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EXCESS OF PRINTING MONEY: ONE EXAMPLE

From the inventors of paper money, the Chinese:
 
The edict of 1403
 
“The use of gold or silver as the medium of exchange is prohibited. Those transgressing this shall be adjudged guilty of a major crime. Anyone who provides information leading to their capture shall be rewarded with the gold or silver involved in the case” (from Li p. 289)
 
This edict is from the Ming Government who began the excessive printing of money around 1380, to finance government deficits they could not cover with real, “ hard” money, (copper, silver or gold). It took 20 years of commodity inflation to destroy this cycle of excessive paper money printing.
 
It’s interesting that the person ratting out their neighbor and winning the gold or silver would then, themselves, be subject to death since the hording of gold and silver was also punishable by death.
 
If you think the excessive printing of paper money is a new phenomenon for governments, think again. In almost every case of uncontrolled expansion of the money supply the results have ended very badly for everyone. There are few examples of governments successfully disengaging from over- printing. Once over-printing beings the process takes on a life of its own. To its own folly, a typical government will issue stupid laws such as the one quoted above, instead reducing the money supply.