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Understanding the EVOLUTION of ‘money’…from our history!

July 13, 2012

Let’s assume that we are starting a NEW ‘monetary unit’ for our Society…how would we do this?

I would suggest that we can understand ‘money’ by  going back to our founders (Jefferson and Hamilton) and then we can internalize what they thought and did. Let’s go step by step through this process.

1. During our Revolutionary War period (1775-1783) the ‘money’ in circulation consisted of various types of metal coins and also paper script. The predominate paper units in circulation were called the Continental certificates. These paper certificates (or notes) were created by our Continental Congress to serve as legal tender for Colonial financial transactions within the general marketplace. The paper notes were ‘presumed’ to be backed by real silver or gold (such as the Spanish silver coin which practically everyone viewed as an acceptable medium of exchange and store of value). The key word is ‘presumed’. In reality, these paper notes could not be exchanged for real silver (or gold) as our Continental Treasury did not have sufficient silver/gold coins to honor any major exchanges (paper notes for physical metal). All transactions in the marketplace were basically based on ‘presumption’ and ‘imagination’ (trust in the Authorities words written on the paper note). See this sample image for understanding.

2. After this experience with paper money and the official rejection by our Treasury to exchange notes for physical silver or gold, our founding Fathers of money (Jefferson and Hamilton) concluded that unbacked paper notes should not be issued as official money for our NEW nation. History reveals that it was Thomas Jefferson who was adamant that our official monetary unit be some ‘thing’ which the people could trust and which the people also viewed as containing real ‘value’. Keep in mind that ‘measurment of value’ is the core role and purpose for any money system. So what did they think up for our official monetary unit?
What Jefferson and others (who understood the history of money) chose for our monetary unit was the word…’dollar’. But what is a ‘name’ without some substance backing the ‘name’. To give the ‘name’ (dollar) some meaning and ‘value’, Jefferson DEFINED this ‘name or word’ in terms of real physical silver. He chose the Spanish silver coin as the reference coin (after an assay this Spanish coin was found to contain 371.25 grains of pure silver). Jefferson then defined the new American silver coin (our dollar) as 371.25 grains of pure silver. See this image of our monetary unit as defined by our Congress in 1792. See also the Coinage Act of 1792 for more detail.
3.  Our monetary unit was thus officially established as a ‘thing’ containing ‘value’ (in the mind of Jefferson as well as the people in the marketplace). Notice that the ‘name’ chosen for the metal coin was the word ‘dollar’. Also, notice that Jefferson did not choose a ‘name’ without defining this ‘name’ in terms of something ‘material’. Money, historically, has always been some ‘thing’ (a material object) which people could observe and hold in their hand. Never in all of monetary history (until today) has a monetary unit been ‘no thing’ or ‘nothing’ (merely a name or symbol of one’s mind). Today, we use monetary symbols (units of consciousness) as our money units. We then type these units (digital or virtual numbers) into our computer screen and call these units ‘money’. This is now done exclusively by select policymakers within our Central Bank, called the FED.
Furthermore, these money units ($) are really created from the ‘thinking’ or the ‘consciousness’ of mostly one unelected official (and his group think committee) mostly to manipulate the ‘price’ structure of goods and services within our national marketplace. Ron Paul, Congressman from Texas, calls this creating money ‘out of thin air’. I would suggest that this is really a form of official counterfeiting as NEW virtual units are often created with no actual physical wealth representing these new units (think QE1 and QE2 to the tune of 2 plus trillion). Where did these money units come from…other than the MIND of Ben Bernanke (and his select FOMC  members)? Symbols and numbers (derived from the consciousness of Ben and Company) are now mostly our money units. Is any of this ‘constitutional’? Do mental (non-material) symbols qualify as ‘legal tender’ according to our laws?
4. So let’s review the evolution of money. We start with an ‘idea’ (money is invented) and then we choose a ‘name’ for our monetary unit. Then we choose some ‘thing’ (material object) to serve as a medium of exchange, store of value, and standard of value. Later in the time period we ‘drop’ the ‘thing’ (silver/gold) as legal tender and then ‘drop’ the paper note as legal tender. This was done after our then President, Richard Milhous Nixon, closed the gold window in 1971. We then adopt a virtual (digital) number as our monetary unit as the computer technology emerges (1980’s and 90’s). All this was done without any input from the American people or their elected representatives.
We then create new monetary units via the Master Fed Computer at the New York Federal Reserve Building (by typing in new digital numbers to increase the System Open Market Account). We then create billions and trillions of new digital (imaginary) money units (really official counterfeiting) and call this Fed Stimulus or Quantitative Easing (QE). We then allow an unelected banking policymaker (mostly the Fed Chairman) to manipulate and counterfeit our monetary unit (the dollar), including the bail-out of select huge banking institutions, to salvage the Casino Financial Capitalism which has evolved (1971-2012). All our elected representatives then clammer to approve all this manipulation to SAVE the corrupt system which has emerged.

5. As of 2012, we now experience a very corrupt financial system mostly controlled and manipulated by a few select banking officials and administrators. The American people seem totally unaware and uneducated on what has evolved. Today, we experience an ‘unconstitutional’ banking system which operates as the official source of our money and banking. Money units are ‘created out of nothing’ and then distributed to select entities which the political authorities deem TBTF or to entities which have financial/political clout. Is this American Capitalism as represented by our Laws and our Constitution? Is any of this representative of sound economic theory? Personally, I don’t think so!!!

6. The entire concept of centralized money creation is really a form of CENTRAL PLANNING (a non-American operation). Those who understand the history of money would be wise to accumulate some real physical items as their store of value for the next few years of economic collapse. What has evolved over these past 40 plus years is a Casino Economy with no basis in reality. Our money units are now mostly illusionary computer numbers (only 4% of our money in circulation are coins and paper notes). This type of illusionary money has NO VALUE and no relation to material (physical) reality. In reality, our money units today are derived from select banking officials consciousness (a non-material mental source). This operation is anti-American and anti-Capitalism. Why should an unelected bureaucrat have the power and authority to create trillions via official counterfeiting? Think!

Now is the time to get educated. The election season is emerging fast. Vote for freedom! Vote for a complete ‘audit’ of the Federal Reserve Bank! Get prepared for bank failures! Study and do your own research and thinking! Good luck!
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