Debt in l´histoire: how it ends?

The ticket Board
The ticket Board

For several hundred years States s´endettent (policy stimulus, for example), and we will see through this article how this ends at the moment the State is ruined. See various possible scenarios as l´histoire to restraint, especially at l´heure where the Greece will vote for or against l´acceptation of the restructuring of its debt.

From St. Louis, the France finance tend to be in the Red (born 25 April 1214 at Poissy, the King ascended to the throne under the name of Louis IXà the age of twelve.) He ruled nearly forty-four years until his death outside Tunis, August 25, 1270. ) ett to restore the balance of accounts, each King has his recipe. Borrowing, taxes, plunder, bankruptcy, all is good for filling the coffers.

Before taxes and taxes, the King was only the first of the nobles. Like the other barons of the Kingdom, he lives of seigneurial rights and products from its personal domain. The King has so that resources and modest needs. No taxes or taxes, if exceptional contributions that is demanded to the bourgeois or church claiming the urgency of the moment and the general interest.


Expensive wars

The first crusade of Louis IX in 1248, will require no less than a million and a half pounds while the only revenues of the Kingdom annually totaled 250,000 books. The war costs dear and remains the primary cause of deficits during the middle ages, who sees noblemen, princes and rulers breaking permanently to defend or conquer land.

Logically, the first permanent tax is established on the basis of the most important of these wars, the hundred years war. King Charles VII shall convene the States-General, an Assembly of all the bodies of the Kingdom, and gets the right to levy annually a help for the 'size of Spears' (i.e. the purchase and maintenance of weapons of war).

After touching the sublime taste of l ´argent of others through tax revenues, l´etat will no longer want to s´arreter.

As until one time, it was for a nation to build and to exist, to defend themselves, we can consider that the use of debt had a relative legitimacy to the whole of society.



D´un ruined Government solutions:

-Solution 1: raise taxes

The first solution, the most practical and most effective is to increase taxes. This is what makes first Saint Louis by taxing his subjects, requiring cities an exceptional contribution, while lifting the famous decime (10%) on the comfortable income of the clergy – after all, they are the first affected by the Crusades and the protection of the tomb of Christ. Comes in turn tax increase and widening of the basis of calculation of the latter (increase in the number of taxpayer).

Rise of the regulations, inflation, taxes, and the new police regulations.

The huge amount of government spending, coupled with the fact that it has no desire policy to make significant reductions, means that inflation and taxes are some.

Through a veritable mountain of rules, laws and regulations, the Government can control the currency followed by loan restrictions on operations on metals purchases precious history of not being able to leave with. To lock a country's wealth and prevent it to leave, the State asked the inhabitants declare heritage held abroad.

Example (currently in Greece).

"The Greeks will not withdraw the money lying in their trunk to the Bank as long as the restrictions on the movement of capital will be in place" said Nadia Valavani Department of Greek Finances to a local television and including Reuters is echoed.

Article has not received much attention when it was published in the section "Obligations" of Reuters, which is not the most popular and most importantly a Sunday afternoon. (…)

The only reason that explains why money liquid chests is also subject to the control of capital, measures taken in consultation between the Government and banks, is explained by the fact that these entities reserve the right to confiscate the contents of these chests in case of worsening of the crisis.

Small-scale war being conducted against cash and gold appears to be intensifying. Governments are likely to take steps to prevent savers and investors to withdraw their money from the Bank to put in trunk. This decision is perhaps this goal in sight.

That banks hire safes are very practical to keep a small amount of metal. However, as the Greek case shows, the practicality and accessibility in a safe box at your bank branch easy theory may prove to be an illusion: the Government and the banks can take ownership of its contents in a simple signature. In short you know how it works and how it ends.


Solution 2: crop the currency

Second solution, just as effective but not popular: recover the precious metal currency in circulation by "scratching" parts and then consolidate the gain. A trick used extensively by the grandson of Saint Louis, Philippe IV le Bel, prince of counterfeiters.

This primitive form of devaluation will be regularly resumed later, less coarse forms. Then come parts with grooves to prevent this. Moreover, nowadays the material currency is less than that l is called the facial value, in d´autres terms a 2 euro coin is worth only €1 metal and the second euro corresponds to the value of the signature of the Government.


Solution 3: ransom bankers or the haves

Third radical method used by Philippe le Bel, the spoliation of moneylenders, Jews or Lombard, or the special taxation of their presence on the ground of the Kingdom to continue to carry on their business. "You pay, or you go" or in another totally reverse variant of control populations living in the are forced to stay in order to tax then.

The King, decidedly never in course of ideas to fill its coffers, also decided to put the hand on the property of the rich and powerful Knights Templar, causing the downfall of this monastic order in 1307 with the passive consent of Pope Clement v

Force to the princes, the order of the Templars had become a real state in the State, and especially a military and financial power fearsome face a Crown debtor ever. The manoeuvre by Philippe Le Bel to replenish funds of the Treasury, to alleviate debt and eliminate a menacing institution.

This technique of rifling is quite common among the Kings of France: it has the advantage of easily designate a culprit in the case of political tension, while retrieving a beautiful treasure to the passage.

Large confiscations of wealth are usually performed after the capital control to prevent the flight of wealth.


Solution 4: sausage


A variant of the previous method deserves a small point. Especially the point among the nazis, l´etat takes a population of 100 people, find a scapegoat (these last there were for example the Jews but it is also d other peoples etc). Result after the massacre, the population is more than 95 and the 5 missing capital is redistributed with as a proportion 1/5 which come back to employees, 4/5 at l´etat. This works well if the haves are can many.

