Posted Dec 16, 2013 by Martin Armstrong
In Iceland, they actually imprisoned the top four bankers that some call the “financial terrorists” that ruined the country. This is establishing a trend that we will indeed see materialize even in the USA after the 2016 Presidential Elections. Riots against bankers have been frequent throughout history. I have stated before that the term Black Friday comes from the Panic of 1869 in the USA where they were dragging the bankers out to the streets and hanging them.
Riots against bankers have been very common especially when international lending has led to economic chaos. When Edward II (1307-1327) of England was captured, riots broke out in London. The mobs attacked the Italian bankers who had extracted huge interest payments from England. The famous Italian bankers at the time were the Bardi family. The English mob attacked their London office in 1326 illustrating the age of nationalism and protectionism that was festering during the 14th century. As much as things appear to change, they remain very much the same at the root core
Those who think the Gold Standard brings stability must also believe in the Tooth Fairy. There was a huge CONTAGION that became widespread because of debasements during the 14th century. The silver to gold ratio was disrupted everywhere in Europe thanks to French debasements. The ratio stood at 13.1 in Florence compared to 12:1 in France during 1316 who was trying, like the Silver Democrats of the 19th US Century to overvalue the price of silver. By driving the price of silver even higher relative to gold, they forced the ratio in France down to 5:1 in 1343, setting off riots in Florence. Silver was being drained from the local economy flowing to France where it was over-valued and this created a sharp recession in Florence with the shortage of money (silver) for domestic use.
Why? For you see, wages and local commerce were conducted in silver. Gold was used only for international trade. Driving the price of silver higher raised the cost of production which simultaneously reduced the value of trade and even outstanding loans made to individuals and sovereigns alike. This caused a drop in production and rising unemployment. Hence, the first riot came in 1343 whereby the French Debasement had contributed to the impatience of the population. Switzerland did the same thing pegging the franc to the euro because the franc was rising and manufacture threatened to leave. Hence, Switzerland has imported massive inflation raising the cost of living and doing business there to TWICE that of the United States.
The Political-Economic Revolt of 1343 in Florence may have had its roots in corrupt government as we are also seeing in Europe and Ukraine, but it was set in motion by the economic events driven by over-valuing silver. There was an uprising of workers that erupted on September 24th, 1343. The people stormed the palaces of the rich merchant-banking families located in the Oltrarno quarter of the city that was on the left bank of the Arno River. This was where the palaces of the Bardi, Frescobaldi, Rossie, Nerli, Mannelli, and many others were located. The rioters barricaded the bridges and on the 25th, and they captured the palaces of the Rossi and Frescobaldi. They also stormed the Bardi palace forcing the members of that family to abandon their fortress and flee for their lives. The mob then sacked the Bardi Palace and set it on fire. Contemporary accounts tell us that the Bardi lost that day 60,000 florins in the destruction that took place in Florence – truly a vast amount of money that would be in the tens of millions of dollars today.
The Florence monetary system was a Two-Tier system whereby gold was used ONLY for settling international trade and silver was used for domestic commerce. Those who simply think because coins were precious metals and thus were not “fiat” yielding some land of Utopia where the value of money was constant while assets rose and fell, cannot grasp the simply concept that assets rise and fall ONLY in terms of purchasing power of the currency regardless what you use for money be it gold or St Patrick’s discovery of Slave Girls that were the unit of account for money in Ireland.
The bankers better beware. They will be dragged from their lofty towers and dragged onto the streets. This is NORMAL and it ALWAYS unfolds over and over again. You can cheat the people sometimes and get away with it, but you cannot cheat them day-in-and-day-out perpetually. There is a price for such conduct. It is called a riot.