The Assignat

WHEN THE STATE TAKES OVER THE ECONOMY

History is full of warnings—if you dare to look. France at the end of the 18th century is one such warning: a nation that ruined its money, trust, and economy in the name of freedom and progress. It began with the promise of a new kind of wealth. It ended in inflation, censorship, repression, and total currency devaluation.

The assignats — the revolutionary paper money of the French Republic — are a textbook example of how monetary abuse and political power-hunger inevitably lead to financial decline. Anyone who looks with open eyes at the policies of central banks and governments around the world today will see the same mechanisms returning.

The French Revolution began with ideals of liberty and equality,  but once the monetary system was disconnected from real value, inflation, mistrust, and ultimately chaos ensued. The parallels with modern fiat money are striking: governments print unlimited amounts of money, justify this as an “emergency measure,” and ignore the consequences until confidence collapses completely.

This article shows step by step how France destroyed its currency — and what strategies worked at the time to protect your wealth. The lesson is clear: never trust paper or digital fiat money, but only and always tangible assets.

WHAT WERE THE ASSIGNATS?

After the outbreak of the French Revolution in 1789, the new revolutionary government faced a problem:  a sky-high national debt, a broken tax system, and a population in revolt. Their solution? A “clever” financial trick: the issuance of assignats, officially debt securities backed by the value of confiscated church property (real estate). This was and still is easy prey because you cannot hide or move real estate.

In theory, these papers would be stable in value because they were linked to real estate. In reality, they were the beginning of unbacked paper money creation—exactly what we know today as fiat money.

Within a few years, assignats were reduced from covered bonds to pure paper money without interest, printed in ever-increasing quantities. It became, so to speak, “money of the people” – but it was the downfall of those same people.

THE MONETARY INFLATION HELL (1790–1796)

Initially, the plan seemed to work: the first batch of assignats was well received, and the economy breathed a sigh of relief. But as is always the case with governments, as long as the printing press is running, it will not be stopped.

What happened?

• 1790: First issue of 400 million assignats (backed).
• 1791–1793: Reprinting increases to the billions, backing is diluted.
• 1793–1795: Hyperinflation explodes, purchasing power evaporates.
• 1796: Assignats are abolished. Their value = zero.

The consequences were devastating. Prices skyrocketed. Bread became unaffordable. Savings became worthless. Traders refused to accept paper money and returned to barter or precious metals.
Farmers receive worthless paper money

The French population saw their savings evaporate, while wages and prices were no longer in proportion.  Markets dried up and traders refused to accept paper money. What was once intended as “the people's money” became an instrument of oppression: farmers and workers were given worthless banknotes, while food and raw materials disappeared in a spiral of mistrust and shortages.

The government responded not by acknowledging its mistakes, but by punishing the people.  Anyone who criticized the monetary system was labeled an “enemy of the revolution.” Speculation became a crime, and owners of gold or silver were persecuted. The paper kept flowing, but the economy ground to a halt — a lesson that the world seems to be forgetting again today.

REPRESSION & FEAR — WHEN THE STATE PANICS

As is often the case in history — and today — the state tries to correct not itself, but the people.  Instead of revising its own monetary policy, the French government criminalized economic logic. It imposed price controls on food, punished “speculation” with death, banned criticism of the monetary system, and confiscated goods as soon as they were traded for gold or silver.

The result? Markets dried up, goods disappeared, fear reigned.  The economy collapsed completely.

WHAT DID WORK? AND HOW CITIZENS PROTECTED THEMSELVES

While the masses became impoverished, the more forward-thinking minds managed to save their wealth. How? By withdrawing from the paper system.

These assets retained their value (or even increased):

• Gold & silver: Still universally accepted as real money.
• Land and agricultural products: Tangible, productive assets.
• Foreign money or goods: For those who could emigrate or smuggle them.
• Barter: Handicrafts, services, and food became currency again.

The losers were those who trusted the state, left their savings in assignats, or believed in the promises of a “just revolution.”

THE REAL PROBLEM: LOSS OF CONFIDENCE

In any fiat money system, confidence is the only thing that really matters.  Once the population realizes that the paper in their hands is only a promise—and that that promise is untenable—the whole system collapses.

France learned this in 1796. Today, the world is flirting with exactly the same scenario: Central banks are printing billions and even trillions without any underlying value. Interest rates are being kept artificially low to create a facade of stability, while government bonds have become forced investments for pension funds and banks. Physical assets are systematically demonized or heavily taxed, as if they pose a threat to the system itself. And gold and silver — the only assets outside that system — are ignored, manipulated, or openly mocked.

Just as in 1796, attempts are being made to create prosperity out of paper, and once again, history will prove that this is impossible.

THE PARALLELS WITH TODAY

History repeats itself — only the packaging changes.  During the French Revolution, assignats were issued as paper debt, “backed” by confiscated property. Today, the same thing is being done, but with fiat money that is literally created out of thin air. Whereas confiscations served as collateral back then, now promises, emergency funds, and central banks that endlessly expand their balance sheets under the guise of “stimulus” and “quantitative easing” suffice.

<- Assignat of 400 livres — symbol of the paper money illusion/dillusion.

The consequences are identical:  price distortions, repression, and growing mistrust. In the 1790s, price controls and sanctions were used to hide the consequences of currency devaluation. Today, we see the same pattern: manipulated inflation figures, tax increases, and fiscal illusions to mask the erosion of purchasing power.

Anyone who criticized the system was labeled an enemy of the state.  During the French Revolution, a critical word about the monetary system was enough to be denounced as an “enemy of the people.” Those who dared to speak the truth—that paper has no real value—were punished with fines, censorship, or worse. Today, the same thing is happening, albeit with more modern means: no guillotine, but digital persecution and social exclusion.

The mechanisms differ, but the essence remains the same: whenever a society disconnects its money from real value, a cycle of deception, repression, and ultimately devaluation begins.

STRATEGIC ADVICE — THE OLD TRUTH REMAINS VALID

Anyone who wants to protect their assets today would do well to learn from the past:

1. Do not trust paper or digital “money.” Neither assignats, nor euros, nor dollars.
2. Own physical gold and silver. Not at a bank, but "out of political reach".
3. Invest in tangible, productive assets.  For example, agricultural land or energy "out of political reach".
4. Look for Plan B options outside Europe and your home continent. Jurisdictions with less state coercion.
5. Don't be swayed by fearmongering or ‘the common good’. Freedom and property "out of political reach" are the best protection.

CONCLUSION – HISTORY REPEATS ITSELF

The Assignats were no exception.  They are a pattern. Every time a state tries to create money out of thin air, it ends in loss, chaos, and repression. If you understand this and respond appropriately, you don't have to be a victim.

Today's central banks are as reckless as the revolutionaries of 1790. But those who had gold back then survived.  Those who have gold & silver and the right strategy now will win again. [Note you can't move agricultural land "out of political reach"]

Gold never lies. Politicians always do.