Solution 5: make a 'good' marriage

Fourth method practiced with art by all sovereign: marriages and the dots — a trick unfortunately impossible under our poor republics…

In the 16th century, François Ier thus married his son Henry to Catherine de Medici, heir to a great florentine family, but whose districts of nobility are inadequate… Money silenced the most reluctant, because at the time, everything begins to haggle, even the honor, and the contract stipulates that the dowry of the bride will come strong about the royal deficit, i.e. 100,000 Silver crowns and 28,000 ecus of jewelry.

This is Catherine de Medici relegated to the rank of currency trading, easy stop-gap of the finances of the Kingdom. Practice that generates very few discontent, the Medici will reoffend seventy years later bringing once more a substantial dowry so Marie, distant cousin of Catherine, between in turn in one of the most powerful courts of the world by marrying Henri IV in 1600.Catherine

This falls well, the Kingdom coffers are empty again after the wars of religion and the sum of 600,000 gold crowns proposed by the family of the Grand Duke of Tuscany takes the decision, to the great relief of the Minister Sully.

Alliances of blood between the rulers and bankers in any case prove the new power of the latter. These princes of finance develop and encourage public debt. Who said bankers do not fleuretait with the policy only recently? It was said to l´epoque "smoking his lands" that said an alliance between noble and ugly, the noble poor, and the naughty rich. In short it still work for individuals, really for States.

 Solution 6: declare itself in default of payment

This is the fifth solution, real weapon of mass destruction at the disposal of the princes: the failure of payment outright, convenient way to erase a slate at the expense of the creditor. So in 1337, when the young King of England Edward III intends to enforce its rights on the Crown of France, it caters to the Bardi and the Peruzzi, the Italian bankers to finance its offensive.

But at the end of this offensive, originally the famous hundred years war, it found itself unable to repay and decided squarely to repudiate its debt at the expense of the banks that have never seen their money… It is the risk of the business.

However, the method remains perilous because bankers there then look twice before advancing new funding. But one day or another, they will eventually change his mind: How do not lend the greatest rulers of Europe which may, by a victorious war, repay with comfortable interests? Bankers to be skillful and far-sighted, for one, wait another, acting in the shadows for support strategies winning or hazardous, as was the case during the great rivalry between François Ier and Charles Quint, in the 16th century.

To finance its policy, the Emperor mortgage resources of Spain with its bankers. The Kingdom, already in the process of impoverishment, will be conducted to repudiate its debt several times during the 17th and the 19th centuries, cannot meet deadlines…

The France is no slouch since she declared in default of payment on eight occasions between the 16th and the 18th century which four times under the reign of Louis XIV. But it is true that at the time, the country dictated his law to the world…


Solution 7: make money or play with it (windsurfing ticket and inflation)

The solution is much more modern, because it uses the inflationary mechanism: it is the famous Law system, the name of this inventive Scottish banker who manages in 1717 to sell his idea to a Regent in the throat. The Law system, designed by the Scotsman John Law developing the use of paper money rather than metal species, and to facilitate trade and investment, has been put in place in France, under the Regency of Philippe d ' Orléans, from 1716 to 1720, to liquidate the debt left by Louis XIV.

On paper, the principle is simple: it is to create a bank that will emit paper money (a first in France) guaranteed by a capital of gold and silver. Royal Bank in 1718, the new institution buys the debt of the State but gets in return the right to collect indirect taxes of the Kingdom.

Shares soar in unbridled speculation: one buys one day and sold the next day with a nice added value. the bubble artificially inflates while money is running at full speed, fostering inflation. Advantage of l´inflation, it create l employment, ruin the wealthy but it benefit indebted people because they pay in the currency of monkey. There are more than numbers on the tickets but still the same resources to buy which means that these purchases are made for a still larger amount. Two actions are available for the Government, devalue its currency paper or implement l´inflation.

To return to l´Histoire, speculation that is played on the actions various Law firms will eventually ruin the system, when the course falls as fast climbed, following a movement of panic. When the shareholders and noteholders, from July 1720, ask suddenly recover their gold, colonial wealth have not yet arrived and the cash is lacking: the system must then admit its bankruptcy.

After this break, bad habits resume. The Government revives the deficit while the France is at the peak of prosperity, with agriculture, trade and industries expanding.

The ticket Board
The ticket Board

Solution 8: Good old looting the neighbour

The very young National Assembly of the French Revolution does not gloves. It proclaims the equality of all before the tax but did not have the means to return taxes, adopts a new solution to try to fill the deficit: it is low hand on the property of the Church, or at least three billion pounds that were proclaimed "national property" (land, convents, hospitals, schools, churches…).

Eight years after the storming of the Bastille, the debt problems are not for all resolved but the new Government of the Executive Board finds a solution well established to bail out its banks: the RAID pure and simple; usual solution to all conquerors, from Caesar to Hitler by passing by the Caliph Omar.

Thus, when General Bonaparte launches his army in the land and the opulent cities of the North of the Italy, he organized looting of monasteries and churches, background on the spot gold and silver, ransommed cities and requires contribution to the conquered territories, such a new Alexander. Looting is often an instrument of power for a war leader: by allowing his troops to practice, or in by regulating the sharing (see), it ensures their loyalty.

An estimated 46 million francs the booty seized in Italy in 1796 alone, a sum, compared to the overall deficit of the Finance of the time: 240 million.


Solution 9: sell his heritage

We sold the colonies to pay the wars.



In conclusion we can see that l´etat often tries to s´approprier the d´autrui property or d´user of his power (default), cheating (l inflation comes back to make the counterfeit money) rather than reduce these expenses. But in Europe it is impossible d´utiliser money, rest so looting, tax or failure to pay.

I advise you to read what is currently happening to see or we are.


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