PEAK GOLD: How The Romans Lost Their Empire

(by Ugo Bardi)  Precious metal currency was a fundamental factor that kept together the Roman empire and gave to the Romans their military power. But the Roman mines producing gold and silver peaked in the first century CE and the Romans gradually lost the capability of controlling their resources. In a way, they were doomed by “peak gold.”

SRSrocco:  This is guest post by Ugo Bardi, professor of physical chemistry at the University of Florence, Italy.  Ugo has a blog called Cassandra Legacy which I highly recommend reading.

Extracted Ugo Bardi Book

I also recommend his new book Extracted which will be out April 15, 2014.  It can be found at this link: Extracted — ChelsaGreen Publishing

Peak Gold:  How The Romans Lost Their Empire

by Ugo Bardi,

A Roman “Aureus” minted by Emperor Septimius Severus in 193 CE. At nearly 8 grams, the Aureus was truly an imperial coin – the embodiment of Rome’s wealth and power. (image from Wikipedia).

In this post, I argue that precious metal currency was a fundamental factor that kept together the Roman empire and gave to the Romans their military power. But the Roman mines producing gold and silver peaked in the first century CE and the Romans gradually lost the capability of controlling their resources. In a way, they were doomed by “peak gold.”

When I heard for the first time that the Roman Empire fell because of the depletion of its silver and gold mines, I was skeptical. Compared to our situation, where we are facing the depletion of fossil fuels, the Roman case seemed to me to be completely different. Gold and silver don’t produce energy, they don’t produce anything useful. So, why should the Roman Empire have fallen because of something we might call “peak gold”?

And yet, as I delved into the matter, I noticed how evident was the correlation of declining gold and silver availability with the decline of the Roman Empire. We have scant data on the production of Roman mines, mainly located in Spain, but it is commonly believed that production peaked at some moment during the first century CE (or perhaps early 2nd century CE). Afterwards, it rapidly dwindled to nearly nothing, even though gold mining never completely stopped (1).

As you can see in the figure, the loss of precious metal production was reflected in the silver content of the Roman currency. The Romans didn’t have the technology needed to print paper bills, so they just debased their silver currency, the “denarius,” by increasing its copper content. By mid 3rd century, the denarius was nearly  pure copper: “fiat money” if there ever was one. During that  period, gold coins were not debased, but they basically disappeared from circulation. (graph above from Joseph Tainter (2)).

As I argued in a previous post, the progressively dearth of precious metals  correlates well with the various events that took place during the declining phase of the empire and with its eventual disappearance. Of course, correlation doesn’t mean causation but, here, the correlation is so strong that you can’t think it is just a question of chance. With time, it appeared clear to me that there were also clear links between several factors in the collapse of the Empire.

In general, complex systems tend to fall in a complex manner and the Roman Empire did not simply fall because of the lack of its primary energy source which, at that time, was agriculture. Energy (and power) is useless without control and for the Romans controlling the energy generated by agriculture requires capital investments for troops and bureaucracy. Both were affected by the decline of the production of precious metals. In time, the reduced military effectiveness of the empire disrupted the ability of controlling the agricultural system. That condemned the Empire to collapse.

This is a hugely complex story that can’t possibly be exhausted with a mere blog post. Nevertheless, the problem is very general and it can be condensed in a single sentence: “power is nothing without control” So, I believe it is possible to lay down in a relatively short space the main elements of the interplay between gold, military power, and food in Roman times. Let me try.

The Romans And Gold

Ultimately, what creates and keeps together empires is military force. The Roman Empire was so large and so successful because it was, possibly, the mightiest military force of ancient times. The Romans had been so successful at that not because of special military innovations. The recipe for their success was simple: they paid their fighters with precious metal currency. The combined technology of gold mining and coin minting had allowed the Romans to create one of the first standing armies in history. Still today, we call our enlisted men “soldiers”, a term that comes from the Roman word “Solidus;” the name of the late empire gold coin.

Not only money could create a standing army, it could also swell it to large sizes. Enlisting in the legions – the backbone of the army – was reserved to Roman citizens, but anyone could enlist in the “auxilia”, “auxiliary” troops. In the figure, you see Roman auxilia (recognizable by their round shields) presenting the severed heads of Dacians to Emperor Trajan during the Dacian campaign of the 2nd century CE. Normally, Romans were not supposed to cut off enemies’ heads, it was seen as uncivilized, but the auxilia were notoriously a little unruly (note how the Emperor, on the left, looks perplexed). But, by the time of the Dacian wars, the auxilia had become a fundamental part of the Roman army and they were to remain so for the remaining lifetime of the Empire.

Gold and silver were essential elements in the hiring of troops for the Romans and that was especially true for foreign ones. Put yourself in the caliga (sandals) of a German fighter. Why should you put your framea (lance) in the service of Rome if not because you were paid? And you wanted to be paid in serious money; copper coins would not do. You wanted gold and silver coins that you knew could be redeemed anywhere in Europe and especially in that gigantic emporium of all sorts of luxury goods that was the city of Rome, the largest of the ancient world. And, by the way, where did these luxury items come from? Mostly, were imported. Silk, ivory, pearls, spices, incense, and much more came from India and China. Importing these items was not just an extravagant hobby for the Roman elite, it was a tangible manifestation of the power and of the wealth of the empire; something that was an important factor in convincing people to enlist in the auxilia. But the Chinese wouldn’t send silk to Rome in exchange for worthless copper coins – they wanted gold and they obtained it. Then, that gold was lost forever for the Empire which, basically, could produce only two things: grain and troops, neither of which could be exported at long distances.

This situation explains the gradual military decline of the Roman empire. With the decline of the precious metal mines, it became more and more difficult for emperors to recruit troops. The lack of a strong central power caused the empire to become engulfed in civil wars; with the army mainly engaged in fighting chunks of itself and the empire splitting in two parts: the Eastern and the Western. During this phase, the number of troops was not reduced, but their quality strongly declined. After the military reform by Emperor Diocletian during the third century CE, the Roman army was formed mainly of limitanei; not really an army but a border police unable to stop any serious attempt on the part of foreigners to puncture the borders. To keep the empire together, Emperors relied on the “comitatenses” (also with other names) mobile crack troops which would plug (or try to plug) the holes in the border as soon as they formed.

The combination of limitanei and comitatenses worked in keeping the barbarian out of the Empire for a while. But the hemorrhage of gold and silver continued. So, during the last decades the empire, the paradigmatic Roman troops were the “bucellarii” a term that means “biscuit eaters”. The name can be taken as implying that these troops fought for food. Of course that may not have been always true, but it is a clear indication of the dearth of money of the time. There are also reports of troops paid in pottery and in some cases with land – the latter use may have been a factor in creating the feudal system that replaced the Roman empire in Europe.

In a way, as we see, the Romans were doomed by their “peak gold” (and also “peak silver). By the loss of their precious metal supply, the Romans lost their ability of controlling their troops and as a result of their resources. And power is nothing without control.

But the Roman empire did not fall just because it was invaded by foreigners or because it split in multiple sectors. It experienced a systemic collapse that wasn’t just a military one: it involved the whole economy and the social and political systems as well. To understand the reasons of the collapse, we need to go more in depth in the way the Roman economic system worked.

– The Romans and energy

The energy of the Roman Empire came from agriculture; mainly in the form of grain. At the beginning of their history and for several centuries onward, it seems that the Romans had little or no problems in producing enough food for their population. That makes sense considering that in Roman times the population of Europe was less than one tenth of what it is today and hence there was plenty of free space for cultivations. Reports of food problems in the Empire appear only with the 1st century CE and truly disastrous famines appear only with the 5th century CE – when the Western Roman Empire was already in its terminal phase. “Peak food”, apparently, came much later, about 3-4 centuries, than “peak gold”.

The very existence of a “peak food” for the Roman empire is somewhat puzzling: agriculture is, in principle, a renewable technology that had been able to feed the Roman population for several centuries. During the last period of the empire, there is no evidence of a population increase; on the contrary, it is clear that it declined. So, why couldn’t agriculture produce enough food?

