Once upon a time, in a beautiful kingdom, there lived a wise and generous king. The King was loved by all and his prosperity and policy of nobility towards his subjects made him immensely popular. The King was an innovative ruler - a pioneer in his trading methods. He was one of the first monarchs to introduce gold as currency in his kingdom, instead of relying on the bartering system.
The King's idea worked out remarkably well. All his merchants and citizens were pleasantly surprised by this new system and its effectiveness. Gold, being a precious and rare commodity, was the perfect medium of exchange in the kingdom and the King was applauded for his wise decision.
One day, a crafty Wizard appeared before the King. He claimed to have a clever way to make the kingdom even more prosperous and wealthy. The King was intrigued so he asked what it was. The Wizard presented the idea of paper notes. He explained that these notes represented a certain amount of gold and were much easier to carry and trade with.
The King realized the potential of having paper notes to represent gold. The Wizard convinced the King to switch to paper notes and promised that it would bring great financial stability and wealth to the kingdom. Anyone who wanted to retrieve the gold the notes represented could go to any bank and make the exchange. The King saw the wisdom in this and agreed to the suggestion, putting the Wizard in charge of printing the notes. The King was pleased with this new system, as it worked out even better than the gold coins had, encouraging commerce and trade. The kingdom started to prosper even more with the new paper notes. The King was praised for the prosperity it brought to the people, and he made the Wizard his most trusted advisor, putting him in charge of the kingdom’s finances.
Now in the King’s good graces, the Wizard offered another proposal: he suggested that the King should only use paper notes instead of relying on the gold at all. He argued that now that people knew the notes had value and rarely used gold anymore anyway, they would continue to act in the same way as money, so the gold wasn’t really necessary. The King was a bit hesitant at this suggestion, as he thought gold was still needed to maintain people's confidence in the currency. The Wizard responded that the wise use of paper notes would simplify everyday transactions and free up resources that would have been spent on hoarding and protecting the gold.
The King was intrigued and had to admit that the space the gold was occupying and the number of soldiers it took to protect it was growing rather burdensome. He agreed to the Wizard’s proposal and declared that from now on all transactions would be made using paper notes as currency and that the notes could no longer be exchanged for gold at the banks. The people of the kingdom had grown accustomed to using the notes, as they were so much more convenient than gold, and so accepted this without complaint. To many, the King's decision was considered a brilliant step forward.
Unfortunately, the King soon found himself needing money to fund a war against a neighboring kingdom. This was not a popular decision with his subjects, who did not want to be taxed to finance such a costly conflict. The King’s attitude changed and he became discontent and moody, knowing that it would be a hard sell convincing his people that this war was the right course of action. To make matters worse, he was concerned that his decision would lead to resentment and even revolt amongst his subjects. This was the last thing he needed in a time of war.
The Wizard, seizing the opportunity, advised the King to simply allow the Wizard to print more of the paper notes to generate the money he needed for the war without burdening the people with high taxes. The King was intrigued by the idea, realizing that this could be a great solution to his funding problem without raising the ire of the people. He agreed and the Wizard immediately started to print additional paper notes.
The people of the kingdom were none too pleased with the decision to go to war, but they were grateful that the King had not raised taxes in order to fund it. But the war took longer and cost more than the King expected. This meant that the Wizard had to continuously print more paper money to fund the war effort, buying supplies and paying soldiers with it. This put many more paper notes into circulation than had existed before.
The people initially welcomed the paper currency, as it was a huge improvement over the old bartering system and easier to transact with than gold. But over time, the excess of paper money being printed to fund the war caused prices to rise. The currency was losing its value, since all the notes represented was the work the people could do to produce goods and services. More notes were being printed but no more work was being done or goods being produced, so each individual note began to represent less and less of the people's time and energy. However, the people didn't realize why their money wasn't going as far anymore. They only noticed that the items they had previously been able to purchase with just a few notes were now more expensive.
