Marc's Note: When you visit Italy often, as I do, you are constantly reminded of just how big and immensely wealthy the Roman Empire was. In just one palace, you might find marble in deep honey from North Africa, another in serpentine green from Egypt, or bright red from Greece. When you consider all this was extracted, packaged, and shipped across the world 2,000 years ago, you begin to realize just how mind-bogglingly wealthy Rome was. In the essay below, MarketWise CEO Porter Stansberry shares his perspective on America's parallels to Rome today and why he thinks we're heading down a similar path. I highly recommend you read it...
Dear Reader, This isn't a story about Rome... It's a story about America. Rome's power was generated by its trading system. Rome was the first "global" economy – the largest market ever created to that point in history, united by a single currency, the gold aureus coin. Rome's currency, its language, its roads, and the peace enforced by its legions, enabled, for the first time ever, the known world's markets to be united through trade. This unleashed an unprecedented amount of wealth, as every region's competitive advantages were unlocked. Much the same occurred under the gold standard, which was established by Sir Isaac Newton in 1717. As the British Empire spread across the world, Britain's gold guinea became the world's currency, uniting the entire world in a productive system of trade. Industrialization (railroads, steamships) and the repeal of Britain's protectionist "corn laws" in 1846 led to unfettered access to the world's markets. The resulting economic boom saw London's population grow 20% per decade. By 1900, Greater London (200 square miles of urban and suburban development) had a population of almost 10 million people, making it, by far, the largest and most prosperous city in the world. And its Empire was, by far, the most powerful the world had ever seen. After World War II, this global economic system continued, despite Britain's bankruptcy, with the Bretton Woods Accord, which placed the U.S. dollar at the center of the world's economy. Result: New York City overtook London as the world's largest and richest city. See the pattern? Sound money and free trade equals wealth and prosperity. Likewise, inflation, war, and protectionism lead to collapse. Which will we choose? As you know, Nixon repudiated the Bretton Woods Accord and defaulted on our obligations in 1971 as he sought to finance foreign wars while building the modern welfare state. That began our path to devaluation, debauchery, and collapse. Was Biden America's Nero? Nero was a besotted, doddering, corrupt, avaricious, and immoral fool. And like Nero, Biden's "Inflation Reduction Act" dramatically accelerated the destruction of our Empire. This has all happened before... Under Nero, the aureus gold coin was reduced from 8.0 to 7.2 grams of gold while the denarius silver coin was similarly debased from 3.9 to 3.41 grams of silver. As should be obvious to even the most casual observer of history or economics, devaluing the currency reduces real wages, reduces the burden of government debt, and provides still more money for additional government spending... which leads to still more inflation. It also sets in motion a highly destructive, reflexive (self-reinforcing) cycle of popular anger, price controls, and further debasement. It is pathetic that anyone at the Federal Reserve continues to espouse any surprise at the cause of inflation. It was never a mystery. As Rome continued to debase its coins, its society, which once dominated the known world, began to fall apart. - Under the reign of Caracalla (215 AD) the gold content of the aureus coin was further reduced to 6.5 grams.
- And then, under Diocletian (AD 290) it was shaved again, to 5.5 grams.
- Later, Diocletian simply started over with the "solidus" – which was only 4.5 grams.
Rome hit rock bottom. But there was hope... A year after Diocletian abdicated, Constantine "The Great" took power. He was, notably, the first Christian Emperor. And, beginning in 312 AD, he began minting huge quantities of the solidus – without debasing it further. He also "drained the swamp" – by moving the capital of the empire to Constantinople. Rome would soon collapse as its bankrupt emperors could no longer pay for the mercenaries needed to protect it from Germanic tribes. Meanwhile, Constantinople continued to flourish for another 600 years. So... how might that happen here...? ...Imagine if our next president decided to adopt gold or Bitcoin as America's reserve currency, making it legal tender while mandating banks back their deposits with it. ...Imagine if they "drained the swamp" permanently by moving the federal seat of power from D.C. ...Imagine if they demanded a balanced budget, starting immediately, and based government expenditures on a percentage of the economy that we can afford (like 10%). ...Imagine if our next president demanded the return of all U.S. troops and shut down every foreign military base. And... imagine if, instead of taxing foreign trade, if they eliminated all barriers to trade. If those things happen... America will become an even greater nation and, like Constantinople, we will see hundreds of years of additional prosperity and wealth like we cannot imagine today. Will these things happen? No way. What will happen instead? More government debt. More inflation. More barriers to trade. More war. More poverty, and, eventually, a complete collapse of our society. What can you do about it? I recently sat down to explain what I'm doing personally, which anyone can do. If you're interested, simply click here. Regards, Porter Stansberry
CEO, MarketWise | 
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