Author:
teltalheart/moderator
|
[
Next Thread |
Previous Thread |
Next Message |
Previous Message
]
Date Posted: 19:13:00 05/03/02 Fri
Author Host/IP: tnt1-216-180-80-86.dialup.HiWAAY.net/216.180.80.86
Phony Money:
In ancient times barter was the way value was assigned and business was conducted. A pig farmer came to the local market and traded two piglets for three bushels of pears, if he did not bring his piglets with him he could write a note to the pear grower entitling him to come up to his farm and get two piglets.
The pear grower wants one of the new bronze axes that have just come in from the coastal region, what we now call the Steppes of Russia. He trades five bushels of pears and the "bearer note" from the pig farmer for one of the axes.
In this manner the bearer note can keep circulating as money. The pig farmer notices only 10% to 20% of his notes coming back for redemption at any one time. The pig farmer gets greedy and starts to put out more bearer notes then he can cover. As long as the notes can "float" throughout the market with no more then 25% ever comeing back for redemption at one time he's okay.
The pig farmer has saturated the market with his pig notes to the point where no one wants them anymore. He must now offer more piglets for the same amount of goods to make buyers feel it's worth their while. The more the piglet notes are circulated less and less valuable they become. The less valuable they become the more he has to issue to get what he wants. This is the downward spiral of inflation.
The more notes there are outstanding the more notes there are that will start coming in for redemption. Even though only 20% of the numerous notes that have been issued have come back for redemption, the farmer is overwhelmed and cannot pay and still keep him true wealth, his pigs. In order to protect his true wealth the farmer will have to devaluate his notes by saying they're worth less then the note states, perhaps three-quarters or only one-half. In doing this he risks of a run on his assets. At any rate he'll be, no doubt, unpopular in the market place. (Inflation is too many dollars chasing too few goods. The goods, being rarer, become worth more and the dollars become worth less). (Recession is too many goods chasing too few dollars. The dollars, being rarer, become worth more and the goods become worth less).
Faith in the farmer's pig notes will be destroyed. In order to trade in the market he'll have to go back to bartering or acquire someone else's notes in order to keep trading in the market.
Metals, since their discovery, have always been traded as currency. In early times they were mostly traded as weapons or jewelry. In later times as rare, valuable, virtually indestructible metals, such as gold. It used to be that silver was traded at one-sixth the rate of gold, in other words, one once of gold was worth six onces of silver.
The village goldsmith usually owned the strongest lockboxes. As such, people would deposit thier gold with him for safe keeping. The goldsmith would issue receipts to the depositors enabling them to come back and collect their gold at any time. Once again, the goldsmith noticed only 10% to 20% of the notes ever coming back at any one time. The goldsmith found he could lend out the unredeemed metal and charge interest on the loan. In time he found out he could convince borrowers to accept paper notes instead of metal coinage. Even if he did have to redeem all of his depositors notes with metal, those who had made loans would still owe the loan and its interest. In other words, owing on nothing.
The typical goldsmith would issue notes four to five times in excess of the actual amount of gold he had. The goldsmith was owed four to five times the gold he actually had to lend out. The public debt owed to him demanded an ever increasing share of the public wealth and resources. He becomes a parasite on the economy and ultimately on society. As long as people had faith in the gold notes and the goldsmiths,(bankers), did not extremely overextend the amount of notes produced they could stay ahead of the enevitable inflation they had created and make huge profits for themselves. This also had the effect of bestowing a great amount of unearned power and influence on them.
With paper notes issued out instead of gold, when an overabundance had been issued and inflation was inevitable, the paper notes could simply be devaluated, even in a gold standard market place.
MONEY FROM NOTHING:
With the process of printing paper money with nothing to back it up but faith, then slowly destroying the value of that paper money with inflation, one can stay ahead of the game and make enormous profits. This has the effect of dramatically increasing the difficulty of mankind's existance due to the debt factor caused by a parasitic system. The poor, who try to save their money, have it eaten away by inflation while the rich, who have their money in true assets and capital, a.k.a. realestate, grow ever increasingly wealthy.
The banking system can then be used as a tool to control the poor and to an extent, the middle class.
teltalheart...www.voy.com/40560/
[
Next Thread |
Previous Thread |
Next Message |
Previous Message
]
|
Feedback: 
Phony Money: 1