The problem is that producing food doesn’t just involve plowing some land and sowing crops. Agricultural yields depend on the vagaries of the weather and, more importantly, agriculture has the tendency of depleting the land of fertile soil as a result of erosion. To avoid this problem, the ancient had a number of strategies: one was nomadism. From Caesar’s “De Bello Gallico” we learn that, as late as in the 1st century BCE, European populations still practiced a nomadic life style. They would do that in order to find new, pristine land and planting crops in the rich soil that they could produce by slashing and burning trees. That was possible because continental Europe, at that time, was nearly empty of people and entire populations could move unimpeded.

The Romans, instead, were a sedentary population and they had the problem of soil depletion. As population grew, erosion became a problem, especially in a mountainous region such as Italy is (3). In addition, some urban centers – such as Rome – became so big that they were impossible to supply using just local resources. With the 1st century BCE, the situation led to the development of a sophisticated logistic system based on ships that carried grain to Rome from the African provinces, mainly Libya and Egypt. It was a major task for the technology of the time to ensure that the inhabitants of Rome would receive enough grain and just when they needed it. It required large ships, storage facilities and, more than all, a centralized bureaucracy that went under the name of “annona” (from the Latin world “annum”, year). So important it was this system, that Annona was turned into a full fledged Goddess by imperial propaganda (you can see her in the image above, on the back of a coin minted at the time of Emperor Nero – from Wikipedia). For us, turning bureaucracy into a divine entity may appear a bit farfetched but, perhaps, we are not so far away from that.

Despite its complexity, the Roman logistic grain system was successful in replacing the insufficient Italian production and it permitted to feed a city as large as Rome, whose population approached (and perhaps exceeded) one million inhabitants during the heydays of the empire. But it was not Rome alone which benefited of the grain transportation system and the system could create a relatively high population density concentrated along the shores of the Mediterranean sea. It was this higher population density that gave to the Romans a military edge over their Northern neighbors, the “barbarians”, whose population was limited by a lack of a similar logistic system.

But what actually moved grain from the shores of Africa to Rome? In part, it was the result of trade. For instance, grain shipping companies were in private hands and they were paid for their work. But grain itself didn’t move because of trade: the provinces shipped grain to Rome because they were forced to. They had to pay taxes to the central government and they could do so either in currency or in kind. It seems that grain producers paid usually in kind and Rome didn’t ship anything in return (except in terms of troops and bureaucrats). So, the whole operation was a bad deal for provinces but, as usual in empires, opting out of the system was not allowed. When, in 66 CE, the Jews of Palestine decided that they didn’t want to pay taxes to Rome any more, their rebellion was crushed in blood and Jerusalem was sacked. In the end, it was military power that kept the system under control.

The Roman annona system may not have been fair, but it worked fine and for a long time: at least a few centuries. It seems that the African agricultural system was managed by the Romans with reasonable care and that it was possible to avoid soil erosion almost until the very end of the Western Empire. Note also that the annona system doesn’t seem to have been affected – in itself – by the debasing of the silver denarius. This is reasonable: grain producers had no choice; they couldn’t export their products at long distances and they had only one market: Rome and the other major cities of the empire.

But the system that fed the city of Rome appears to have declined and finally collapsed during the 5th century CE. We have some evidence (3) that it was in this period that erosion turned the North African shores from the Roman “grain belt” into the desert we see nowadays. Possibly, the disaster was unavoidable, but it is also true that warfare does a lot of damage to agriculture and this is surely true for the North African region, object of extensive warfare during the last period of the Roman Empire. More in general, the strain to the economic system generated by continuous warfare may have led producers to overexploit their resources, privileging short term gains to long term stability. Were it not for these events, it is likely that the agricultural productivity of the land could have been maintained for a much longer time. But that was not the case.

With the North African land rapidly turning into a desert, King Genseric of the Vandals (see his face on a “siliqua” coin in the figure), ruling the region, halted the shipping of grain to Rome in 455 CE, then proceeding to sack the city in the same year. That was the true end of Rome, whose population shrunk from at least a few hundred thousands to about 50,000. It was the end of an age and never again would the North African shores be exporters of food.

The fall of the Roman empire

Complex systems tend to fall in a complex manner and several interlocked factors played a role together first in creating the Roman empire, then in destroying it. At the beginning, it was a technological innovation, coinage of precious metals, that led the Romans to develop a military might that allowed them to access a resource which would have been impossible to exploit otherwise: the North African agricultural land. But, as it is often the case, the exploitation mechanism was so efficient that eventually it destroyed itself. Lower productivity of the precious metal mines reduced the efficiency of the Roman military system and this, in turn, led to fragmentation and extensive warfare. The increasing needs of resources for war were an important factor in destroying the agricultural system whose collapse, in turn, put an end to the empire.

The dynamic interplay of the various elements involved in the growth and the fall of the empire can be seen in the figure below, from a previous essay of mine.  In the diagram, the source of energy is agriculture, but it is just an element of a complex system where various entities reinforce or dampen each other.

The diagram is patterned after the one originally created by Magne Myrtveit for our society described in the 1972 “Limits to Growth” study. This, as other studies of the same kind, provide a nice, aggregated view of the trajectory of an economic system which tends to overexploit the resources it used. As models, however, they are not completely satisfactory in the sense that they don’t include the question of control. It is a cost which needs to be paid and the gradually declining flow of resources makes it difficult. As a result, empires rarely collapse smoothly and as a whole, but rather tend to fragment and engage in internecine wars before actually disappearing. That was the destiny of the Roman Empire which experienced the general rule that power is nothing without control.

The Romans and us

It has always been fashionable to see the Roman Empire as a distant mirror of our civilization. And, indeed, we see that the points of contact are many. Just think of the sophisticated Roman logistic system: the navis oneraria which transported grain from Africa to Rome are the equivalent of our super-tankers transporting crude oil from the Middle East to Western countries. And think how China and India are playing today exactly the same role they were playing in the remote Roman times: they are manufacturing centers which are gradually soaking the wealth of the empire that we call, today, “globalization”.

This said, there is also an obvious difference. The Roman energy system was based on agriculture and hence it was theoretically renewable, at least until the Romans didn’t overexploit it. Our system is based on fossil fuels, which are obviously non renewable resources. Hence, we tend to be more worried about the depletion of our energy resources rather than that of gold and silver which – it seems – we could safely remove from our financial system without evident problems.

Still, there remains the fundamental problem that power is useless without control. The control system of the globalization empire works on similar principles as the older Roman one. It is based on a sophisticated financial system which, eventually, works because it is integrated with the military system. In the globalized army, soldiers, just like the Roman ones, want to be paid. And they want to be paid with a currency that they can redeem with goods and services somewhere. The dollar has, so far, played this role, but can it play it forever?

Eventually, everything that humans do is based on on some form of belief of what has value in this world. The Romans saw gold and silver as stores of value. For us, there is a belief that bits generated inside computers are stores of value – but we may be sorely disappointed – not that there will ever be a “peak bits” as long as there are computers around, but surely a major financial collapse would not just impoverish us, but most of all it would disrupt our capability of controlling the energy resources we need so desperately.

So, when oil pundits line up oil reserves as if each barrel were a soldier ready for battle, they tacitly assume that these reserves are available for use of the global empire. That’s not necessarily true. It depends on the degree of control that the empire will be able to exert on producers. That depends on the financial system which may well turn out to be the weak link of the chain. Without control, power is useless.

The Roman empire was lost when the financial system ceased to be able to control the military system. When the Romans lost their gold, everything was lost. In our case, it may well be that we will lose our ability to control the military system before we actually lose our ability to produce energy from fossil fuels. If the dollar loses its predominance in the world’s financial system, then producers may be tempted to keep their oil for themselves or, at least, not so enthusiastic any more in allowing the Empire to access it. What’s happening today in Ukraine may be a first symptom of the impending loss of global control.

