodity gold and silver backed standards as well as other supposedly modern “scientific” approaches for a monetary standard, it was not until 1913 that we finally organized an institution, namely the Federal Reserve, that could possibly cultivate enough hubris to actually justify a move in the direction of a “fiat” standard.

Even then though, it took another 58 years, a period containing two epic world wars, several lesser wars and a massive depression, before the state ultimately cut the final cord (just a single thread by then) tethering our financial system to a metal-backed monetary standard with the Nixon administration’s now infamous “temporary” move back in 1971. (including support from Paul “the inflation slayer” Volcker prior to his famous Fed Chairmanship by the way)

Fast forward another 52 years that included nearly two decades of inflationary hardships, numerous recessions, a vast campaign to defeat our major “cold war” rival, multiple significant wars in the Middle East and many lesser elsewhere, a steadily mounting Federal debt built by ever more preposterous budget deficits and a Federal Reserve seemingly continuously paying-out larger and larger portions of its valuable credibility in an effort to underwrite the next and progressively more extensive “stability”-inducing bailout of the economic system, and we are only now just coming to common conclusions of the downsides of our “fiat” system.

Given all that has been recounted above, it could seem as though real “ruin” has finally arrived and that we are on the precipice of the “big one”, the final tipping point into a hyper-inflationary tailspin engulfing our entire financial system and destroying the future for millions.

Yet, even the ancient Roman Empire didn’t fall overnight as its influence spanned roughly 1000 years and required multiple centuries of debasement and devolution to fully erode thereby ushering in the terrible period of the “dark ages”.

By comparison, the United States Empire is orders of magnitude more significant a world (military) and economic power than the Roman Empire ever was and will take far more significant devolution to sully itself into past-empire status than any naive monetary-focused narrative suggests.

The key point is that hyperinflation is (almost) all about credibility… as long as the United States is unquestionably the dominant global military and economic power, hyperinflation is not a likely end-state.

That said, persistent periods of typical and even deeply entrenched and uncomfortably high inflation dotted with bouts of deflation coming as the repercussions of 35 years of the Federal Reserve's monetary mismanagement unwinds against the backdrop of the Federal Government’s hyper-dysfunctional and counterproductive political process, are absolutely to be expected.

This era, that I previously termed The Great Agitation, will continuously feel like “the end is nigh” as our financial and political systems reflect a new degree of volatility coming from the continuous recognition of the cost of the vast liabilities we have allowed to accumulate.

Will this era truly mark the end of the United States Empire as is suggested by the supposedly vast number of “men” who are apparently preoccupied with “thinking” about the Fall of the Roman Empire?… I wouldn’t bet on it.