“It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” – Henry Ford
The encapsulated quote signifies something. What actually is the monetary system, What is banking and why don’t people understand it, and even if they do, how long is it going to take to take this world to a revolutionary stage.
This Article doesn’t contain any information regarding Blockchain, Cryptocurrency or application of the technology. This article simply focuses on the questions, What is the actual definition of money, who controls it, what is wealth, what is value and who has the power of controlling you monetary value.
Who controls all of our Money?
It’s a very simple question. We know that you and I don’t control it. Our employees don’t control it. The companies they work for don’t control it. where does the money come from in the first place?
It’s interesting to know that the money doesn’t come from the government. It’s a question that is never asked or taught in the school for some reason. Unfortunately, most people’s lives are basically dedicated to money. People today can tell that there is something wrong about our financial system, but they cant put their finger on it.
Some people think that it’s the failure of government, others think that it’s the failure of the capitalism itself and why not? The modern capitalism is based on “The Greater Fool” Theory. But the reason is Central banks or the powers associated with centralisation itself.
Central bank is more influential than laws, governments and politicians, but strangely not the focus of the general public. How the American Federal Reserve was formed is a matter of public record and everyone has access to it if they are looking for it.
Today, the Federal Reserve is the most powerful entity in the United States and they are not ashamed to admit it either. The Former Federal Reserve Chairman, Alan Greenspan said:
“The Federal Reserve is an independent agency and that means basically that there is no other agency of the government which can overrule the actions we take, what the relationships are don’t frankly matter.”
In addition to this, it seems that the Fed can’t even be touched by the investigating parties. The Federal reserve extended nine trillion dollars in credit, which could work out to $30,000 to every single man, woman and child in United states of America. Nobody from the Federal Reserve keeps that track of this. This fact might not be effecting to the people who states that they don’t even live in the US.
The Central banking system from the United States and Europe has now been put in all the countries and even consolidated power in parts of Europe as the European Central Bank (ECB), this united many other countries under one economic policy. The only places in the world that don’t have Central Banks are North Korea, Iran and Cuba. In 2000, this list suspiciously included Afganistan, Iraq and Libya.
Since the end of World War II, the US dollar has been the reserve currency of the world. This means that all Central Banks hold US dollars in their reserves, which means, all other currencies are backed by the US dollar. This leaves every country to link directly with the Federal Reserve’s Monetary policy in America.
Where is Gold now?
When the post- World War II monetary system called the “Bretton Woods” system was created, all US dollars were backed by and were exchangeable for Gold. The Byproduct was that the currencies used to be very stable in relation to each other. As one of the Monetary Historians & investor, Mike Maloney said:
“All the countries, the exchange rates were fixed and year after year you could predict what prices were going to be. You could start a business elsewhere, you could calculate profits, business was much easier before floating exchange rates.”
Unfortunately, in 1971, due to a falling US dollar, international capital flows into gold and the funding of the Vietman War, President Nixon took the US dollar off the Gold standards. As the President said:
“I have directed secretary Connally to suspend temporarily the convertibility of the dollar into Gold or other reserve assets.”
Now the dollar was backed by nothing and has been floating ever since.
Money is one of the most important aspects of our life and the system we live in, is backed by the US dollar, which is backed by nothing.
So, Who controls the money?