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American Revolution Boom and Bust |
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| Uploaded on Thursday 10 July, 2014 to the money trust |
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| The economic causes for the American War of Independence |
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Eighteenth century America was a different continent to what it is today. It was very poor; paupers lived their existence in a state of serfdom; the gaps between rich and poor were extraordinary. The motherland, England (later to become the United Kingdom of Great Britain after the Acts of Union of 1706 & 1707), was the political and economic powerhouse of the British-American colonies, or the "Big Brother".
England had fought wars in Europe which were very costly. A good chunk of its debt was owed, in high probability, to the Bank of England (the first central bank in the world). Hence, to raise much needed finance, the motherland set out on a fiscal programme to tax the colonies—a scheme which was held in contempt by most of the colonists.
The economic catalysts for the American War of Independence have their roots sown in aspirations for social justice, economic independence, prosperity and liberty. Colonial money (from 1775 onwards Continental money) was printed by the colonies as a means to inject cash into the money supply and avoid the need to borrow money at usurious interest rates. Whilst pre-Revolutionary America was still relatively poor, it would have been considerably poorer without this fiat currency as there was a severe shortage of specie money in terms of gold and silver coins.
Great Britain took on the colonists during the revolution, both economically as well as on the battlefield. It successfully forged Continental money on a massive scale, making the currency worthless. The colonies had become relatively prosperous in years leading up to the revolution, only to become poor again as a result of this counterfeiting. |
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