To Rickards, a bureaucratized, debt-ridden modern empire looks worse than declining Rome

Posted: July 29, 2010 in Current Events, History

This is an interesting Jim Rickards interview on King World News comparing US to the Roman Empire.  The US is no doubt a declining superpower; in fact one can argue that our superpower status is over.  Looking at our “leaders” I don’t see how our superpower status will come back.  I love our country but like I’ve said in the past there is such a thing as reality, no matter how painful. 

The interview below is part 2 of the Rickard’s interview.  Part 1 briefly discussed the denarius which was the Roman Empire’s currency.  Similar to our government the Roman Empire stole wealth from their citizens by debasing their currency.  Initially the denarius was 100% silver before the wealth destruction began.  When the Roman Empire collapsed the denarius was only 5% silver which equals a 95% depreciation of the denarius.  The denarius had a silver plating to fool their citizens however 95% of the denarius was lead and copper.  Since the US removed the backing of gold from our dollar the purchasing power of the dollar has already declined 95%. 

Unlike the US, Rome did not borrow money, Rome used taxation.  Farmers were taxed at such a high rate they stopped growing crop, this caused food shortages in the 3rd century.  When farmers stopped growing crop the empire changed the rules and taxed farmers on what they could have grown.  When this policy was implemented farmers simply gave away their land.

Rome did cut spending accordingly from year to year.  If Rome foresaw revenues down over a course of a year they made adjustments in their spending.  The US strategy is to increase spending through borrowing money.  This strategy gives citizens the illusion that the economy is healthy until the country can’t borrow.

Like the US, immigrants flocked to Rome because of social welfare programs.  These social programs eventually became unsustainable.  Sound familiar?  When the barbarians entered Rome farmers welcomed them with open arms due to their out of control empire and high taxes.  The rest is history.

Unfortunately we are the modern Rome just far worse due to massive debt. When our debtors come to collect will the American People welcome them with open arms due to utter chaos in our society?  Yes that is a crazy question, however history repeats itself.   One thing is for certain when future generations look back on this generation they will think how were we so stupid to let this happen. 

Listen here for the full interview.

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