In 1772, Saxony decided to try out the dangerous new invention of paper money to cope with its debts. Tempting though it might have been to let the printing presses run wild, Elector Frederick Augustus III opted instead to apply a “measured issuance policy.” As a result, his “Cassenbillets” became a popular means of payment for over a century.
That message of monetary moderation can be found — perhaps unsurprisingly — at the Bundesbank, where the nation’s longtime currency guardian opened its revamped Money Museum on Friday. The exhibition, aimed mostly at schoolchildren, underwent a six-year renovation at a cost of 19 million euros ($20 million).
In the very first room, visitors are told that cash in the euro area “is legal tender and must be accepted as payment for goods and in settlement of debts” — a reassurance for anyone wary of money they can’t touch.
Attendees can also try to spot counterfeit money and touch a gold bar. In a warning of the impact of inflation on the real economy, a mock supermarket displays a shelf of gradually emptying jars showing how 100 euros today would buy progressively less over the years at different rates of consumer-price growth.
That’s reminiscent of the arguments German members of the European Central Bank’s Governing Council have had over the years as monetary policy was eased amid a double-dip recession and the risk of deflation. Still, compared with the museum’s previous incarnation from 1999 to 2010, that relatively hawkish attitude is less on display.
Gone is the game that asked visitors to take the seat of central bankers and keep inflation in check. Even serving officials at the time couldn’t avoid running into hyperinflation.
In its place, visitors are called upon to steer a wheel to keep a rolling euro coin from tipping over. Deflation gets its own display panel. And of course the euro, which replaced the Deutsche Mark in 2002, is the real star of the exhibition.
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