The Twentieth century may be remembered as the century of excess. In every area, more things were done in the Twentieth century than in any other century in history, and in many cases, more than in all previous centuries combined. The Twentieth century saw some of the most destructive wars in history, the development of the Atomic Bomb, the beginning of air and space travel, the colonization and decolonization of the Third World, the rise and fall of Communism, dramatic improvements in the standard of living, the population explosion, the rise of the computer, incredible advances in science and medicine, and hundreds of historically unprecedented changes. The Twentieth century also produced more inflation than any other century in history.
Inflation is nothing new. Roman rulers produced inflation in Third Century Rome by debasing their coins, China suffered inflation in the fourteenth century when the Emperors replaced coins with paper money, Europe and the rest of the world suffered inflation when gold and silver started flowing into the Old World from the New World in the sixteenth century, and the French and American Revolutions destroyed currencies in each of those countries.
Nevertheless, as we shall see, the Twentieth century produced the worst inflation in human history. Every single country in the world suffered worse inflation in the Twentieth century than in any century in history.
What lies ahead in the Twenty-first century? No one knows, of course.
There will be wars, governments will collapse, ideologies will gain control over economic common sense, and governments will be tempted to use inflation to solve their economic and financial problems. We must remember that inflation is a choice that can be avoided. One prediction we would like to make here is that if the Twentieth century was a century of the proliferation in currencies, the Twenty-first century will be a century that sees a reduction in the number of world currencies. Central Banks were a growth industry during the Twentieth century. Few countries had a Central Bank in 1900, and most countries and colonies linked their currencies to one another through the Gold Standard.
As countries gradually removed gold and silver from their national monetary systems, and replaced them with paper, inflation resulted…