1. “Mining in the Later Roman Empire”, J.C Edmondson, The Journal of Roman Studies, 79, 1989, 84, http://www.jstor.org/stable/301182
2. Tainter, Joseph A (2003. First published 1988), The Collapse of Complex Societies, New York & Cambridge, UK: Cambridge University Press, ISBN 0-521-38673-X,
3. “The Roman Empire: Fall of the West; Survival of the East”, James F Morgan, Bloomington 2012

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70 Comments on "PEAK GOLD: How The Romans Lost Their Empire"

  1. THE IRONY OF IT ALL…

    I am going to make the first comment here, because I know this article will not be read by many people. This is the CURSE-IRONY of our society today. I totally understand the mindset of many precious metals investors today. They just want to know how RICH they will become with their gold and silver. Nothing else seems to matter.

    This is quite unfortunate as the FAILURE to understand ENERGY (Historical & Present) will come at a severe determent to the public and precious metals investor.

    The financial-economic system is going to unfold rapidly in the future… and most are not prepared.

    I would appreciate those who enjoyed this article to share it with your friends, family and colleagues via email, facebook or twitter.

    steve

    • Interesting article my complements, a very nice read, although I have reached different conclusions.

      My advise is to add some technology to your precious metals investments.

      Along with my retirement metal I added the diesel engine technology option and PTO attachments!

      Added some heirloom seeds and presto, food source. I will always need to eat. A tractor is a handy asset to get many jobs done.

      One might wonder what Rome’s future would be if other opportunities existed.

      • You’re on the right track…

        a tractor sure can do a lot of stuff… however, it still feeds offa petroleum. But that can be a costly method of burning BTUs…

        I have to laugh though when I see people proclaim that things will just ‘break down’ if n when gas goes above $5.00 gallon. Where I live, diesel goes for the equivalent of $8.60/gallon, and gasoline considerably north of that. Everybody gets on with things as if the world has not ended!

        Hedging, as usual is your best strategy… horse can do most anything a Massey can, and do it cheaper… cheap as hell to buy one now, and the right breed can get all the nutrition it requires without expensive feeds at all! Only real important input they require is attention…

        which is amply rewarded when given! Believe I have learned as much or more bout humans as I have about horses from looking after equine pals… their lives boil down at any given moment, outside of work time, to one of the three F’s… feeding and fighting being two of the three…

        I would defy anyone to prove that most human beings are in any way different in their interests from that formula.

        Get a couple of four-legger friends… worst comes to worse, they’ll carry the saddlebags in which you’ve loaded your stash for gettin out of Dodge!

        • roguefaction:
          “I have to laugh though when I see people proclaim that things will just ‘break down’ if n when gas goes above $5.00 gallon. Where I live, diesel goes for the equivalent of $8.60/gallon, and gasoline considerably north of that. Everybody gets on with things as if the world has not ended!”

          You cannot compare prices across nations and then make the conclusion that because the gas prices in Europe is $8.60 then $5.00 is no problem. The cost of gas is priced into the different national economies.
          The average price in the US is about $3.40 so if the price would increase to $5.00 that is about a 50% increase in price.
          If you had to compare then you would also have to add 50% to the European price of gas – that would give a gas price in Europe just under $13/gallon if we use your numbers.
          That would just kill of many of the businesses that are struggling for survival at the moment and adding pressure to the negative feedback systems of the massive ballooning welfare states:
          Business layoffs > less taxes > more people on public support > need for higher taxes > and so on….

          • roguefaction | March 26, 2014 at 7:10 am |

            Ag47
            “You cannot compare prices across nations and then make the conclusion that because the gas prices in Europe is $8.60 then $5.00 is no problem. The cost of gas is priced into the different national economies.”

            Not too sure bout what price Europeans are paying for gas, as I have never spent much time there. But if you wish for some reason to use their example as a marker for this discussion…. I believe you may have tripped yourself up over your own argument.

            What exactly could “priced in” mean? If the “Petrodollar” is the means of price discovery for every and all nations dependent pon sourcing foreign supplies of oil… then the ‘cost’ of imported petroleum must be a function of their currencies relation to the $US… and the social policy they employ as it works out in the tax applied to the retail price.

            Would a price of …let’s use your figure of $13/gallon destroy the European economy? Can’t say for sure… but I am guessing that we may indeed find out the answer to that in short order! The game of brinkmanship that the NATO alliance is playing with their primary energy supplier is one that can have few other endings than a major interruption in supply…

            which is likely to translate into a major increase in price@retail. The joke of US shale oil/gas or Ukraine fields being a safety valve to offset the consequences of misplayed sanctions gainst Rus has a punchline which will impact pon daily life in the entire formerly ‘first world’ to a degree that can only be imagined… but if you imagine that it will kill the Euro economy… just as you ‘imagine’ that I must be a denizen of said place cause of what I pay for diesel…

            hey – I won’t gainsay you… just ask that you scroll down to my following comment here bout ‘western ethno-cultural supremacism’ and note it’s application to the nuts n bolts of commentary here!

            When the Petrodollar is replaced by a new standard of measuring resources vs ‘value’… I believe “Big” Jim Willie to be correct: USA will become a third world backwater “overnight” … and Europe is most likely to join them, unless they smarten up real quick! And it will not be because of 5 dollar gasoline friend! Rather… the speedy result of ‘foreign policy’… as in ‘foreign’ to the interests of the citizens of the formerly free world!

            Those few oldsters in places like Romania what resisted the Eurozone dictate to ditch their four-leggers for shiny ‘designed in Germany/MADE IN China tractors gonna soon be back in clover…

            I’ll still keep my 28 hp diesel-burnin workhorse, but turn the soil with the boyz what make that neighing noise! EROI is the Boogeyman what gonna get y’all… won’t be at 5, or 8 or ten dollar a gallon gasoline… but rather, after the pumps fall silent!

    • Steve,
      Couldn’t new power technologies (thorium reactors, fuel cells, etc.) be a new beginning for our civilization?

  2. Care to disclose the payment from the “guest” blogger,or are you doing it solely for the ad click revenue?

    • 2014,

      I provided the link to his new book because it allows individuals to read and understand more about the energy factor going forward. I receive no fee for doing so. I did the same with Bill Powers (energy analyst) book in a previous post.

      The only revenue I receive right now is from Google AdSense… which barely pays the bills for the site. However, I will soon be starting a new REPORTS PAGE that offers FREE & PAID REPORTS.

      The FREE reports will not require anyone to enter their email address…. free with no strings attached.

      2014… maybe you might offer a reply about the subject matter and leave your incorrect assumptions aside once in a while.

      steve

    • I don’t get it 2014. Why are you constantly taking cheap shots instead of contributing something of substance.

    • 2014 works for either the government or bullion bank or possibly both.

  3. I just read “One Second After”

    l’ll buy your newsletter if you don’t like it

    • 2014,

      I am not sure what you mean by this “l’ll buy your newsletter if you don’t like it”

      Are you referring to his website or book?

      Just to make sure we are on the same page here. I will not be offering a subscription based newsletter or service. I will be providing single PAID REPORTS.

      steve

  4. READ the letter pilot sent to casar,its in the sanhedren ,can’t spell to well,PILOT had to send a report to him explaining what happened the day they killed the LORD,that was the end of the roman empire,everything else was punishment from the LORDS FATHER,YAHUWEH,and their dammed lucky thats all he did to them,he destroyed their nation,HAD it been my son they killed,ITALY would have been wipped off the map………….

    • It is interesting that you choose to believe that there are more than One in the godhead. ie. a Father and a Son and I would imagine a dove to you is representative of the Spirit. In the Jewish world you would be called a pagan for believing in more than one God. Just so you get my drift…..You are not a ghost but you are a father and a son right? Understand this a title isn’t a name or a person. Thats how come the son given and the child born can be both the Mighty God and the Everlasting Father..Isaiah 9:6. The things that happened in Italy was the same thing that happened to Israel……You reap what you sow. It just so happens that the Jewish nation were spanked for their hypocrisy that you might have the chance of redemption. Italy was a pagan nation to begin with…….and for the most part still is. Stupid is as stupid does.

