The Monetary System

CHAPTER 2 Modern Times – Liberation and Growth of the Money Supply. The Facts Presented in Monetary Units and Resulting Regulatory Needs

“As soon as Blaise Pascal¹ has convinced scientists about air pressure, it will be easy to deduct that the Archimedes push will also operate on any corpse put in gas and especially into air. The theory will then be ready for hot air balloons to fly into the sky.”

— Gilles Godefroy²

From a monetary point of view, modern times start with the fall of the Berlin Wall, which can be seen symbolically as the final end of WWII or of the so-called “Cold War”. Since military budgets shrank for a while both in the western world and Russia, finance became the core topic of policy makers. If we had to be historians and explain in two sentences what happened, we would say that this starting period was a period of continuous war effort dedicated to scientific development primarily for weapons, with few human resources to use. It was also characterized by the dogmatic fight between the communist centralized economic model on the one side and the free-market economic model on the other. It has to be noted that in the common continuous war effort both were engaged in they started out with similar resources, both human and tangible, also dedicated to economic development. What brutally changed the pattern was, with the fall of the Berlin Wall, the liberation of a huge number of disciplined human resources for whom safety and comfort were a real achievement. ...