| This is a history of money and the reason a Federal | | | | there is real gold to back it. This causes the value of |
| Reserve Note isn't backed by gold or silver anymore. | | | | the original $1,000 to loose 90% of its value. |
| You will learn unforgettable information about money, | | | | Therefore to buy a horse now, it would cost $500. |
| debt and where banks get the money to fund your | | | | Thus, a history of money and INFLATION. |
| credit card or loan. | | | | Everyone now has way more money then they did |
| A History of Money and Trade | | | | the year before, they feel rich. There are still the |
| To start with a history of money and debt, we must | | | | same amounts of products and services being sold, |
| go back many years ago when people used to trade | | | | just a lot more dollars to bid for them, thus most |
| their wares for the things they wanted and needed. | | | | prices go way up. This is called a boom. |
| In place of money or Federal Reserve Notes, you | | | | Now the next thing this causes is for the $1,000 of |
| could trade a well made pistol for a cow, which you | | | | interest and any portion paid to the principal of these |
| could eat or trade a remainder of for other items like | | | | loans to go directly into the goldsmith's pocket. Let's |
| clothing. | | | | say over the course of the first year, the borrowers |
| It didn't take long for people to realize there needed | | | | paid back $1,000 worth of principal and $1,000 in |
| to be a more efficient means of trade. If you were | | | | interest. |
| a farmer, it was too difficult to carry baskets of | | | | This means there is still $1,000 of real cash money |
| fresh corn around to trade for a new horse. And, the | | | | notes backed by REAL gold. $9,000 in funny money |
| person selling the horse might not want any corn at | | | | loans outstanding, $9,000 in total notes circulating and |
| all. | | | | the goldsmith has pocketed $2,000. |
| A History of Money and Gold | | | | So, the goldsmith is now up $2,000 out of thin air, |
| So, people used gold for cash money, which always | | | | and there is now $9,000 in notes circulating which |
| had a stable value, to trade for the items they | | | | needs to pay back $9,000 owing. And the cost of |
| wanted and needed. This way the horse dealer could | | | | everything has gone up ten fold. Now lets move |
| always trade the gold received from the farmer for | | | | forward another year. |
| the clothing he really wanted instead of having to | | | | Let's say over the course of the second year, the |
| take the corn. | | | | borrowers paid back $1,100 worth of principal and |
| In a history of money and gold, this only posed one | | | | $900 in interest. There is still only $1,000 in notes |
| problem. Gold was very heavy to carry and hard to | | | | backed by REAL gold. $7,900 in loans outstanding, |
| conceal. In the beginning of our banking history what | | | | $7,000 in total notes circulating and the goldsmith has |
| people would do is leave their gold with a goldsmith - | | | | pocketed another $2,000, totaling $4,000 thus far. |
| The goldsmith would then give them a note, or paper | | | | Let's say over the course of the third year, the |
| money, that stated how much gold they had on | | | | borrowers paid back $1,200 worth of principal and |
| deposit with the goldsmith (bank). | | | | $800 in interest. There is still only $1,000 in notes |
| The farmer could then take this paper money note, | | | | backed by REAL gold. $6,700 in loans outstanding, |
| say worth $50 to the horse dealer and buy a horse | | | | $5,000 in total notes circulating and the goldsmith has |
| with it. The horse dealer could then spend this $50 | | | | pocketed another $2,000, totaling $6,000 thus far. |
| paper note or go back to the goldsmith to pick up | | | | A History of Money and Recession |
| the $50 of gold that he had just acquired by selling | | | | People tighten up their spending for no apparent |
| the horse to the farmer. | | | | reason, but it is soley because there are less notes in |
| Well, why would the horse dealer want to trade in | | | | circulation. So, prices start to fall. Businesses can't |
| the cash money note for the heavy gold, when he | | | | survive with the lower incomes, so they lay people |
| just wanted to trade it for clothing and food anyway. | | | | off, thus giving even fewer people money to spend. |
| So, the note would continue to trade hands and very | | | | And, now we have the beginning of a history of |
| few people would ever go redeem it for the gold it | | | | money and RECESSION. |
| was backed by. | | | | Year four, the borrowers paid back $1,300 worth of |
| It didn't take long for the goldsmith to understand | | | | principal and $700 in interest. There is still only $1,000 |
| this reality. So, here he is storing all of this gold for | | | | in notes backed by REAL gold. $5,400 in loans |
| other people. Let's give it a value to make this next | | | | outstanding, $3,000 in total notes circulating and the |
| principle clear. | | | | goldsmith has pocketed another $2,000, totaling |
| Let's say the gold he is storing is valued at $1,000 | | | | $8,000 thus far. |
| and there are $1,000 in real cash money notes | | | | Year five, the borrowers paid back $1,400 worth of |
| backed by this real gold being circulated. | | | | principal and $600 in interest. There is still only $1,000 |
| A History of Money and Loans | | | | in gold. $4,000 in loans outstanding, $1,000 in total |
| When many people wanted a loan for say a total of | | | | notes circulating and the goldsmith has pocketed |
| $1,000, he decided no one would notice and it would | | | | another $2,000, totaling $10,000 thus far, but $4,000 |
| be real easy to lend them someone else's gold, well | | | | is still owed. |
| actually a funny money note which was a promise to | | | | With only $1,000 in total notes circulating, people |
| pay gold upon redemption of the note. And, he'd only | | | | obviously cannot continue to pay, so there is one |
| charge 10% interest. | | | | thing left and that is the confiscation of their assets, |
| In a history of money and loans, this caused another | | | | and the remaining $1,000 in total notes circulating. Can |
| problem. If everyone came in to redeem their notes, | | | | you say BANKRUPTCY. (which is now almost |
| there would not be enough gold to pay back | | | | impossible) |
| everyone because there was only $1,000 in real cash | | | | A History of Money and the FED |
| money notes backed by REAL gold.hat didn't matter | | | | Oh, I know says the goldsmith, I'll just have to keep |
| to him, why not lend out to anyone who looks like | | | | lending this counterfeit money backed by nothing so |
| they can repay? And, that year he lent out a total of | | | | they can work hard for me for free, and I will own |
| $10,000 worth of newly created or you could say | | | | every asset on this planet for free. So the goldsmith |
| counterfeit, funny money notes. Oh well, who cares | | | | starts to lend out money again and lends out $10,000 |
| says the goldsmith, no one is coming in to get their | | | | the first year which again causes the BOOM. And, on |
| gold anyway. | | | | and on it goes. |
| So, now there is $1,000 in real cash money notes | | | | The only difference today is that there is no limit to |
| backed by REAL gold, and $10,000 in funny money | | | | the lending, so there's continual money being created |
| loans, thus $11,000 in total notes circulating. The | | | | which forces us to fight each other to get our hands |
| goldsmith is charging his 10% or $1,000 per year of | | | | on it, to pay back our own share of debt, while the |
| interest and don't forget every penny of the original | | | | price of everything skyrockets endlessly. |
| counterfeited principal is his to keep. For simplicity, | | | | And, the goldsmith's are now called the Federal |
| lets say he now stops lending! | | | | Reserve System and the funny money counterfeit |
| A History of Money and Inflation | | | | notes are called Federal Reserve Notes. In the 1930's |
| