Currency Debasement And Dilution
– by Zoltan Erdey
The concept of currency debasement is important for a Christian to understand. Debasement is the practice of lowering the value of currency. Over a number of decades, most central banks around the world have engaged in debasing their currencies for a number of reasons and in a number of ways.
Dishonesty led to their collapse
The Roman Empire serves as the first example of debasing their money. Since money was actual gold and silver coins, and not paper and ink, the Roman Empire reduced the purity of each silver coin enabling them to make more coins with the same face value for less silver and gold. When Christ walked the earth, a silver denarius was over 90% pure. In the days of Marcus Aurelius in around AD 170, a silver denarius was 75% pure. By the reign of Gallineus in AD 260, the silver content of a Roman denarius was around 5%; it lost much of its intrinsic value due to the removal of the silver. It is interesting to note that this debasement and dishonest money eventually played a major role in the collapse of the Roman Empire.
Inflation leads to worthless money
A more recent example is the US dollar, which was backed to some degree by gold until 1971. Since then, it has become a floating currency (not anchored to gold) and each dollar has worth by declaration or fiat only. The Federal reserve further debased the US dollar through ‘quantitative easing’ in recent years i.e. printing more dollars into circulation out of thin air. More money chasing fewer goods usually leads to inflation. And inflation leads to worthless money in the long-term.
Good stewards of our finances
Since we are required to be wise stewards (Psalm 24:1; 1 Cor. 4:2; Luke 12:42-46; 16:1-13), Christians should consider saving in silver and gold bullion to offset inflation in the future. Once in the possession of an ounce of gold or silver, no government organisation can debase it, dilute it, or print more of it. Surely, as good stewards, we can do more for the Kingdom in the future with real money that does not lose its value?
JOY! Magazine (August 2017)