      • what on this earth are you talking about? this blog gives excellent insight into what may become of the current global economy. We are all sinners – all imperfect and it is our collective actions that cause certain world leaders to be elected and lead us into decay.
        And do your history research – the term “Italy” was not even used to describe the geographic peninsula you and Arizona believe should be “wiped off the map”. I’ll trust that both of you will educate yourselves on the movement of tribes in the Magna Graecia and the rest of the ancient world instead of calling people “stupid”. God has the same respect for the land He created as those who inhabit it – even MORE so – which is why He has given mankind chance after chance yet GEE we somehow cannot get it right.

        Last time I checked the nation of Italy was not nearly close to being a pagan nation, if anything one of the last nations still reverberating and struggling to adapt from times past. It is, unfortunately, like most European nations, following all that is imperfect of contemporary US society down the moral tubes.

        Stop blaming nations and judging other people, worry about yourself and how you might benefit society. Otherwise, you also might find yourself guilty of hypocrisy.

  5. great article…I’ve been referencing the Denarius as a wage for a hard days labor and putting ones life at risk , for a long while but tying it together with the economy and the monetary system…..
    well,any soldier worth his salt (another ration issued without which a soldier might die) knows
    what REAL money is.how much of what it will purchase.

  6. I have become disillusioned with the future utility of precious metals. I quit buying them about a year ago…although I haven’t sold them.

    I came to the conclusion that wherever this ole world is headed, only basic needs like water, food and shelter will be “valuable”. There will not be enough surplus of those things available to require a currency.

    To put it bluntly, most of us will not survive the collapse of hydrocarbon supply or the related financial collapse that is just over the horizon. Maybe in a hundred years PMs will become valuable again.

    • jrs,

      I thought I was the pessimistic one…LOL. You bring up a valid argument. However, after the Roman Empire collapsed, gold and silver were just as valuable… matter-a-fact, even more so. I don’t believe collapse of human industrial society (Ruppert) will occur overnight.

      We will see a collapse of the financial system and a severe disintegration of the economy, but the world will go on for some time before it becomes very ugly.

      Either way, gold and silver are the best stores value in any scenario. An individual can only buy up so much land, food, grain, guns etc and etc. If there is surplus capital… best to consider gold and silver.

      Lastly, the current paper manipulation scheme has worn down hard on the precious metal investors. I imagine you will feel much better about your gold and silver when the Global Fiat Monetary system resets.

      steve

      • Thanks for the response.

        I have grappled with this for a long time. We are a small percentage that value monetary metals. Value is determined by both the buyer and seller. How do I convince the non goldbug (most laypeople) of their value? Must I find the rare hard currency believer to trade with? That may be tough, depending on where I think we’re headed.

        Ah, well. Regardless, I will keep mine as a hedge.

        • JRS… Now you’ve really done it!

          By laying bare your honest doubts about the wisdom of your gut instincts, you are exposing the soft underbelly of the insectile species known as aurum volucris ….. a bug notorious for it’s rabid defense of dunghills of no known value, and a corresponding incapacity to discern and defend it’s own real interests!

          The line of interlocking assumptions which carry through in the minds of this strange strand of nature’s creations… from the starting point of “gotta get me some shiny” – to the end point of their quest for truth and knowledge – “got me mine…I’ll be just fine!”… IS RIFE WITH THE MISTAKEN BELIEF that merely holding gold/silver is the prescription for surviving the coming storm.

          Since the species appears in concentration only in a range limited to the northern part of the western hemisphere… mostly the continental North American area and a few outlying colonies… and is so limited in imagination as to believe that there is no other life outside their own nests, they have never given consideration to the probable fate of those who have coated themselves with an exo-skeleton of precious metal whilst living in the midst of a much greater population of ‘paper-mache’-armored neighbor bugs.

          As you have presciently pointed out here, there is much liability, and little luck in being a Gulliver amongst Lilliputians. Were one, for instance… to have plated themselves with the shiny stuff whilst living amongst a populace of similar cultural proclivity…(eg… clue for you MR M!) almost all of the peoples of the eastern part of the planet… in other words, outside of the(rapidly shrinking)rule of “Golbasto Momarem Evlame Gurdilo Shefin Mully Ully Gue”…

          you might indeed be soon to find yourself in clover… rather than the hell which will shortly be descending pon the poor peons of the prison formerly known as the “first world” – whether a gold-plated or paper-plated prisoner matters not a wit! The closing walls of the Poe-like cell of DHS-driven terror will squish the manacled victims all the same.

          But mobility…of mind or of body, is clearly NOT an attribute of our resident “aaurum volucris”…. who will surely, after a suitable period of gnashing of teeth, and groaning in dismay at such sacrilege to their cultic [self]worship …

          show up to spew a mighty venom of verbiage such as we have recently witnessed from a Master of the Metier… such as to make even the rantings of ‘2014’ seem sane!

          DISPAIR not jrs! Merely DISPLACE yourself to another space! Where the cultural tradition of holding gold is still in place…. and the developing shift in global power may indeed leave you a golden-holder… rather than ‘bag-holder!’

          • Rogue,

            So what are you saying exactly. Do you mean lil ole me sitting in my Detroit downtown row home with my stash of gold and silver chain’t enough? Sure, most of the grocery stores around here closed down and they just shut water off to the area… but what are you trying to say?

            My gold and silver stash not enough?

            steve

          • roguefaction | March 25, 2014 at 10:00 am |

            Steve,

            If I thought for one minute that you were laying out this site from within the confines of the “Greater Detroit” area(including formerly fabulous burbs where Ford flunkies found paradise in split-level architect-designed ‘communities’)…

            I’d ask you if the COBO still exists – and whether you’ve got tickets to a Saturday night double bill featuring the Sheik vs Whipper Watson!!!!

            But. I know those days are gone forever…. and as Steely Dan sang in Babylon sista… “like a trip to Tiajuana”… goin down those roads is “cheap but it’s not free!”

            Closest you or I gonna get to D-tRIOT is with our chum Howie “2014” Young here – and even he left town long ago! Truth is…only Chinese investors be left with property there. Savvy fellas like yourself are ‘outta town’ n gettin down with the livestock lifestyle.

            Unfortunately, like they say in real estate… ::”location is everything”:: and being located in the area of greater “Gulagistan”…aka the States and it’s northern sidekick… is a prescription for voluntary slavery – those who collect stacks of gold and/or silver in order to make the work of DHS/IRS/FBI/NSA and the rest of “teamOBAMA” even easier…(another clue for our resident teach – MR M – what 11 letter word rhymes with LOCATION?) are similar in luck to the kind of hapless munchkins pon whose foreheads Ed Ferhat used to carve custom pencil engravings in the ring!

            Personally, I much prefer the role of “BOBO BRAZIL”… and unlike “the Sheik” whose motto was “I like to hurt people”… I look to the example of recently deceased Adolfo Suarez, the Spanish politician who guided Spain into a bloodless tradition from Francoism to a parliamentary democracy, and famously said: “I never ask anyone where they have come from… only where they are going.” – I only ask folks to look at the signposts… and then decide. Are you getting out of Dodge, or heading Camp Fema way?

            Answer to that question sorts EVERYTHING ELSE out.

          • Rogue,

            Funny stuff… indeed. You did bring up a key point. And that has to do with Wealthy individuals and Hedge Funds buying up Real Estate in the U.S. like it’s going out of style. Unfortunately, the latter part is correct. GOING OUT OF STYLE… forever.

            I am amazed at the lack of critical thought from those who have more fiat currency than sense. In a PEAK OIL environment, Real Estate for the most part will be a toilet bowl for capital. Whatever you put in now.. get’s flushed down the sewer later.

