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<p>[QUOTE=&quot;fatima, post: 1538990, member: 22143&quot;]The Colonials had created fiat money called Colonial Scrip.&nbsp; It allowed the Colonials to avoid dealing with the BoE and allowed them to control the money supply.&nbsp;&nbsp; (At the time the global finance system was maintained by the BofE managing gold &amp; silver and providing settlement.)&nbsp;&nbsp; Colonial scrip wasn&#039;t backed by anything but promises.&nbsp; When Benjamin Franklin went to England and described the practice to the finance officials and BoT, the bankers were horrified as they knew what this meant. </p><p><br /></p><p>The concept of fiat was still new at the time, but none the less they realized the underlying issues.&nbsp; It didn&#039;t take long before they decided to teach the colonials a lesson and thus started to flood the colonies with scrip that dramatically increased liquidity and eventually led to financial collapse of the system.&nbsp; There was a short economic boom followed by a dramatic period of hyperinflation which ended with people not being able to purchase anything unless they held gold &amp; silver.&nbsp;&nbsp; It&#039;s considered the real, but not talked about, reason for the American Revolution and how a small group of people got an area as large and disparate as the 13 colonies with primitive communications, to agree turn on their own government.&nbsp;&nbsp; </p><p><br /></p><p>It&#039;s also the reason the framers were very keen to put into the Constitution the statements about gold &amp; silver being money.[/QUOTE]</p><p><br /></p>

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