"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." – Thomas Jefferson in the debate over the Re-charter of the Bank Bill (1809).
Money, a temporary placeholder of value, sole purpose was to alleviate barter trading. This temporary placeholder can be anything based upon an agreement among the community. This agreed upon medium should enable the community to measure its value much like one can measure and convert between inches and feet, kilograms and pounds, etc. For example we know that 12 inches is equivalent to 1 foot. Before 1971 a similar yard stick of measuring was in place for the dollar. Thirty Five dollars ($35) was the equivalent to one (1) ounce of gold. Said in a different way the dollar was defined at 1/35 of a gold ounce. After 1971 this measurement was abandon and money became unmeasurable. Why unmeasurable? Because its value now fluctuates at the whim of speculators and the banking system. Take for example the foreign exchange market. There is an extremely good article titled "Why It's Important To Regulate Foreign Exchange" that you should read which can be found here: http://finance.yahoo.com/news/why-important-regulate-foreign-exchange-204500318.html
In this article it states: 'The foreign exchange (forex) market is the world's biggest financial market by far. According to the Bank for International Settlements (BIS)'s triennial survey, global Forex turnover in April 2010 averaged a staggering $4.0 trillion daily, an increase of 20 percent from $3.3 trillion three years earlier. In an increasingly globalized economy, the significance of the foreign exchange marketplace to the average consumer cannot be underestimated. The rate at which our domestic currency can be exchanged in the global forex market determines the price we pay for an increasing number of products, the price-tag for our vacations, the rate of return on our investments (ROI), and even the interest rate on our loans and deposits. And yet, despite the importance of this market, where currency gyrations can dictate the fortunes of everyone from the largest nation to the smallest consumer, foreign exchange remains a largely unregulated business. Although foreign exchange has traditionally been regarded as the exclusive domain of the biggest banks and corporations - recent trends have dispelled this notion, making it increasingly important for foreign exchange to come under the ambit of regulation.' The article goes on to mention the rampant speculation on this Forex market. It states: 'Transactions in the foreign exchange market can be broadly classified into two types – commercial and speculative. A commercial transaction is one that is backed by an underlying economic activity such as payment for an import or a loan to an overseas entity. A speculative transaction, on the other hand, is one that is undertaken purely to make a profit from currency moves. Speculative transactions greatly exceed commercial transactions in the realm of foreign exchange, and have been accounting for a greater share of forex trading volumes over the years. Also, currency trading volume in the 1970s was only about six times the value of global trade in goods and services, but by 1995, daily forex trading volume of $1.2 trillion was approximately 50 times this value.'
What is clear, if you have not already caught on, is that non-democratic institutions (not chosen or elected by the people) and speculators have in their power the ability to control, impoverish, etc the masses.
Workers around the world have vastly increased their productivity, yet their standard of living has fallen drastically. How many people work two jobs to pay back money created 'out of thin air' using their own personal credit? How many millions in countries die premature deaths because 'there's no money' for food and doctor's bills? How many people in the 'Third World' starve to death because their countries are burdened with enormous debts to international bankers? (In mid-2001, foreign debt owed to Western bankers was $3,000,000,000,000 - three trillion dollars!). Adapted from: http://www.federal-reserve.net/healthemoneysystem.htm. For people who can visualize one million dollars, the comparison made on CNN should give you an idea about a trillion – "if you start spending a million dollars every single day since Jesus was born, you still wouldn't have spend a trillion dollars". Another mathematician puts it like this: "1 million seconds is about 11.5 days, 1 billion seconds is about 32 years while a trillion seconds is equal to 32,000 years". This brings me to the debt situation which globally stands at over 50 trillion dollars and climbing exponentially. And mind you, this debt is supposed to be repaid by wages and salaries. Sadly however, wages and salaries are showing a decline so it will be very interesting to see mathematically how such exponential growing debt will ever be repaid by non-exponential growing wages and salaries that have to service the same debt. "Money is a new form of slavery, and distinguishable from the old simply by the fact that it is impersonal – that there is no human relation between master and slave." Leo Tolstoy, Russian writer.
In part 3, the final part I will wrap up and give my conclusion.
Emilio Kalmera
