P03 The state pays for war
War expenses/Recoinage → Government bonds, central bank, public finance
What part of the monetary system does war test first?
The modern period is covered in the general history (wars and crises, the age of the dollar).
Four Steps
War is the first to test the limits of the monetary system.
Recoinage debases existing currency; government bonds borrow against future taxes. Their use of time is different.
Observing wartime currency reveals the weaknesses of the peacetime system.
⚠ When using the scale of war expenses to predict a currency crisis.
These are the four steps for going beyond "it's similar." The "limitations" step defines the point beyond which historical analogies should not be drawn.
Read at the Modern Money Stations
The modern stations for this structure are covered in the general history (The Age of Wars, Crises, and the Dollar).