- May 20, 2009
- 144,294
- 66,634
- 2,330
Everyone knows that the Colonists decided to go to war against the British because of a tax on tea, right? Does that really seem right to you? Well there's more to it than that
The real reasons for the Revolution began over a decade earlier and, much like today's kindling pile, took a long time to finally ignite.
A decade prior to the enactment of the Currency Act, starting in 1754, the French and British went to war over control of the Americas. That war ended very favorable for the British in 1763, with the British picking up vast territories in the Americas. Once the war ended however, the British had the problem of how to pay for the war they just fought.
In the Colonies, each State issued their own currency. These were usually limited issues, with no Central bank charging interest. Commerce between the States was slightly complicated with the market setting the price differences between the State currencies. If it was felt that a State unjustly issued too much currency, you would have to ask more more of that currency to but your goods. For example, it might cost 2 NY Dollars to buy what 1 Virginia dollar could buy. None of the colonies were able to mine gold or silver to back their currency, they were almost almost backed by the faith and credit of the respective State.
This worked great for the Colonies, business and trade boomed between them. The problem arose when the Colonies traded with the British. The British pound Sterling was like today's US dollar, it was the world's main currency. The Colonies had very limited ways of earning £. They had to sell the British items that they would pay for in £. When the Colonies had to make payments to the British, they usually used their various currencies. Some of the States tried to take advantage of this by issuing more currency and basically depreciating their currency - much like today's $
The bankers in London were not pleased with accepting essentially trinkets and beaver pelts to pay their war debts, so the Crown passed the Currency Act of 1764 which at first forbade the Colonies from issuing their Currencies and required that all payment to the Crown be made in £ British Pound Sterling. This devastated the local economies. There no half steps or negotiated measures to accommodate and facilitate trade between the colonies and the Crown - just BOOM!
Remember this: The Crown stopped accepting the local currencies and this impoverished the Colonies.
Today, the world takes US dollars, a privilege that our politicians have absolutely abused. We export inflation and pay with depreciated dollars.
The World has taken notice and, while they are not able to pass a Currency Act, in some instances, they have stopped accepting US $ and are accepting Chinese Yuan instead. The Chinese and Russians have been accumulating massive amounts of gold and have been liquidating their US Treasury holding to accomplish this.
It's a slow motion, massive, epic motion- like financial rumblings at the Yellowstone Caldera.
The real reasons for the Revolution began over a decade earlier and, much like today's kindling pile, took a long time to finally ignite.
A decade prior to the enactment of the Currency Act, starting in 1754, the French and British went to war over control of the Americas. That war ended very favorable for the British in 1763, with the British picking up vast territories in the Americas. Once the war ended however, the British had the problem of how to pay for the war they just fought.
In the Colonies, each State issued their own currency. These were usually limited issues, with no Central bank charging interest. Commerce between the States was slightly complicated with the market setting the price differences between the State currencies. If it was felt that a State unjustly issued too much currency, you would have to ask more more of that currency to but your goods. For example, it might cost 2 NY Dollars to buy what 1 Virginia dollar could buy. None of the colonies were able to mine gold or silver to back their currency, they were almost almost backed by the faith and credit of the respective State.
This worked great for the Colonies, business and trade boomed between them. The problem arose when the Colonies traded with the British. The British pound Sterling was like today's US dollar, it was the world's main currency. The Colonies had very limited ways of earning £. They had to sell the British items that they would pay for in £. When the Colonies had to make payments to the British, they usually used their various currencies. Some of the States tried to take advantage of this by issuing more currency and basically depreciating their currency - much like today's $
The bankers in London were not pleased with accepting essentially trinkets and beaver pelts to pay their war debts, so the Crown passed the Currency Act of 1764 which at first forbade the Colonies from issuing their Currencies and required that all payment to the Crown be made in £ British Pound Sterling. This devastated the local economies. There no half steps or negotiated measures to accommodate and facilitate trade between the colonies and the Crown - just BOOM!
Remember this: The Crown stopped accepting the local currencies and this impoverished the Colonies.
Today, the world takes US dollars, a privilege that our politicians have absolutely abused. We export inflation and pay with depreciated dollars.
The World has taken notice and, while they are not able to pass a Currency Act, in some instances, they have stopped accepting US $ and are accepting Chinese Yuan instead. The Chinese and Russians have been accumulating massive amounts of gold and have been liquidating their US Treasury holding to accomplish this.
It's a slow motion, massive, epic motion- like financial rumblings at the Yellowstone Caldera.