            I believe the largest buildings will suffer the greatest in a PEAK ENERGY world. Wal-Mart’s business model of making itsy-bitsy profits on mega-sales won’t work when it cost an arm, leg and left testicle for energy.

            What on earth are we going to do with all these huge Commercial Skyscrapers that dot the major cities throughout the country? What use will they be when energy becomes in short supply?

            No one really pays much attention to these important questions. Mark my words… the end of the U.S. LEECH & SPEND ECONOMY is coming soon to a town near you.

            steve

          • Many things will be valued by many people.
            For those who inhabit metro areas, getting our may be highly valued whereas rural residents may have other priorities.
            Just depends upon who a person is and the neighborhood in which that person lives. City life was great a hundred years ago; now?, not so much.

          • lastmanstanding | March 26, 2014 at 7:43 am |

            KISS used to drive Detroit insane at the COBO!!!

      • Could it be that PMs are not going to behave the way we think they are in the future?

        I’m beginning to think that, if so called experts keep saying that PMs are going higher and are the place to be invested in, that eventually they will be right.

        Even a broken clock is right twice a day!

  7. After the Roman collapse there was famine in the cities, but the population of the provinces survived, the collapse of the central government did not prevent local food production. The American collapse will result in famine in the cities and a die off, but without the Nox2 fertilizer, electricity to power the irrigation systems, and diesel to run farm machinery much of the US’ food production will go the way of the north African grain belt of Roman days.

    • Cheap abundant fossil fuel that energized the industrial revolution [coal], then the discovery of what oil was, how it could be used, and how to extract and refine it….this energy and hydrocarbon products have also enabled population explosions in many parts of the world.

      Unless there is much more efficient EROI on solar or wind in the future I think the world’s population will shrink. And the process of attrition will be ugly.

      While one can’t eat metal, one frequent world traveler who has a blog says he has always, even in the poorest areas short of food, been able to get a good meal for a recognizable silver coin[s].

  8. Thanking you for the eye-opening article, Steve.

    That was one hell of a read – and all and sundry need to read it.

    As for that shill, ‘2014,’ I would humbly suggest you ignore him.

    Oxygen-thieves need oxygen to survive.

    We’re all clued in here. Ignoring him won’t dampen your reputation one iota.

    Peace brother.

    • Velikovsky,

      Glad you enjoyed the article. I just want to make sure everyone realizes that it was a guest post by UGO BARDI. He has done some excellent work on energy, mining and the economy. I am repeating this because several members made comments in the past as if I wrote these GUEST POSTS.

      Ugo Bardi wrote a great series on the SINKING OF THE E-CAT, Rossi’s supposed cold-fusion machine. Here is part of his article:

      Let’s start with what Rossi himself had declared about his E-Cat. He said that it is based on the fusion of hydrogen and nickel nuclei (see Rossi’s patent) and that gamma rays are produced during operation (see here) so that lead shields had to be placed inside the device. Rossi also said that he was building a factory in the United States where he would produce E-Cats by the millions; to be sold as water heaters for people’s homes. According to some recent statements by Rossi, the device had been undergoing safety testing for months at Underwriters Laboratory.

      It couldn’t go unnoticed in Florida that someone was claiming to be producing nuclear reactors in large numbers. On February 24, an officer of the State of Florida Bureau of Radiation Control went to investigate what was going on in the pretended “E-Cat factory” in Miami. There, he found no factory, but an apartment and Andrea Rossi in person. Questioned on the E-Cat, Rossi declared that “no nuclear reactions occur inside the device.” Rossi also stated that all the facilities for testing and production are “overseas,” and that safety certification with Underwriters Laboratory will be arranged in the future. The officer then left, writing in his report that his bureau has no jurisdiction over a device which has nothing nuclear inside. (The complete documentation is here, comments can be found here and here. Rossi himself confirmed the story here.)
      ———–

      You can read the rest at this link: http://cassandralegacy.blogspot.com/2012/03/sinking-of-e-cat.html

      steve

  9. Interesting times we live in and an interesting article. A perspective I don’t see elsewhere.

    SDR’s, here we come.

  10. Nice find Steve,interesting how the correlations are mounting.

    hi 2014,Eff off.

  11. PMs tanking again…

  12. Steve
    Thank You for having Ugo Bardi to share his research and writings with us. I really enjoyed it as I recently read a book by MIchael Bunker ” Surviving Off-Grid, Decolonizing the Industrial Mind” 2011. I appreciate your EROI work and look forward to reading your work on an almost daily basis. Good stuff!! Harold

  13. There are a legion of problems with this theory of “peak gold” itself being the prime reason for the fall of Rome.
    First, this statement is absurd and blatantly wrong:
    ” Gold and silver don’t produce energy, they don’t produce anything useful.”
    Gold has over 4,000 industrial uses and silver is ESSENTIAL to virtually all industry and rates almost as high as petroleum in being the most necessary natural resource produced today (outside of water and things that exist without refinement).
    We are being forced to use “fossil fuels” today and they are far more plentiful than we presumed years ago. “Peak oil” is dead. Even IF we were to run out of petroleum based energy sources, there are far more technologies out there we could and should turn to. This doesn’t relate to gold and silver.

    Though gold and silver had many uses besides money and currency in ancient days, they have far MORE practical uses today!
    The reason why real metal (not paper stocks) of gold and silver supplies are limited today is strictly due to manipulation of the markets by illegal naked shorts and futures that have pushed the phony price of these metals so low, they can not be produced below the manipulated market price.
    This is about to create a financial meltdown and economic disaster.
    What we share with Rome’s fall is not “peak gold”. It is “PEAK CORRUPTION and a VILE SOCIETY” that spawns the suicidal culture we have today.

    • Willsee,

      I appreciate you stopping by the site and leaving a comment. While your comment makes sense at face value, when we look into the details… we can find error in the logic. I am not going to try to convince you here with a few sentences… even if I could.

      But, I would like to provide this information for other readers.

      You made some incorrect assumptions as it pertains to oil… especially the notion that “IT IS FAR MORE PLENTIFUL TODAY.” Even though the energy industry has tacked on supposed trillions of barrels of new oil resources… these are not true economic reserves.

      This is where the FALLING EROI – Energy Returned on Invested comes in. The U.S. was producing oil back in the 1930’s at an EROI of 100/1… which means it cost the energy of one barrel of oil to produce 100 barrels for market.

      In 1970, it fell to 30/1 and today its below 10/1. SHALE OIL coming out of the mighty Bakken Field has an EROI of 5/1, and all that supposed 1 Trillion barrels of OIL SHALE in the western U.S. (not to be confused with shale oil) has a lousy EROI of 2/1.

      Are we seeing a trend here? That’s right. We extracted and burned the good stuff already and are now forced to go after the more expensive, garbage oil.

      Our modern society needs something north of a 10/1 EROI to survive. It doesn’t matter how many trillions of barrels of CRAP OIL the industry brags that we have… if the EROI ratio is too low to pay the bills.

      Unfortunately, this factor is not understood by many. All the public hears is TRILLIONS OF BARRELS. Hell, oil shale isn’t even oil… you have to crush and heat the stuff to make garbage oil… which is why the EROI is so low.

      Once we understand the TRUE ENERGY DATA, peak oil is here to say… whether the public wants to believe it or not.

      steve

      • Maybe so but in the 30s we were on a form of hard money; now we only use fiat so it could be 10000:1 and it would just be a few clicks of a mouse to get it out. Peak oil meet funny money.

      • I just replied to the same guy, Steve, but did not see my response show up. But I concur strongly with what you just tried to explain to him. Nicely done.

        • Rock,

          Sorry… for some strange reason you comments went into my spam folder. Just published them. Sorry.

          steve

    • Willsee,
      Part of this ‘peak corruption and vile society’ can be blamed on Inflation…. which, returns back to the original premise of this gentleman… Huh? What, you say?