Unbeknownst to the King and the people, the Wizard, who was responsible for printing the money, had also been quietly printing his own paper notes. He used the extra notes to slowly buy up land and other valuable commodities, increasing his wealth as the people's purchasing power diminished. He also used the notes to bribe the King’s courtiers and the wealthy merchants of the land, ensuring their silence and loyalty.
As prices rose, the Wizard printed even more money, using it to buy the goods and property at lower cost before the notes had time to impact prices even more. He would ensure enough of the notes were passed to the courtiers and merchants as well, and they, too, would buy up property and goods before the prices rose for everyone else. It wasn’t long until the Wizard was the wealthiest person in the kingdom, the fortune he amassed even outgrowing that of the King, who spent much of his fortune in fighting the war.
A few savvy people began to realize what the Wizard was up to and consulted with each other, trying to figure out what to do. They formed an informal group and began sharing their ideas, forming plans and strategies to try and put an end to the Wizard’s scheme and restore prosperity to the people.
While exploring a cave in a nearby mountain, one of the group’s members discovered an ore that he’d never seen before. It was a beautiful orange hue and incredibly hard. He returned home and got some tools to extract some of the ore with. He presented it to the rest of the group and suggested they should begin making their own coins from the ore, using it for money instead of the notes. The group agreed and some of them also began to mine the ore.
An interesting thing about this orange ore was that the more that was mined, the harder it became to extract it from the cave. It also became clear that the cave had only a finite amount of ore, so the amount of coins they could mint from it would be limited to a fixed number. The group realized this was a good thing, because it meant nobody else could create more money like the Wizard had, disguising his theft by inflating away the value of the money for his own benefit and that of those close to him.
The group also began to spread information, educating the people on the impact of the increasing money supply and the pitfalls of using the paper notes. Not many people paid attention at first, but as the paper notes got more and more worthless, more people began to listen. Soon the small group of orange coiners grew larger, all of them working to educate others and help them realize what the evil Wizard was up to.
The Wizard was not pleased when he heard about the group of rebellious orange coiners. He knew that the coiners were on to his scheme and the truth of what he was doing was being spread throughout the kingdom. The Wizard had to do something to stop the coiners, or else his fortune would soon be lost and the people would never trust him again. In an attempt to save his position, the Wizard came up with an ingenious plan. He made a proclamation that the orange coins were both worthless and dangerous and that only criminals were using them. He spread this news far and wide, hoping it would be enough to dissuade the people from using the coins and listening to the coiners.
For a time, the Wizard’s plan worked. People believed his proclamation and refused to listen to the coiners, instead sticking with the paper notes. But as the paper notes continued to lose their value due to the increasing money supply, people began to doubt the Wizard's words. They realized that the orange coins were not dangerous but, rather, were actually incredibly valuable. The paper notes were becoming more and more worthless, but the orange coins were gaining value quickly. This gave them hope for the future, something the paper notes had taken away. The coiners were pleased that the truth about the orange coins was finally spreading and more people were starting to listen to them. They continued to mine the ore and mint coins, educating the people and helping them understand the Wizard’s scheme.
Seeing that his plan was failing, the Wizard decided to create confusion by minting his own new coins without the people knowing. These new coins were made from wood with a thin layer of silver over them to make it appear valuable. The Wizard imprinted a picture of a large sailing vessel onto each coin for flare and to give the impression of strength. He bribed his merchants to start accepting and trading these coins, promising them more paper notes for each one they circulated to the people. With so many merchants using the coins, they began to catch on. Because of the imprinted image people began to refer to the coins as “shipcoins”.
Now there were paper notes, orange coins and shipcoins circulating and being used as money. The Wizard’s plan appeared to be working, as the shipcoins had many people confused. They were beautiful in appearance and many influential people of the land were praising their value. Meanwhile the Wizard kept printing more and more of the shipcoins, diluting their value in the same way he was diluting the value of the paper notes. The orange coiners tried to tell people the truth, and a few listened, but many did not.
