Two Trips Down (French) History Lane

One plank of goldbug culture is an affection for history - specifically, the history of fiat-money decline. The favourite "story" is that of the Weimar Republic in 1920-23, with the rise of Hitler being used as a warning against present debasement.

Another episode, though used less frequently, is the French Revolution. This article at DollarCollapse.com casts the Terror as the result of fiat-money inflation and economy-wide price controls. As is usual with critics, the good guys are presented as Cassandras.

France also figures in another goldbug capsule history - the France of the 1960s. It's recounted at the end of a recent Daily Reckoning article as a lead-in to more current complaints from that country:

For those of you who were around… Do you remember what happened in August 1971? Yes, that’s when Richard Nixon closed the gold window, removing gold as the backing for dollars. He did that, because France’s Charles de Gaulle, called the US’s bluff that they had enough gold to back their IOU’s, and when that happened, Nixon had to shut the gold window and make the dollar a fiat currency.

Well, here we are in 2010, and another French President, Sarkozy, is making things difficult for the dollar… French President Nicolas Sarkozy urged for an end to the US dollar’s global dominance, warning that its weakness poses an “unacceptable” threat to European competitiveness.

“The monetary disorder has become unacceptable,” said Mr Sarkozy, who later this month is due to address the world economic forum in Davos. “The world is multi-polar, the monetary system must become multi-monetary,” he said in an apparent call for other currencies to be promoted over the greenback....