      This is known as the Red Queen problem… as in Alice in Wonderland… which was about the same things going on in the British empire at the turn of the last century…

      The Red Queen you remember, makes you run faster and faster, to remain in the same place…
      This causes people to see “everybody is doing it”, doing what you ask?
      Cheating. Cheating anyway they can to remain in the same place.
      As costs go up, wages and prices cannot keep up, can they? No. So the culture degrades with the money over time.

      Everything, is One, as is said by some, including myself. All things are interrelated and feed back loops make complexity fragile, and societies response, more complexity, even more fragile and evil…

      until… you wake up one morning… and the Visigoths(China) says “the color of your money is no good…” and you laugh at the vandals sacking your neighborhood because you think Emperor Obama is truthful when he tells you they are there to help you…

    • Willi See, it’s like you didn’t bother to read Ugo Gardi’s excellent analysis posted above.

      The Peak Gold referenced was in ancient times, when there were no giant Catepillar Earth Movers, Cranes, Dumptrucks, pneumatic drills, conveyor belts, factories (and Oil/Diesel Trucks and electrical grids to keep all these tools running).

      Of course gold, silver, and all precious metals have practical applications.

      Do you believe Professor Gardi is ignorant of this?

      What he was hoping an educated reader might understand is silver/gold back then (in Roman Empire days) did not “produce” energy in the sense you could feed a man grain, that grain is turned into energy, and that energy would fuel that man to fight an enemy, dig a ditch, build an aqueduct.

      That you’re missing the argument of his shows you might suffer from aliteracy, not illiteracy.

      Gardi never said gold and silver had no use. In fact, he spent a lot of time here explaining the practical “use” of gold and silver as a means of “value” storage which would buy a solider’s loyalty or purchase grains to fuel that solider from faroff lands.

      That said, you’ve also gone off on a tangent here with some kind of Glenn Beck/Alex Jones soundbites which make no sense. Especially your comment, “We are being forced to use “fossil fuels” today and they are far more plentiful than we presumed years ago. “Peak oil” is dead.”

      Really? That’s why during the Shock and Awe invasion the only building American Troops guarded once inside Bagdhad was the Iraqi Oil Ministry, while looters broke into museums and destroyed and carted off some of the earliest artifacts of “The Birth Of Civilization”?

      And that’s why the CEO of Chevron said a week or two ago “$100 oil is the new $20 oil…”?

      Do you not understand the difference between easy to get at oil and oil which takes many factors more to search for, discover, recover, transport, refine, transport again?

      Yes, the Roman’s gold peaked on their Continent (the Roman’s did not know the Americas existed): It used to be gold and silver could be hand mined from deposits found on top of the ground or in shallow mines or in river streams. Pick axes, shovels, push carts, simple water sluices. Those were the tools for the easy to find stuff.

      What the author hoped you might grasp is Peak Gold in the days of the Roman Empire meant Peak Growth for Empire. Gold funded the Roman Empire’s over-reach.

      What the author also hopes you might buy into is today’s Peak Oil means the end of Peak Growth for another Empire (an Empire of Debt) which was all made possible by easy to get at, cheap, formerly abundant Oil.

      Look, for the first 125 years after Drake’s rig up in Pennsylvania, you simply stuck a straw in the ground and let the black gold gush. Those days are over. Every major field of “easy to get oil” has peaked on this planet. There has not been one major “easy to get at” oil field since the 80s.

      Before you comment again on this thread, I advise you to read up on an easy concept: “Energy Returned On Energy Invested”, or as Steven’s icon puts it “EROI”.

      p.s. And as for your limited knowledge of gold and silver prices:

      Goldcorp’s CEO, Chuck Jeannes, just told investors that every ounce of gold his company mines is profitable above $810 an ounce.

      Barrick Gold CEO, Jamie Sakalsky, recently said every ounce his company produces above $899 an ounce is solidly profitable.

      Just so you know, gold futures at this very second just printed $1,314.30 per ounce. Were gold and silver supplies really limited – as you contend – and prices constrained – again as you contend – how in the world do you explain $1,314.30 an ounce gold and a 14 year old uptrend in gold prices?

  14. daddy warbucks | March 25, 2014 at 12:23 pm | Reply

    ”Russia Prepares Mega-Deal With India After Locking Up China With “Holy Grail” Gas Deal

    Today, from Zero Hedge

    “We just have one question: will payment for crude and LNG be made in Rubles or Rupees? Or in gold. Because it certainly won’t be in dollars.”

    • If it won’t be made in dollars, there goes the “Petro Dollar’. And whither the Petro Dollar goes, the common US Fed Reserve Note trails right along.

      This can be a big deal. You do realize the Gadaffi (of Libya) was murdered because he was about to sell oil priced in other than Petro Dollars? Watch out when Russia does the same; Putin won’t be easy to control.

  15. This was also Martin Armstrong’s hypothesis, so you are in excellent company.

    EROEI, Energy Return on Energy Invested, I fear, will be the cause of much pain, and the elite to begin the new global feudalism after the passage of the Black horseman(paradigm of banks and democracy), the monetary ‘reset’…

    then it will be Biblical; as in ” … a danarius for a loaf of wheat, or three loafs of barley, and spare ye not the oil and the wine…”
    a danarius being, a days wage… being doled out by our new masters…

    Sorry for the religious references… but if it fits…

    • Excellent point @ Piper Michael I see you know where we are at in the book of Rev 6. I encourage anyone who is not afraid to read that chapter and see the order of things from a spiritual standpoint. Steve is on point with the peak oil thing. Every nation that has ruled has something that they depended on which came to the peak point, and has caused them to fall when they could no longer afford it however they were getting it before. For America it is oil, for the next empire it will be gold. Gold will be the final bubble and the demise of the next ruling empire. China’s appetite for gold is no coincidence. In history, gold has been always used in idol worships even back to Egypt. As it was in the beginning so shall it be in the end. Keep silver and gold, land, food and whatever the world wants to accept when all this comes to an end and you need to trade. But put no trust in them for none of these things will save you.

      P.S Steve you are wasting your time answering “2014”. Site trolls and post shills will always look to discredit the work of others. It would be better to answer someone who wrote a paper with pure lies than to answer a person who only criticizes the work of others. I read your post and have never seen where “2014′ has come up with anything informational, just a bunch of site trolling and worthless shill typing. I hope 2014 is getting paid for this because it sure is hard to work for free these days and if 2014 does work for free, then the title of “site trolling slave” is warranted. LOL!

  16. Ngallendou Dièye | March 25, 2014 at 1:38 pm | Reply

    Some of many minor contributing factors to imperial decline:

    Jewish synagogues in nearly every province and city quietly converting pagans to theism. (Cp. Creationist beliefs)

    Messianic (Christian) Judaism, overtly converting Jews and pagans to a One Lord faith. (Cp. home schools and house churches)

    Tyrannical rule by emperors, none of whom was equal to the task. (Cp. Ndda)

    Lead lining laid down in aqueducts, ‘dumbing down’ the population. (Cp. fluoride, chem-trails)

  17. I guess the ND Bakken formation is paper oil too

    • 2014,

      Gotcha. I see now. You really aren’t interested in debate… rather just throwing out silly inept one-liners. You are more than welcome to continue to do so at your own expense, but this is my last reply to you.

      (LOL) You are a waste of my EROI… dear sir.

      steve

  18. I have only read as far as “The Romans had been so successful at that not because of special military innovations. The recipe for their success was simple: they paid their fighters with precious metal currency.” I promise I will read the rest of the article this evening, but I wanted to comment on that statement only to say, “are you kidding?” In my limited understanding of Roman history (probably know more that most, but no expert) there are many examples precisely of the innovative nature of the Roman military being the primary factor in the prowess of Rome’s Empire. The defeat of Bodacia’s uprising in England, of Tigranes in Armenia and of Mithradates in Greece are all examples of Roman forces outnumbered as much as 5 to 1 overcoming their foes in devastating defeats precisely because of the innovations in organization, discipline and co-ordination of the Roman Legions. I’m still interested to read the rest of the article, but you lost a lot of credibility by apparently being ignorant of the primary role of military innovation in the greatness of Rome. This claim also seems ignorant of the fact that for the first few hundred years of Romes rise to eminence, the military was based on conscription of property-owning Roman citizens.

    http://en.wikipedia.org/wiki/Roman_army_of_the_mid-Republic

    • KnewKnews,

      You may be correct that innovation and military technology assisted the Roman legions in being superior, but we must remember, this technology cost a lot of GOLD & SILVER. It didn’t come cheap, just as it doesn’t come cheap today.

