History is littered with the wrecks of paper money adventures. In hundreds of cases, in all lands, at all times, the story has been the same: loss of confidence in and eroding value of fiat currencies. Paper money does not work; the temptation of the printing press is too great. Emperors, kings, presidents, prime ministers and central bankers have not been able to resist the temptation: When faced with economic problems or overspending, they have all chosen to create the money needed to pay bills or fight wars.

The world’s first known experiment with fiat money (paper money not backed by tangible assets like silver or gold) was in 10th-century China. At first successful, it was abandoned a few hundred years later because it, like all the paper currencies that followed, was found to be too susceptible to inflation. But, to the Chinese’s credit, a few hundred years is actually pretty successful as far as paper money goes.

By 1200, the Chinese had forgotten this earlier failure and launched another paper money scheme, this time under Kublai Khan. Marco Polo was so impressed, he reported that Kublai Khan “had the secret of alchemy in perfection” and that he “causes each year to be made such a vast quantity of money that it must equal in quantity all the treasure of the world.” But Marco Polo visited Kahn’s empire during a time that American historian Alexander Del Mar called “the most brilliant period in the history of China”—which, it turns out, was just before its collapse. “Kublai Khan entered upon a series of internal improvements and civil reforms, which raised the country he had conquered to the highest rank of civilization, power and progress. … Population and trade had greatly increased, but the emissions of paper notes outran both, and the inevitable consequence was depreciation. … Excessive and too rapid augmentation of the currency resulted in the entire subversion of the old order of society. The best families in the empire were ruined” (Bullion Vault, October 27; emphasis ours).

Fiat currency adventures in Europe also have a history of painful failures. For hundreds of years, the Roman Empire reigned, increasing in power and influence. Even when Nero decided to start debasing the currency by taking the silver out of the coins, Rome prospered for a while. However, as Rome decayed, successive emperors continued to remove the silver content of the denarius to pay the bills. At the beginning of the first century, the denarius was essentially pure silver. By the time of Nero, in a.d. 54, the silver content of the denarius had slipped to 94 percent; by a.d. 68, it had fallen to 81 percent; by a.d. 218, only 43 percent was silver. Philip in a.d. 244 had the silver content reduced to 0.5 percent. At the time of Rome’s fall, silver content of the denarius was 0.02 percent and pretty much everyone was refusing to accept it as payment for anything (LewRockwell.com, November 4).

But central banks and governments are poor students of history.

During the 1700s, France stands out as a paper-currency basket case. John Law first established a paper currency in France in 1716. Backed by King Louis xv, who declared all taxes had to be paid with paper dollars, it gained wide acceptance—more so than coinage, in fact. But as with all paper currencies, excessive printing, additional moneymaking schemes (the Mississippi bubble), and fraud eventually blew up the system, wiping out many people’s investments and savings.

During the late 18th century, a new French government again adopted fiat currency, which was called the “assignats.” But again, money-creating destroyed it: By 1795 inflation had reached 13,000 percent. Napoleon replaced the assignat with the gold franc, inflation subsided, and a century of relative economic stability resulted. In the 1930s, the French again adopted a paper franc. In 12 years, its currency lost 99 percent of its value.

Weimar Germany is another example of a failed currency. At the end of World War i, Germany decided to print the money needed to pay the debts it owed foreign nations. By the time the government was done printing money, the currency had been so debased that postage stamps cost millions of Deutsche marks.

In 1932, before adopting a paper currency, Argentina was the eighth-largest economy in the world. Since abolishing their precious metal-backed currency, Argentineans have been plagued with continual currency inflation—even hyperinflation reminiscent of Weimar Germany. The latest bout was in 2001, when the peso lost 75 percent of its value in one year.

Each couple of years it seems like another nation’s fiat currency falls apart. In 1992, Finland, Italy, Norway and other European countries suffered when their currencies devalued. In 1994, it was the Mexican peso “tequila hangover” crisis, which spread through several Latin American nations, including Brazil, Venezuela and Argentina. 1997 was the year of the “Asian flu” contagion, which started with the Thai baht and then within days spread to Malaysia, the Philippines, Indonesia, Hong Kong and South Korea. The currency collapses associated with “bahtulism” were still destabilizing currencies in 1999. 1998 saw the Russian ruble fall apart and experience massive devaluations. February 2001, the Turkish lira lost 40 percent of its value in one day.

To attempt to chronicle the massive currency devaluations that are endemic to many African nations would require stacks of paper, but Zimbabwe is too clear cut of an example to pass up. Formerly known as Rhodesia, Zimbabwe was one of the wealthiest countries in Africa. In fact, at the time of its independence in 1980, the Zimbabwe dollar was worth more than the U.S. dollar. Then along came President Robert Mugabe, who decided to seize virtually all property owned by white people to give to black people. The upheaval within society caused an economic collapse. With a non-functioning economy and falling tax revenues, Mugabe decided to just print up the money needed to pay the bills, destroying Zimbabwe’s currency and any of his people’s savings in the process. As of May 2006, it cost $416 Zimbabwe dollars to purchase a single two-ply square of toilet paper, while a whole roll cost $145,750.

Why should we think America is somehow special and immune to currency crisis? In fact, go back and study history: In addition to the fact that the U.S. dollar has lost 92 percent of its purchasing power since 1913, and 41 percent in the 1934 revaluation, there have been times when the dollar lost even more value. Maybe you have heard the expression “not worth a Continental.” That expression developed in regards to America’s paper money during the Revolutionary War era (not Ford’s Lincoln Continental luxury vehicle). The U.S. government again tried a paper currency experiment during the Civil War. The Legal Tender Act of 1862 allowed the Lincoln administration to issue paper money, backed by nothing but the government’s decree that it be accepted for trade. The paper money lost value so quickly that the practice of fiat currency in America fell out of favor until the Federal Reserve System was put in place in 1913. Paper money in the South by the end of the Civil War was worth even less.

The sad part is that when governments resort to mass currency creation, it is the common person’s savings that get destroyed. The interest earned in savings accounts never keeps up with mass-printing induced inflation.

For the U.S. dollar, its final link to a hard, tangible asset was severed 35 years ago. Today, the majority of dollars are little more than bits of electronic information zooming between banks and corporations that people don’t even see, and that they need computers with super calculators to keep track of. How much confidence is left in the inflated U.S. dollar—a dollar whose value remains high not for any tangible reason, but only because so far America’s trade partners are still willing to accept it?

In Weimar Germany, when the mark was inflated into practical worthlessness, at least the German people were left with tinder. When the dollar collapses and no one wants it, most of it will probably just be deleted.