When the Credit of Paper Money Collapsed

Course number: C12

Supervised by: Mitsuru Hayama

Beyond the text: 11 exercises · 5 coins · 15 readings · 1 references　How reading times are calculated

You will also understand

• You can say why the same shape recurred over seven hundred years.
• Can explain the failure of the Mandats territoriaux as a "second piece of paper" structure.
• Can compare the post-war currency reforms (Lieftinck, Shin-en) as a "prescription of drastic medicine".

You can start this course without reading any other course.

Also worth reading, to see the connections (optional)

• Why can banknotes be used as money?
  What you learn: You can explain the difference between convertible and inconvertible notes by what happens at the window.

If you want to know more about checking sources (optional)

• Is It Really True? Checking History
  We re-examine the origins of money and famous anecdotes, comparing them with historical records and actual artifacts.

Assessment

11 exercises in this course (7 check, 1 compare, 3 written). Progress is recorded by self-assessment.

1. The first to burn was ChinaThe notes worked a hundred years before they burned. Paper burns not by its material but when the printer's circumstances change.
2. The second time was ParisThe paper printed to prop up the shares collapsed. And the memory of collapse does not prevent the next one.
3. The year the press became a weaponOver-printing is not the cause but the middle. Without asking why they had to print, you cannot see how to stop.
4. How to put out the fire — not with goods, with a promiseWhat holds paper up is not goods but a promise. And what burns is not the paper but the promise.
5. The Ceremony of Burning the Tools — Failure of the Second PaperEven after burning the printing plates in public, the second paper currency plummeted from day one. A ceremony cannot create credit.
6. A Drastic Prescription — Lieftinck and the New YenInvalidation of all banknotes and freezing of deposits. One week on a single ten-guilder note. The post-war settlement was carried out in a person's name.
7. The Astronomical Country — Zimbabwe and the Return of the FireAn annual rate of a hundred million trillion. A thousand years after the first fire, these conflagrations are still not a thing of the past.
8. Preventing the Fire — The Firewall of IndependenceSeparate issuance from the government and set a target for prices. This is the current fire prevention design, a lesson humanity learned from fires.

• Yuan · Dadu　Overview: the world　The monetary civilisation of the East　AD 1260
  §1. The scene where an economy of paper alone appears.
• The Runaway Jiaochao　Overview: the world　The monetary civilisation of the East　AD 1287
  §1. Its end. ⚠ Do not read it as "because it was paper."
• Rue Vivienne, Paris　France　John Law's bubble　1716–1719
  §2. The scene where Law founds his bank.
• The Banque Royale, Paris　France　John Law's bubble　1720
  §2. It explains why the system collapsed.
• France under Louis XV　France　John Law's bubble　1720–1789
  §2. The long distrust of paper that remained after the collapse.
• The occupation of the Ruhr　Germany　1923　Berlin, the banknote printing works
  §3. The centre of this course. It is written why they printed.
• The autumn of 1923　Germany　the autumn of 1923　A street corner, the way to the shops
  §3. The photograph of the handcart. ⚠ Consider also what the photograph does not show.
• The farmland and factories of Germany　Germany　The miracle of the Rentenmark　15 November 1923
  §4. The strangeness of the collateral being land.
• The morning market, the new paper　Germany　The miracle of the Rentenmark　1923–1924
  §4. The revelation: it was not goods but a promise.
• The Pengő, the Worst in History　Overview: the world　A history of inflation　AD 1946
  §4. The worst record in history. The names for the numbers run out.
• The paper they printed too much of　France　1796–1797　Place Vendôme, Paris
  Section 5. Trust Cannot Be Created by Ritual. The Record on the Second Sheet of Paper.
• The week of the ten-guilder note　Netherlands　September 1945　A liberated town, the ration counter
  Section 6. A Week with a Single Ten-Gulden Note. The Name Left on the Drastic Remedy.
• The Hundred-Trillion-Dollar Note　Overview: the world　A history of inflation　AD 2008
  Section 7. Fire Is Not Yet a Thing of the Past.
• Vaccination　Overview: the world　A history of inflation　the present day
  Section 8. The Blueprint Humanity Learned from a Thousand Years of Fires.
• Only gold coins are the yardstick　Greece　October 1944　A laboratory for posterity
  This stop re-measures the magnitude of the "fire" using three yardsticks: speed, position in the classics, and duration. After seeing how the rankings change with each yardstick, please re-read the "worst in history" sections of other stops.

• Inflation – lessons learnt from history — Deutsche Bundesbank　The hyperinflation of 1923. The currency ceased to function as a means of payment and store of value, and was replaced by the Rentenmark in November 1923.

The books and materials referred to in this course.