The Denarius and the Dollar

Sponsored by: Patriot Home Funding

Three years ago, the lovely Mrs. Outlaw and I did the Great West Way loop in England, which is the ancient Roman road connecting London, Bath, and eventually Bristol. It was a great trip and I highly recommend it. We flew into London, rented a car, then made a huge oval over 10 days first to Slough and Windsor Castle, Oxford, Blenheim Palace, Bath, Yoevil, Stonehenge, then back to London and Hampton Court Palace. What a great vacation.

While in Oxford, we visited the Ashmolean Museum, which was founded in 1683 as England's first public museum and the world's first university museum. The Ashmolean has an entire gallery on the first floor dedicated to nothing but money, over 300,000 coins, paper money, tokens, and medals spanning global history, with a large emphasis on England and Europe.

One of the coins that caught my attention was the Roman denarius, which was used throughout the empire for about five hundred years starting in 211 BC during the second Punic War. When the denarius was originally struck and entered into circulation, it was at least 95% silver. The coin was real metal, almost entirely silver, and quickly became a universal currency across all of the Mediterranean because of the full faith and credit of Rome plus the actual value of the silver as a precious metal. The original denarius was also pegged to the aureus, which was a gold coin worth about 25 silver denarii.

Then, starting with Nero, the Roman emperors learned a trick that is still in use by governments and central banks today- debasement. After the great fire of Rome in 64 AD, Nero dropped the silver content of the denarius to about 90%. Hardly anybody noticed, which was exactly the point. Nero started melting down the coins and then restriking them with more copper, which served the purpose of getting more coins out of the same amount of valuable silver.

The face of the coin didn't change, but because the coin was diluted, the government had more coins to spend, and it cost them very little to make that change. Human nature being what it is, once that door was opened, it was never closed. In fact, it got opened wider and wider and subsequent emperors could not resist walking through it. Every emperor who needed to fund a vanity project or a new war of conquest diluted the coin more and more and more.

By the time Septimius Severus took power in 193 AD, the denarius was down to about 50% silver. By the time his son Gallienus was in twilight of his reign in the 260's, the coin had been debased to around 5% silver. It was by then a copper token dipped in silver, and the subjects caught on.

What happened next was entirely predictable. Prices rapidly rose all across the empire. The more diluted coins that were put into circulation, the less each one was worth. Eventually the denarius became so worthless, and so much faith was lost, that soldiers began refusing it as pay, requesting grain and other tangible goods as pay instead.

Fast forward to 2026 and the exact same thing has been happening in our country since 1913. Why do I mention 1913? Because that was the year the Federal Reserve, the creature from Jekyll Island, was created. Since the creation of the Fed and the debasement of our currency, the dollar has lost 96% of is purchasing power. What you could buy for a dollar then costs $30 now, and that is despite all the technological, logistical, and productivity gains of the past 113 years. A generation ago, being a millionaire meant you were rich, now it means you are merely comfortably middle class.

So, what is the difference between the Roman denarius and the US dollar? Nothing. Debasement is the slow and steady erosion of your spending power and wealth. Another name for it is inflation. The economist John Maynard Keynes called it what it really is- theft.

Keynes said, "By a continued process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of its citizens." Economist Milton Friedman put it another way, "Inflation is the one form of taxation that can be imposed without legislation."

The Romans taught us, but we didn't seem to learn, that a currency and its wealth doesn't necessarily die in a fell swoop. Rather, it dies slowly, like water erodes a rock, over time, little by little, as the legislators and central bankers tell us that just this time, this emergency, this continuing resolution, this debt ceiling increase, it will all be okay.... like Covid, stimulus, a financial crisis, endless wars, a welfare state, uncontrolled immigration, a new bureaucracy, NGO's, a Pax Americana.

The last time Congress passed an actual budget, on-time, with all 12 statutory individual regular appropriation bills for a fiscal year, was in 1996. 1996.... Thirty years ago.

They tell us it will be fine on one hand while passing continuing resolution after continuing resolution on the other hand, raising the debt ceiling, issuing more debt, printing more money out of thin air, and breaking promise after promise of fiscal responsibility that is all just empty campaign rhetoric and hot air for Sunday morning political shows and cable TV news split screen pablum.

Like the frog in slowly boiling water, we the people don't notice until the situation is dire, not just merely inconvenient. $40 trillion in debt with rising interest rates all over the world has passed the point of mere inconvenience; it is a boiling hot inferno, and it happened in a blink of an eye. Since the Islamic terror attack on September 11, 2001, our national debt has increased by just shy of $35 trillion or a factor of 7X. I don't have to tell you that 7X increase in the national debt over each generation is unsustainable.

This is why China is sticking to their 100-year plan, because they don't have to win, they merely have to survive while we commit fiscal suicide with each continuing resolution and each further debt issuance, which raises interest rates while the currency debases more and more, the debt becomes larger and larger, and more and more expensive to service.

So, the next time you reach into your pocket and pull out a dead president, remember the words of Ludwig von Mises, who said about the collapse of European economies in the last century, "Government is the only thing that can take a useful commodity like paper, slap some ink on it, and make it totally worthless."