      The U.S. advanced F-22 Raptor jet is a cool $150 million a pop. While the military probably provides the pilot a nice paycheck, it’s nothing compared to the money that went into buying that advanced technology.

      The same can be said for the vast amounts of gold & silver that went into making Roman military siege weapons and fortifications.

      This is the very thing most do not understand. Technology costs a lot of fiat money today or gold-silver during the Roman times. And the more complex the technology the higher EROI (Energy Returned on Invested) of energy is needed.

      The collapse of the Roman Empire was due to its falling EROI… which followed through to the decline of gold and silver production.

      steve

      • Hi Steve,

        I don’t necessarily disagree, but from a historical perspective it’s far from a one to one correlation.

        For instance, when Sulla devastated Mithridates in Greece he did so with a vastly outnumbered army. Also, compared to the lavishly ornamented army they faced, the Romans were positively austere. It was the army with far less gold and silver that carried the day.

        As a general rule, simply armed, austere Roman armies repeatedly dealt devastating defeats to their lavishly decorated foes. The triumphs held after victories were mind-blowing displays of the opulence of their defeated enemies.

        Likewise, Rome rose to power based on a conscription military, i.e. mandatory service. Early Rome did not have more gold or silver than its neighbors, quite the opposite by my understanding.

        It may be worth mentioning that Rome did run out of enemies to conquer. Perhaps the distances involved became an impediment and perhaps as a result the culture turned inward.

    • Knew… though you have some valuable points to add to the mix, it’s hard to understand why – after the site author goes to the trouble of POINTEDLY STATING that he is not the author of the piece…

      you need to degrade the value of your contribution with – “you lost a lot of credibility by apparently being ignorant of the primary role of military innovation in the greatness of Rome.” One could easily ask where the’ ignorance’ here truly lies… but let’s just move on and try to stay away from loaded terms that have little reason to be used here.

      Both you and WillSee have recognized that a theory which purports to ‘explain’ EVERYTHING via a simplistic concept like Peak Gold has more holes than a piece of swiss cheese. But….

      that hardly invalidates the exercise of looking at the role of the metals in the rise and fall of the Roman Empire. In fact, a blending of all of these points of view will likely lead to the most balanced and accurate summation of the historical ledger.

      For instance;

      “What we share with Rome’s fall is not “peak gold”. It is “PEAK CORRUPTION and a VILE SOCIETY” that spawns the suicidal culture we have today”… is actually an insightful vein of understanding as to how the quest for gold and silver lucre led the Romans to debase their military and civil cultures – and opened the door to systemic corruption and decadence.

      Up until the time that they wrested control of Hispania from the Carthaginians, Rome had successfully used a non-precious metals monetary system, and as KK points out, had a citizen-based army… these are potently connected facts! When Scipio reduced the Iberian Peninsula to Roman vassalage, he was intent on securing it’s mining riches in his own and private hands… there was no Imperial mandate to conquer all of Spain! What the Romans fell prey to was the lure of supplanting Carthage in the eastern metals trade… wherein the 12:1 ratio of gold/silver in the west was arbitraged against the 6:1 ratio in the East… a trade of fantastic profit which more than paid for the silks and other goods arriving from the Silk Road!

      Avariciously increasing the mining of silver – and the misery of countless human beings – to supply this trade was in many ways the underlying cause of the downfall of Rome*… for not only did it lead to the replacement of it’s monetary system with an easily debaseable gold and silver system… in the hands of the moneychangers as always!!!!…., but it allowed for the erosion of its’ military might via the hiring of mercenary non-citizens whose loyalties were more to the denari paycheck than to the Empire who they served.

      So both of you are right… though at the same time failing to acknowledge the truth of what was written in the original article as equally valid. It was only after the capture of Valerian, and then the split of the Empire into the tetrarchy that the real devaluation of Rome’s hegemony became de facto… and this was arguably more due to the loss of the forementioned arbitrage trade to Constantinople and points east than to any intrinsic shortage… a la “Peak Gold”, that it suffered internally.

      The main trouble with any work written by an academic authority is that it reflects the narrow specialised interest and knowledge base of the author’s training… long gone are the days when wide-based interests were considered a valid and necessary part of an academics’ training. You have to take that into account when reading this gentlemans’ interpretation of the record.

      Offsetting that, the work which is being done by our host here is the perfect antidote to the problem of specialization of knowledge… a syncretic blending of understanding by the layman or “enthusiast” can prove superior to the narrow viewpoint of the “experts” … and here is the proof of the pudding! How’s about we celebrate the happy conjunction of our points of view here… rather than descend to silly pejoratives and shallow critique??? Win Win.

      *it’s a sign of western ethno-cultural supremacism that the idea that the “Roman Empire” ended with the fall of “Rome” is so widely believed. The Roman Empire, in it’s eastern carnation… eg. Byzantium… lasted well into the C15th. And it’s fall was primarily due to the machinations of the venetian banking interests of the former western Rome than to any other factor! All of which is playing out right now – live time – in a rematch which will shake the balance of global power in a manner not seen in a millenium. You’d never have a clue if you depend upon western media for your understanding of the world we live in!

      • Hi Roguefaction,

        Thank you for the thoughtful reply.

        You are right. I did not realize this was a guest post. I probably just skipped to the title and began reading.

        I enjoyed your response and it seems we are basically on the same page. I still feel that “not because of special military innovations” is a rather ignorant statement. Perhaps I could choose a less “pejorative” word than ignorant. My intent was not to ad hominem.

    • I was pleasantly surprised by the remainder of the article. While I’m not convinced there is a direct correlation between Romes lack of precious metals for currency and their erosion of military prowess, it certainly is true that Roman coins changed a great deal over time. I have a small collection of Roman coins. The ones from the Republic are thick and about the size of a silver dollar. While coins from the late empire are about half the size of a dime.

      Other factors in Romes decline that warrant mention and in some cases have parallels to today:
      – The rise of Christianity as a competing power structure, convincing many to focus on the after life, not the present one. Also, the Church did not need Rome to survive in order to survive its self. Rome was conquered by Christianized kingdoms.
      – The Huns forcing many Germanic tribes into Romes borders for protection.
      – The conversion of Roman family farms into large factory farms (sound familiar?), shifting population centers to cities and dissolving the original meaning of citizenship.
      – A population primarily engaged in distraction and elites happy to indulge and entertain (free wine, etc.)

  19. Too many people choose to argue rather than think: From Daniel Webster…..Of all the contrivances ever produced designed to cheat the laboring classes of mankind; none has been more successful than that which deludes them with issues of fiat, I owe you nothing, paper money!! Think about it folks!! As my deceased mentor once explained to me: Paper money won’t be worth using as toilet paper, because it will give you printers’ ink poison. Go figure it out people. Our excuse is that the grocery stores etc. won’t accept gold and silver coins driven out of circulation by Gresham’s Law bad money drives out good money from circulation causing among other things inroads towards inflation. France was brought back to gold when Nepolian confronted his piers, the French Ministry, with paying his troops in gold coins or he and his troops would be leaving their battlefields for the French Ministry to fight its own battles. The French Ministry got the message and their troops got the requested gold coins. We are as intelligent and thoughtful are we not as are the French?

