 Pittsburg, Kansas | If you want something long to read (takes a few hours) about gold, silver, bimetalism, American financial Imperialism and how governments use monetary policy to control and implement imperialism and use the debasement of money to impoverish citizens both domestic and foreign, then this Zero Hedge article written by Murray Rothbard is just the ticket. The interest to marketing is it brings about the methods banking interests use money and the devaluation of money to create financial opportunities for the privelaged who know how the system works. By understanding how the system works we ourselves can better protect ourselves from the system designed to control us. It covers a time period from the mid 1800's to present. It is not the usual story of the Fed's creation. It has much more background history with references and explains the difference (and why it matters) between a true gold standard, a gold exchange standard, bi-metalism, -etc. It is interesting if you are interested in this type of stuff. If not, don't click on the link as it will be boring. what-came-first-federal-reserve-or-economic-bubbles-brief-history-federal-reserves-creation John Edit: I will cut and paste a section just to give you a "flavor" of the article so you can see if it is of interest to you. In addition, adopting a government-managed gold-exchange standard was superior to either genuine gold or bimetallism because it left each state the flexibility of adapting its currency to local needs. As Conant asserted, It leaves each state free to choose the means of exchange which conform best to its local conditions. Rich nations are free to choose gold, nations less rich silver, and those whose financial methods are most advanced are free to choose paper.
It is interesting that for Conant, paper was the most "advanced" form of money. It is clear that the devotion to the gold standard of Conant and of his colleagues was only to a debased and inflationary standard controlled and manipulated by the US government, with gold really serving as a facade of allegedly hard money. And one of the critical forms of government manipulation and control in Conant's proposed system was the existence and active functioning of a central bank. As a founder of the "science" of financial advising to governments, Conant, followed by his colleagues and disciples, not only pushed a gold-exchange standard wherever he could do so, but also a central bank to manage and control that standard. As Emily Rosenberg points out, Conant thus did not neglect … one of the major revolutionary changes implicit in his system: a new, important role for a central bank as a currency stabilizer. Conant strongly supported the American banking reform that culminated in the Federal Reserve System … and American financial advisers who followed Conant would spread central banking systems, along with gold-standard currency reforms, to the countries they advised. (Rosenberg 1985, p. 198)
Along with a managed gold-exchange standard would come, as replacement for the old free-trade, unmanaged, gold-coin standard, a world of imperial currency blocs, which "would necessarily come into being as lesser countries deposited their gold stabilization funds in the banking systems of more advanced countries" (ibid.). New York and London banks, in particular, shaped up as the major reserve fundholders in the developing new world monetary order. It is no accident that the United States' major financial and imperial rival, Great Britain, which was pioneering in imposing gold-exchange standards in its own colonial area at this time, built upon this experience to impose a gold-exchange standard, marked by all European currencies pyramiding on top of British inflation, during the 1920s. That disastrous inflationary experiment led straight to the worldwide banking crash and the general shift to fiat paper moneys in the early 1930s. After World War II, the United States took up the torch of a world gold-exchange standard at Bretton Woods, with the dollar replacing the pound sterling in a worldwide inflationary system that lasted approximately 25 years. Nor should it be thought that Charles A. Conant was the purely disinterested scientist he claimed to be. His currency reforms directly benefitted his investment banker employers. Thus, Conant was treasurer, from 1902 to 1906, of the Morgan-run Morton Trust Company of New York, and it was surely no coincidence that Morton Trust was the bank that held the reserve funds for the governments of the Philippines, Panama, and the Dominican Republic, after their respective currency reforms. In the Nicaragua negotiations, Conant was employed by the investment bank of Brown Brothers, and in pressuring other countries he was working for Speyer and Company and other investment bankers.
Edited by John Burns 3/24/2013 11:54
|