Not Worth A Continental
Authored by Jeff Thomas via InternationalMan.com,
In late-18th-century America, something of minimal value was often described as being “not worth a continental,” which referred to the continental dollar, the American currency at the time of the revolution.
The continental was paper money. It had occurred to the colonists that, as their revolution was costing quite a bit to maintain, they could go into “temporary” debt to finance the war. Soon it became clear that the debt could not be repaid. Also, the printing of paper banknotes resulted in inflation. The solution? Print more of them. Further devaluation of the continental motivated the colonists to print more… then more… then still more. The continental became worthless, either for local trade or for repayment of debt.
The new country, the United States, then did something quite unusual. In its new Constitution, it created a clause to assure that this would never happen again. Under Article I, Section 10, the states were not permitted to “coin Money; emit Bills of Credit; [or] make any Thing but gold and silver Coin a Tender in Payment of Debts.”
The founding fathers of the US had figured out that the issuance of paper currency was a disaster in the making, and in 1792, passed the Coinage Act, denominating coins to be minted. The act authorized three gold coins: $10.00 eagles, $5.00 half eagles, and $2.50 quarter eagles, in addition to silver coins.
Of course, later US political leaders have largely committed the Constitution to the dustbin. Since that time, dozens of countries have followed a similar pattern of war/debt/hyperinflation. Let’s look at a few:
German 100 “billionen” mark banknote, ca. 1923
Reparations for WWI were required in hard currency. The papiermark was printed in mass quantity to buy foreign currency in order to pay reparations. The proliferation of bank notes caused the cost of goods to rise dramatically.
This rise was so dramatic that it led to a flight by Germans into hard assets, to avoid holding paper bank notes. (This is the classic tipping point at which inflation morphs into hyperinflation.) Predictably, governmental operation costs also rose. An increase in taxation was of no value, as it would be paid in the devaluating currency.
If the government stopped the inflation, this would cause immediate bankruptcies, unemployment, strikes, etc. But if they continued, they would default on the foreign debt through hyperinflation. They chose the latter, which, although ultimately more destructive, would buy the politicians a bit more time. (Hyperinflation is seen today as having paved the way for Adolf Hitler and the Nazi takeover of Germany.)
Hungarian 100 million billion pengő, ca. 1946
In 1945, Hungary was severely strapped for money, as a result of WWII. The Hungarian National Bank was instructed to issue currency proportional to whatever the budget required. Silver coinage disappeared. Banknotes were issued with no cover of any kind, and hyperinflation took hold.
As always, the government was confident that it could control inflation, but once hyperinflation took over, it was entirely beyond control. It is important to note that hyperinflation, once it begins, spreads like wildfire. The Hungarian hyperinflation began at the end of 1945 and peaked the following July.
Yugoslav 500 billion dinar banknote, ca. 1993
More recently, Yugoslavia, economically weakened by regional war, had used up all its hard currency reserves and decided to loot the savings of its citizens. This it did through the printing of money and increasing restrictions on citizens’ savings in government banks.
Not surprisingly, inflation rose dramatically. The government reacted by imposing price controls, which eliminated profits, so manufacturers ceased to produce essential goods. By 1993, when prices were doubling every fifteen hours, the country had reached the point that bakers stopped making bread.
Zimbabwe 100 trillion dollar banknote, ca. 2008
Zimbabwe’s civil war emptied the country’s treasury. Beginning in1998, President Robert Mugabe took land and other assets from white farmers and redistributed them to less-experienced black farmers. Food exports plummeted, prompting Mugabe to print more currency. Revenues to government suffered as a result, with wages failing to keep up. Hospitals and schools developed chronic staffing problems, because nurses and teachers could not afford bus fare to get to work. The capital of Harare was without water, because the authorities had stopped paying the bills to buy and transport the treatment chemicals. By 2008, prices were doubling every 24 hours.
There are many other examples, but the ones listed above provide a fairly good thumbnail sketch. There are many paths by which political leaders may destroy a country’s economy through hyperinflation. But those leaders who follow the standard checklist of the most common components to collapse can generally be assured that the economy will be destroyed. Let’s have a look at that checklist:
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War (Can be one major war, or, as in today’s world, perpetual small wars)
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Depletion of gold reserves
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Excessive Debt (Create a debt level that is beyond the ability to repay)
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Devaluation of currency (Print massive amounts of currency to diminish debt)
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Loss of control of inflation (Inflation morphs into hyperinflation—a state in which citizens actively try to rid themselves of the currency, as it is devaluating so quickly.)
We are living in a period in which much of the world has committed the first three to four of the above grave errors and is reaching the tipping point at which the fifth kicks in. It’s important to emphasise that hyperinflation is never actually anticipated by governments; it always occurs suddenly, and it happens very fast. In addition, once begun, it never reverses direction. It always plays out until a complete monetary collapse occurs.
Back in the beginning paragraphs of this article, we mentioned that, in 1787, America’s founding fathers took the highly unusual step of enshrining in the Constitution a control to assure that private banks would never again create fiat currencies. The 1792 Coinage Act provided for a coin of the land—the “eagle,” which was to be made of gold.
The paper continental, along with the silver certificate and the gold certificate, has long since disappeared, but the US gold eagle is still being minted today.
And here’s the interesting aspect of gold coinage: The eagle has the same purchasing power as it did back in 1787. Whilst its nominal value may rise and fall, one ounce of gold purchases the same amount of goods as it has throughout history.
The significance of this is that gold, in essence, does not go up and down in value. Rather, gold is the standard by which currencies go up and down. Over the course of history, there have occasionally been anomalies in which gold is down for a brief time, or it is overbought and a bubble briefly occurs. But gold is like the seas: it has its tides, but like water, it seeks its own level and invariably continues as the standard of value.
In times like the present one, when we may anticipate the hyperinflation of numerous currencies, those seeking to preserve what they have, might wish to turn to gold as a relative safe haven, as mankind has done for 5000 years.
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History is remarkably consistent. From the worthless continental to Weimar Germany, Hungary, Yugoslavia, and Zimbabwe, the pattern is always the same—governments print their way out of trouble, currencies collapse, and those holding paper wealth pay the price. The constant thread running through every one of these episodes is that gold did not fail; the currencies around it did. If you’d like a deeper, unfiltered look at why gold has survived every monetary breakdown for thousands of years—and why it matters now—we’ve arranged a free video featuring legendary investor Doug Casey. In it, he explains what most commentators still refuse to acknowledge about today’s monetary system and what history suggests comes next. Click here to watch the free video now.
Tyler Durden
Sat, 01/10/2026 - 17:30
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