After the Revolution, France confiscated Church assets and issued government bonds to raise cash. Transformed into paper money without gold reserves, the uncontrolled printing of the assignats triggered an economic collapse.
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In the years following 1789, revolutionary France was plunged into a devastating financial crisis. To replenish the state coffers, the Constituent Assembly used the “usual” method: confiscating Church assets, especially real estate and land.
However, not being able to immediately sell the immense real estate assets, the State issued the grants (assignats): they were government bonds (a bit like Bots) that citizens could buy to later exchange for the lands confiscated from parishes, bishops and convents.
Creative finance
Soon, the financial engineering experiment got out of hand. In 1791 the allotments were transformed into fiat paper money (i.e. not convertible into gold or other reserves).
In fact, a virtual currency. The revolutionary assemblies, pressured by war expenses and debts, printed dizzying quantities of grants, well above the real value of the assets that should have guaranteed them. The result was a catastrophic domino effect: trust in the “piece of paper” collapsed, the prices of basic goods skyrocketed.
