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Toasting the Old Money at Versailles

The 0.01% meets 100 years after WW1 Treaty...

ONE of the advantages of having some money is that you get to observe others who have it, writes Bill Bonner in his Diary of a Rogue Economist.

Up close, without being arrested.

You see the rich in their native habitat. You learn their lingo. You observe their customs.

It was in that spirit of anthropological curiosity that we joined a group of some 300 wealthy Americans at the Palace of Versailles in Paris last Friday night.

What a place! Over the top. Spectacular.

Our visit began with a noble entry into the palace. Military standards unfurled on either side of us...held by staunch veterans of Dien Bien Phu and Algiers.

Then, we crossed a red carpet to arrive in the Halle d'Entrée, where on the wall was the large plaque commemorating the generosity of the Rockefeller family.

Thereafter, our group – men in tuxedos, wilting in the 90-degree heat, their faces red, with beads of perspiration on their foreheads...women in their gowns, some with advanced cases of décolletage – was escorted on a private tour of the great rooms.

We passed through rooms used by Louis XIV and his entourage...the boudoir of Marie Thérèse...Louis' own bedroom and antechamber...the famous Hall of Mirrors...and finally, the Hall of Battles.

There, amidst huge paintings of death and Austerlitz, Bouvines, and Fontenoy...we dined in a peaceful splendor usually reserved for heads of state.

Of course, the palace is magnificent. But we will return to it in a minute.

The people we were with were undoubtedly on the roster of America's 1%...perhaps even the 0.01%. But this was the antiqua pecunia wing of the moneyed set, not the Donald J.Trump wing.

By their women shall ye know them. At a gathering of the Trumpian men, their wives – like their suits and their automobiles – tend to be foreign, sleek, and new.

These women were different. More like Barbara Bush than Melania Trump, some were elegant, even stunningly beautiful. But they were not new.

For this set, life is about holding on to what you've got. This wing of the .01% has money so old that most have forgotten how it was made.

David Rockefeller Jr. – who was honored with a special award on Friday – showed no signs of oil stains on his tuxedo. Nor did the others smell of the slaughterhouses, coal mines, or retail outlets where their fathers and grandfathers had sweated out their fortunes.

These were not people who knew how to make money. They knew something just as valuable – how to get rid of it.

Many collected art and antiques. They endowed museums. One of the men at our table had created not one, but two, new museums – one in Miami, the other in San Francisco.

They were also very worldly people, with apartments in Washington, but also in Paris or Venice. And they supported good works all over the world.

One of those good works was the building in which we dined. When World War II concluded, the Rockefellers wrote a letter to ask the French if perhaps they would like a little help restoring the place where the Treaty of Versailles had been signed. Yes, they answered politely, they would be delighted.

And so, the Americans, well stocked with Dollars but short on grandiose culture of their own, rolled up their sleeves, got to work, and helped to make Versailles what it is today.

"Oh...but that was a different era," said a companion. "You don't see that can-do, open, optimistic attitude any more. Now, Americans want to build walls..."

She gave a knowing nod as she pronounced these words, almost a wink; there was not a MAGA cap in sight.

The woman wore a diamond fleur-de-lys brooch. She was concentration-camp thin...and looked as though she might be on the board of the Guggenheim.

These were heirs not just to the fortunes of America's great economic triumph, but to its attitudes and ideas as well.

They believed in learning foreign languages, participating in the world of high culture, and lifting up its low federales with the example of America's democracy, its Constitution, its universal values, and its market-set prices.

The occasion was the 100th anniversary of the signing of the Treaty of Versailles, which took place in the Hall of Mirrors on June 28, 1919. The signing of the treaty marked the end of the first World War.

The anniversary was generally ignored by the public. But here, a few speakers gamely tried to make it sound like a great achievement.

"We just want to say," said a French voice, one of several after-dinner speakers, "that we are grateful to you Americans...You sent 2 million soldiers to help us end that dreadful war and protect democracy. And then, you helped us restore this remarkable, lovely place. Thank you."

It was a nice evening. No one wanted to spoil it with the truth.

Versailles is monumental, but it is not lovely. Almost ugly, it is a peacock display of power, not taste. And it impoverished the French, isolated the aristocracy, galled the commoners, and incited the French Revolution.

The mobs and the guillotine caused the rich to flee to Germany and England, where they set about conspiring with the locals to invade their homeland to retake their properties and power.

And it was the threat of foreign invasion that led, as autumn to winter, to the Napoleonic Wars...leaving France broken, bloodied, and occupied by British and Prussian troops.

Nor did anyone want to chip the crystal mood by recalling that the Great War was a disastrous affair for all the participants...and that when US President Woodrow Wilson sent US troops, he made probably the single biggest blunder of American history...prolonging the war by two years and adding millions in casualties.

The treaty that ended the war was as blockheaded as the war itself. Rather than simply ratify the armistice and let people get on with their lives, the French and British insisted on revenge. Wilson, meanwhile, wanted the glory of being Salvator Mundi.

And the American banks, who had lent millions to keep the war going, wanted to be repaid. The solution they came up with was huge war reparations imposed on Germany, which had catastrophic consequences for everyone. The money flowing into the US caused the Roaring Twenties...which led to the Crash of 1929...which led to the Great Depression.

In Europe, the Germans – on the brink of starvation – sent their gold to Paris and London...and thence to New York, leaving them with nothing but fake money – stimulus! – at home.

This led to the Weimar the rise of Hitler...and to more fireworks.

Other than was a fine event, enjoyed by all.

New York Times best-selling finance author Bill Bonner founded The Agora, a worldwide community for private researchers and publishers, in 1979. Financial analysts within the group exposed and predicted some of the world's biggest shifts since, starting with the fall of the Soviet Union back in the late 1980s, to the collapse of the Dot Com (2000) and then mortgage finance (2008) bubbles, and the election of President Trump (2016). Sharing his personal thoughts and opinions each day from 1999 in the globally successful Daily Reckoning and then his Diary of a Rogue Economist, Bonner now makes his views and ideas available alongside analysis from a small hand-picked team of specialists through Bonner Private Research.

See full archive of Bill Bonner articles

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