    RUSS SMITH, CA. (One Of Our Broke, Fiat Money States)
    resmith1942@gmail.com

  20. What is CE? What happened to B.C. and A.D.? Did I miss something? Where have I been?

    • KCM,

      http://en.wikipedia.org/wiki/Common_Era

      But I’m with you; too many abbreviations cause newer readers of a writer’s column to get lost if they can’t stop to look it up.

      A great example is financial writers like when referring to a market that has its own lingo and lexicons, like commodities futures markets…something few have intimate knowledge of.

  21. The author states that the fuel that Rome ran on was grain . Technically correct , but he failed to mention that Rome ran on slavery . Slaves were the equivalent of today’s modern appliances and equaled or outnumbered the free population . If they ran out of gold , one reason could have been the Huns , who under Attilla kept demanding more ransom every year in gold and was always surprised when the Romans were able to meet his demands. Rome was also overrun with Illegal immigrants that were escaping the Huns . That and the failures of foreign military adventures doomed the western empire in it’s later years .

  22. marcus wallett | March 26, 2014 at 10:29 am | Reply

    Rome became too complex in terms of its overextended western and eastern empires and suffered from the law of diminishing returns in terms of exploiting capital — be it wheat, barley, slaves, gold and silver, etc. Another problem was that the German mercs that they were employing in the west decided that they didn’t need Rome and set about carving out nations themselves — it sowed the seeds for the creation of England, for example and brought about the demise of the western half of the empire.

    P.S. The poster who talked about Boudicca and England has got his or her historical periods wrong. England didn’t exist during the Roman period.

  23. So nothing ever changes. Real money is silver and gold. And armies’ main purpose for empies are not for protection at home but rather for expansion and maintenance.

    Interesting that even before they debased the Denarius silver content was a mere 3-4 grams or barely 1/10th oz. The soldier got 1 per day. Powerful stuff no?

  24. North African shores the desert we see nowadays?
    you are so ignorant of north Africa. you think we are all like the towel heads you see in Saudi Arabia?!
    go travel the world, go to Morocco, Algeria and Tunisia, and cut the bullshit. Carthage was considered until after the collapse of the western empire as the roman food basket for the eastern empire which quickly took control of it again in the 6th century. the province of Mauretania (modern day Morocco and Algeria) consisted of the most productive cities of the empire in terms of agriculture, Lixus, Vollubilis, Tinjis, Constantina. Hell. Tunisia in 1987 realized in one year crop, double its needs in wheat… and you are telling me desert we see today.. you are such an ignorant Hollywood believer. you don’t see in north Africa only desert and assume yourself all knowing. We did our part in salvaging the roman empire at the time, providing soldiers, slaves, and permanent contact with deep Africa. while you say in this so called post that goods came from China and India, cut the bullshit, Rome was not even aware of what was behind Parthia (modern day Iran) their Nemesis. the goods came from Arabia, Judea, and provinces of North Africa, or you just want to deem us useless to the empire?!

    We did the best we could as Numidians Berbers and Arabs to salvage what we could of the empire, we were loyal to the empire till the very end. we were nicely romanized and mediterraneanized. And instead of saying that we turned into a desert like an ignorant, go do this experiment: Go to any village around each of these cities: Algesiras (spain), Nice (france), Genoa (Italy), Sparta(Greece), Izmir(turkey), Tripoli(Lebanon), Alexandria(Egypt), Sfax(tunis), Constantina(Algeria), Chefchaouen (Morocco), take an old farmer from each of the villages, put them in a Roman bath (or Arab Hammam) and then put them around a table with olives, goat cheese, olive oil, wine, figs and grapes, and tell me if they wouldn’t recognize each other!!

  25. The power to project power is waning in the west. I suspect that is why they are so reckless of late in antagonizing Russia, because time is not on their side and they will lose what they do not use…and soon. There is also an awakening of the general population as they feel the pinch of inflation and negative interest rates more acutely, and realize something about the money system (comprised of bits generated inside computers) is seriously wrong.

  26. There is no solution to our problems with the systems that exist presently. All the models for the future (and are showing up presently), are based upon “growth” of economic systems which are not sustainable over time with growing populations. This becomes even more apparent and critical with debt based systems where we sell of our future potential for advantages now. Just as we used to sensibly store grains (in many cases controlled by the kingdom) for future times of need, we still have a packrat mentality which induces us to store wealth for future need and opportunity.
    At what point does this sensible act become ridiculous and destructive? Enormous monopolies create wealth with a disproportionate distribution of these rewards to those who are active participants in it’s creation. Just as the wealth of the Roman economy was “lost” to export of goods and labor. as well as exorbitant savings by the wealthy as fear became more predominant when systems showed signs of failure, so it is today! Trillions of dollars are “stored” around the world, and become an “income” source on their own. Of course you gentlemen see the problems developing in our system with the “financialization” of everything. This is greatly compounded by the hiding of wealth in offshore accounts, or personal or corporate vaults, where taxes are now longer paid to the systems that allowed it’s creation in the first place.
    There is legislation coming into effect which is going to try to mitigate some of this, but many say Obama’s plan is a micro solution which is only a type of monetary control that will have negative consequences!??
    I enjoy investing, and have PM’s stashed away as well….but I have to consider weather I am not also guilty in some degree, considering that only a fraction of a single ounce of gold or silver is one mans share on this planet if dispersed equally?
    Isn’t it a biblical parable where three guys are given substantial bundles of sheqels, where only the dude who returned with the same amount was severely chastised? The logic being that the guy who lost most of his quid was making the entrepreneural attempt, which stimulated the economy and assisted his fellow man?
    I ask myself with all seriousness (and you gentlemen) is my/our investment in equities the best sustainable method, or is building something of quality not the greater reward for all?
    I propose one more precept, in which I appreciate your consideration: Is a great change not inevitable or necessary? I don’t know much about the realities of financial collapse or scriptural “end times”, but with thousands examples of mistakes we as humans have made and continue to make, it is for me condensed to one primary conceptual issue. When we observe and analyze systems of power, corruption, and forced inequities and we come to conclusions like: “Oh…that’s just human nature”, are we not condemning ourselves personally, as well as an entire species!?
    Well.. I’M MAD AS HELL AND NOT GOING TO TAKE ANY MORE…he hee.

    • “.but I have to consider weather I am not also guilty in some degree, considering that only a fraction of a single ounce of gold or silver is one mans share on this planet if dispersed equally?”

      Only from abundance can you help someone. In this case with currency or money accumulated.

  27. If this article is accurate then this proves the case against a hard money supply. Namely the Roman Empire needed new money to enter the economy to keep it running but since gold and silver couldn’t be reliably mined they got into trouble.

  28. Pure silver almost certainly rose in value over the period concerned and the annual supply would not have been much as a percentage of that circulating. The parasitic class had to impose the debasement on people increasingly aware of the barbarians up the road who were prepared to pay in bullion. Then, as now, the ruse could only work for so long.

  29. Isn’t this idea, that an ever-expanding money supply (be it gold or paper/digits) is necessary to keeping an economy running, largely an economic myth? Being that gold and silver are practically infinitely divisible, why wouldn’t almost any amount of gold or silver do? Simply divide the supply into smaller units, or leave the units as they are, and the prices of everything will adjust downward.

    I think Rome fell because it became too corrupt and weak, and was conquered largely from within. Trying to blame their downfall on a lack of gold is simply violating Occam’s razor. You’re formulating a more complex explanation when a much simpler one will suffice.

    Will the American downfall be the result of not enough gold? I doubt it. We (the people in charge) are purposely destroying our money (it is not redeemable in gold or silver) but it’s not like we don’t, or didn’t have enough gold. The removal of gold backing from the dollar was not because there wasn’t enough gold, but it was a conscious decision to rob Americans of their gold and substitute an inferior money in its place. It’s not complicated.

    Rome fell because, like America, its empire became vastly over-extended, and was morally and spiritually corrupt. The lack of new gold reserves was probably a symptom rather than a cause. Don’t make this more difficult than it has to be.

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