Paper "Money," Mal-credit and the Plague

When googling money, google offered the HistoryWorld first, put up by very smart people, which had this to say:

Money, one of the earliest and most significant inventions of civilization, is essential to the development of trade. Without it there is only barter, a relationship between two people each of whom has something which the other wants.

What about credit?  Did that no precede both barter and money?  Perennially man returns to credit when money (properly defined) fails to meet demand:

During the Song Dynasty (960-1276) booming business in the region of Tchetchuan (Sichuan) likewise resulted in a shortage of copper money. Some merchants issued private drafts covered by a monetary reserve which initially consisted of coins and salt, later of gold and silver. Those notes are considered to be the first to circulate as legal tender. In 1024 the Authorities confer themselves the issuing monopoly and under Mongol governement, during the Yuan Dynasty (1279-1367), paper money becomes the only legal tender. During the Ming Dynasty (1368-1644) the issuing of notes is conferred to the Ministry of Finance.

So hegemon issued coins fail, merchants simply go back to benecredit, usury-free asset-backed credit.  That works,  So the hegemon steps in and makes it worse.  The hegemon issues monopoly paper money.

Now one overlooked aspect of silver and gold as money is it is anti-biotic.  Silver and gold both kill germs.  Since credit works locally, silver and gold money is not necessary there.  but in world trasde, where traders may never see each other again, the anti-biotic nature of the only thing that actually physically trades hands in int'l trade is the antibiotic money.  Bear that in mind.

Note that date above, Yuan dynasty, 1279-1367.  World trade was burgeoning, somewhat driven by Marco Polos accounts, being publicized about 1300.  Note this:

Marco Polo describes the way in which bank notes are produced in the 13th century for the Chinese emperor in what is now Beijing:
'They are made with as much authority and formality as if they were of pure gold or silver, for many officials who are deputed for this write their names on every note, placing there each one his mark, and and when it is all done as it ought to be, the head of them deputed by the lord stains the seal entrusted to him with cinnabar and impresses it upon the note so that the pattern of the seal dipped in the cinnabar remains printed there, and then that money is authorized. And if anyone were to counterfeit it he would be punished with the last penalty to the third generation. And different marks are printed on them according to their future value. And this money is made in the city of Beijing by those who are deputed for this by the king, and not by others. And each year he has so great quantity and supply of them made in the city of Beijing that he would pay with it for all the treasure of the world, though it costs him nothing.'

Quoted Bamber GascoigneThe Treasures and Dynasties of China, Cape 1973, page 162

Next... after Marco Polo, smack dab in the middle of the great world trade expansion facilitated by monopoly money malcredit, when paper replaces gold and silver, watch what also happens.

The Black Death erupted in the Gobi Desert in the late 1320s. No one really knows why. The plague bacillus was alive and active long before that; indeed Europe itself had suffered an epidemic in the 6th century. But the disease had lain relatively dormant in the succeeding centuries. We know that the climate of Earth began to cool in the 14th century, and perhaps this so-called little Ice Age had something to do with it.Whatever the reason, we know that the outbreak began there and spread outward. While it did go west, it spread in every direction, and the Asian nations suffered as cruelly as anywhere. In China, for example, the population dropped from around 125 million to 90 million over the course of the 14thc. [ http://history.boisestate.edu/westciv/plague/02.shtml]
[http://www.eyewitnesstohistory.com/plague.htm]
The plague moved along the caravan routes toward the West. By 1345 the plague was on the lower Volga River. By 1346 it was in the Caucasus and the Crimea. By 1347 it was in Constantinople.It hit Alexandria in the autumn of that year, and by spring 1348, a thousand people a day were dying there. In Cairo the count was seven times that.The disease travelled by ship as readily as by land—more readily—and it was no sooner in the eastern Mediterranean than it was in the western end as well. Already in 1347, the plague had hit Sicily. [http://history.boisestate.edu/westciv/plague/03.shtml][http://www.eyewitnesstohistory.com/plague.htm]
It reached Cyprus late in summer 1347. In Oct. 1347, a Genoese fleet landed at Messina, Sicily. By winter it was in Italy.
[http://www.eyewitnesstohistory.com/plague.htm]
January 1348, the plague was in Marseilles. It reached Paris in the spring 1348 and England in September 1348.Moving along the Rhine trade routes, the plague reached Germany in 1348, and the Low Countries the same year. 1348 was the worst of the plague years.It took longer to reach the periphery of Europe. Norway was hit in May 1349. The eastern European countries were not reached until 1350, and Russia not until 1351.Because the disease tended to follow trade routes, and to concentrate in cities, it followed a circuitous route: the Near East, the western Mediterranean, then into northern Europe and finally back into Russia. The progress of the plague very neatly describes the geography of medieval trade. [http://history.boisestate.edu/westciv/plague/04.shtml]

The spread of paper monetary instruments replacing silver and gold correlates with the spread of the bubonic plague.  So what?  The plague is spread by fleas, and as relatively coarse as paper may have been back then, it did not conceal fleas.

Yes, but the massive expansion of unnecessary trade occasioned by issuing malcredit instruments brought delights all along the trade routes, physically packed with voracious fleas as hosts for the virulent plague.  It is the scale of trade, in all of its misallocation and malinvestment, that offered the rapid expansion of opportunity for both the hegemon and the plague.

The argument of benecredit and 100% reserve is it checks boom and bust economy.  Perhaps it also checks plagues.

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