Eventually the ponzi scheme was up. The Wizard paid off the merchants and courtiers as promised, and they all unloaded what was left of their shipcoins on the unsuspecting people who thought they would continue to rise in value. Seeing that all of the influential people had sold their shipcoins, the people began to panic and try to sell them as well, but there was no one who wanted to buy them and they were left holding the bag.
Meanwhile the orange coins, being scarce and difficult to produce, continued to grow in value as more paper money was printed. The Wizard cursed his inability to do away with the orange coiners and their money. With the collapse of the shipcoins and the paper money getting even more worthless, large numbers of people began to listen to the orange coiners and to acquire as many of the coins as they could afford. The honest merchants, seeing their profits disappear as costs rose from the inflation of the paper money, began to accept the orange coins as payment for goods and services. Workers began to demand the orange coins in payment of their wages, refusing to trade their time and energy for the now almost worthless paper money.
The final collapse of the paper money began when the kingdom was unable to pay off its war debts with paper notes. The notes were now almost worthless and so creditors demanded payment in orange coins. This was impossible as the kingdom had none of the coins. The King, realizing his mistake with the paper money scheme, declared that all debtors and creditors would be paid in the orange coins, and he sent teams of soldiers to begin mining the orange ore. By now the ore was incredibly difficult to extract from the cave, and few new coins could be minted. The value of the orange coins skyrocketed against the paper money.
The news of the abandonment of the paper money spread quickly throughout the kingdom and caused widespread panic. People were anxious to get rid of the notes before they were rendered totally worthless and began exchanging their notes for anything that retained value, such as goods and services. Unfortunately, since most people now preferred to be paid in orange coins instead of paper notes, the prices of goods and services also skyrocketed as people tried to make up for what they were losing with the worthless notes.
With the total collapse of the paper money, many people found themselves destitute. Those who had saved their money in paper notes were left bankrupt. The destruction caused by the collapse of the paper notes was far-reaching. With prices now rising faster than people could earn their wages, basic necessities such as food, clothing, and shelter became unaffordable. This led to widespread hunger and poverty, with countless people unable to make ends meet. Numerous businesses had to close down and lose their investments, resulting in large-scale unemployment. The wealthy courtiers and merchants who had previously accepted bribes from the Wizard were now stuck with paper notes that were worth less than the paper they were printed on, and lost the wealth and influence they had built.
After the collapse of the paper money, the kingdom went through a dark period of poverty and unrest. Resources were scarce and prices were high, causing many people to suffer. But as the orange coins continued to spread, people began to regain hope. The orange coins were difficult to produce and scarce. This meant that the coins were valuable, and people traded them for goods and services instead of the worthless paper notes. More and more people sought out these coins to restore prosperity and stability to the kingdom.
The orange coiners continued to mine the ore and mint coins, slowly but surely increasing the number of coins in circulation until the very last of the ore was extracted from the cave. Merchants accepted the coins as payment for goods, and some even began to hoard them to save for the future. People with orange coins were able to purchase the essentials they needed, and the kingdom began to recover. The Wizard was tried and imprisoned for his fraud and for the havoc he wrought upon the people.
The King recognized the orange coiners’ contributions and decreed that they should be honored by creating monuments to commemorate their efforts. People donated some of the coins they had saved to help others and rebuild the kingdom. Over time, the kingdom grew more prosperous than ever before - and the people never forgot the lessons they had learned. The orange coins were invaluable in helping to restore the wealth and stability of the kingdom. People no longer feared falling into poverty, understanding that their savings were valuable and only grew in value over time as technology naturally caused prices to fall as production grew more efficient.
The people didn’t live happily ever after. There were still problems and differences that caused social unrest. There was still corruption and greed and people eager to use power for their own selfish gain, but all of that was tempered by the money supply being out of the hands of the rulers and in the hands of the people. Nobody could take that away from them ever again, and with their personal sovereignty restored and their knowledge increased, the people were far less likely to fall for the scams that had been perpetrated on them in the past. They were happier, and life was more prosperous and peaceful.
The End? No, it was only the Beginning…