The Major Difference Between Rome and the U.S. – Electronic Transfers

We are here in Rome trying to learn something - on your behalf, of course, dear reader. So far, what we've learned is that the Abruzzo and Barolo wines are rich, complex and smooth. The wines we've tried from Compania, on the other hand, seemed a little green...and a little sharp. But the Barolos tend to be expensive. Last night, our restaurant didn't have a single one less than $150.

As for the world of money...we have found out what brought the empire down. Money, of course. They ran out of money. But that was only a part of the story...and not even the most interesting part.

"The empire held together pretty well," explained our guide, "at long as it was controlled by Rome's leading families, who shared the same culture and the same values. But as it expanded, it came into contact with more and more groups. And in order to protect the borders - which had become vast even before the empire itself was officially recognized under Augustus - more and more soldiers were required, and more and more money.

"I saw in the paper that you Americans opened a huge embassy in Iraq and that it was very expensive. Well, that's what the Romans did too. They had garrisons all over the empire. And each one was expensive to maintain. The 'cursus honorarium' - it was the route to power and prestige, like today, we go to a good college and then get a job with a good corporation and then we might go into politics...well, then, young men who were ambitious had to go into the army and take their post at these distant garrisons. And then they began to bring people into the system from the outside...and spend their lives outside Rome. Many leaders were no longer from Rome and some rarely even came to Rome. And many of the soldiers weren't Roman either.

"When the empire was still expanding, there was a lot of money coming into Rome. Whenever they conquered another city or another tribe, they brought in more gold, silver and slaves. But when the empire stopped expanding...they had the cost of maintaining the borders, but no source of revenue."

Now, let us check in on today's empire. Where does it get its money? How could it afford such an extravagant embassy - in an area where it has no real interests? How can it afford the trillion-dollar tag for the Iraq War? We will state the obvious: it too is running out of money. But unlike the era of Caesar Augustus Caesar or Romulus Augustus our modern government can conjure money out of thin air. It doesn't even have to print it up on a piece of paper. It's enough just to send an electronic transfer.

Now we will ask you a question, dear reader: What is an electronic transfer? Or, in an electronic transfer, what is transferred?

"Electrons," you will answer. Or perhaps "information." Or a "symbol of wealth"...something that represents money.

And here...back to penises for a moment. We once overhead a woman in a tour group in Paris, gazing at the Place de la Concorde. The leader had just informed her that the long, talk obelisk in the middle of the square might be considered a "phallic symbol." She turned to her neighbor and asked:

"A phallic symbol of what?"

The electrons...or even the paper dollar...may be a symbol too. But a symbol of what?

More to come...

Bill Bonner
The Daily Reckoning Australia

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