'Credit crisis caused by fighting wars and short-term vision'

The problem originated in 1909 when the gold standard was abandoned. Two countries were responsible for this: France and Germany. They sensed that war with each other was in the offing, and so both Germany and France abandoned the gold standard by ceasing to pay their government officials in gold coins, and instead paying them with paper money.

-Right, whereby one is still under the impression that it's being backed by the government: 'It will turn out alright'.

Yes, 'It will turn out okay'. This paper money then went into circulation, and the gold was used as backing for the weapons industry, at which point an arms race started first between France and Germany, followed later on by all other Western countries.

from deep journal