What's in a Name? Rarely the Whole Story

And so what was the point of that previous, long, drawn out post about the woman in Africa?  The point, very plainly, was to put money into perspective.  This thing we have elevated to primary importance clearly has the ability to affect major consequences.  But what is it exactly?  Where does money come from?  What gives it value and what does it actually represent in our society?

Do a little experiment.  Ask these questions at your bank.  If anyone should have some intellectual understanding of money, it should be the people staffing the banks, correct?  I have yet to meet a single person at a bank who could even tell me who printed our nation's money.  Each had an "Oh yeah!" moment when the Federal Reserve was mentioned.  But to me, it seemed an insufficient level of basic financial knowledge for someone who had such a broad understanding of what credit cards I would qualify for, how they would benefit me, and how to sell me on applying for one.  I admit this is a mildly asshole-ish thing to do, but I have always done it with a smile and a good natured tone.  I tell every one of them that I will sign up for their card if they can tell me what gives money its value.  I still have 0 credit cards.

So where does money come from?  The Federal Reserve is the obvious answer.  They print our money on fancy cotton paper in a basically monochromatic scheme.  Why they haven't switched to some kind of plastic which can be washed, endures much greater abuse, and lasts longer, I don't know.  Why they haven't printed different denominations on different size paper to make it easier for the blind and the visually impaired to manage their cash, I don't know.  Why they don't print the money in different colors for similar reasons and ease of transaction, I don't know. (I have to begrudgingly admit that it was my Kiwi brother in law, who I incessantly berated for not being able to count money at the register, that brought all this money logistics stuff to my attention.)  Tradition, maybe.  I guess it doesn't really make a difference since less than 5% of all money in circulation is in printed cash form.  The rest is electronic or in other forms even more obscure.  But back to the matter at hand: The Federal Reserve.

It just makes cents.  Get it?

With a name like that, you would imagine that it would be some part of the national government.  But you would be wrong.  Don't worry.  All the bankers thought the same.  The Federal Reserve is a privately owned, corporate bank that lends money to the American Government at interest.  Feel free to read that again.  Every dollar in circulation, every dollar used to finance a road project or an international war, or a major corporate bailout is on loan and must be payed back to the Federal Reserve by the US Government.  But if there is interest, then the amount of money in circulation can not and never will be enough to satisfy the debt.  The only way to repay what's owed is to put more money in circulation which incurs more interest.  It's insane to think about.  It's circular logic to a destructive degree.  But it's an important concept to grasp.  Somehow, at some point in history, we privatized our money supply.  We made it a commercial endeavor for a few very rich, very powerful men.  I still don't know what to think about all this.  Well, I do.  But they aren't popular ideas.  Because they include totally whacked out goals like trying to simplify my consumer existence and reduce the amount of money necessary for daily existence.  In other words, my goal isn't to make a million dollars.  My goal is to find a way to never need a million dollars.  Stupid, I know.

There was a point in history when control over the nation's supply of money was guaranteed to the American people by The Constitution of the United States.  But that all ended when Woodrow Wilson took office.  There are various conspiracy theories surrounding the institution of the Federal Reserve.  Even though they do correlate with reality, I don't want this to become anymore conspiracy theory nutjobesque than it already is.  So I'll just tread water here on the surface.  Google the theories if you're interested.  They're pretty expansive.  Anyway, like many other major acts of government that seem to be in violation of our basic human and constitutional rights (Ahem! Federal income tax. Cough!) it seems as though due process was conveniently circumvented in the case of the Federal Reserve Act.  Rather than bitch about all that stuff that I can't really verify because I wasn't born and don't fully understand the legislative process, I'll just go ahead and print the words directly from the horse's mouth.  The horse had this to say about signing the Federal Reserve into existence:

I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.

If I may infer, it would seem as though President Wilson had some small regret over how it all went down.  I mean, I had to read between the lines.  But after some careful analysis, I was comfortable making the assumption that he didn't use the phrase "ruined my country" to mean a good thing.  It's worth noting that The Great Depression began just 8 years after the end of Wilson's presidency.  This led to the abandonment of the gold standard and our nation's almost pathological reliance on credit.

There are a few other questions that need to be answered.  What gives money it's value?  We used to have the gold standard.  That was done away with.  Even then we were an industrial nation with a strong GDP and good exports.  But we don't make anything anymore.  So from where could our money possibly derive it's value?  Another important question is how does that interest owed to the Fed get paid?  Intrinsically you know the answer.  You just don't know how simple and absolute the answer is.

This is just another in a laundry list of examples of how our power and autonomy is being diverted.  Just because the gears were set in motion before many of us were born doesn't mean we're not holding the wrench.  We can either toss it into the machine and bring it to a grinding halt or we can turn a few nuts and bolts and change the way it operates.  The third option is to allow it to run until every part of it has been so exploited that it breaks on it's own.  But by then it will be too late.  Simple reassembly will be impossible.  We'll have to start from scratch.

Answers to come... if you don't find them first before I get the chance to write again.  It gets worse.

Disclaimer: I want to be clear about something for individuals or organizations that may get the wrong idea about what I'm saying.  I am not anti-government.  I am not anti-corporate.  I am simply against the abuse of power.  I am a proponent of power-with rather than power-over.  Interdependence rather than dominance.

This is just a brief and incomplete synopsis.  As always, I encourage you to research more and broaden your understanding.  I'll try to be funnier next time.  It'll mitigate the shock.