Kubilai Khan's Great Fleet and the Economics of Reality

My father is a collector of stamps and his been doing this since he was seven years old. This means that I have an eye for stamps whether I like it or not. On my last trip to Mongolia I found a rather intriguing stamp picturing the great Kubilai Khan and his enormous fleet that were sent to conquer Japan in 1281. Unfortunately, Kubilai forced his hand and gave an order to complete the fleet in just one year, instead of five which should have been necessary. This resulted in a fleet of few really seagoing vessels, but in fact converted river boats lacking an essential trait of a seagoing vessel: the keel.

This was combined with Kubilai's adoption of the finer qualities of financing in that time China; printing paper money. Unfortunately the printed paper money was not secured in any form of precious metals or the like. As the fleet sank in the Japanese sea, those possessing paper money printed to finance the building of the fleet reconned that the value of the money was reflected in the value of the fleet, all of a sudden reciding on the bottom of the sea. This led to the first known hyperinflation.

So what can Kubilai teach us from his mistake more than 700 years ago? Don't laugh, as we are in exactly the same position, as our money are not secured in any precious metals or the like. Sadly enough it reflected in our ability to keep economic growth sustainable; something that at the present seems unlikely in the long run. But as John Maynard Keynes so wisely said: "- In the long run we're all dead!"