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0 sats \ 4 replies \ @Undisciplined OP 13h \ parent \ on: Inflation: Slowly the Middle-Class Dies econ
I know they wrote about the dangers of both fiat money and democracy but did they write about why the two are especially dangerous together?
Also, the paper money they had in mind was still paper money backed by gold/silver. I'm not sure they even conceived of the idea of totally unbacked fiat currency. It would probably blow their minds what we're doing today.
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I don't think that's true. I think Free Banking was alive and well during that time, and Jefferson-et-al had no problem with that. They were specifically speaking out against central banking using unbacked fiat currency. It wasn't paper money they had a problem with, even back then.
The Creature from Jekyll Island is a must read.
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I believe they were aware of the dangers of unbacked fiat currency. It wasn't widespread at the time, but there had been previous historical instances of it.
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Just from my memory, I believe their biggest concern was trust. For Democracy to work, the people have to have transparency of government. They talked about fiat-currencies making trust more difficult.
I asked ChatGPT for a few quotes to help back me up. I was a bit disappointed in the quantity and quality of them. Perhaps they weren't as outspoken about it is I'd thought. I read that Jefferson became louder about it much later, during the 1810's.
“The pestilent effects of paper money on the necessary confidence between man and man, on the necessary confidence in the public councils, on the industry and morals of the people…”
— Federalist No. 44 (1788)
“Banks have done more injury to the religion, morality, tranquility, prosperity, and even wealth of the nation than they can have done or ever will do good.”
— Letter to Thomas Jefferson, 1819
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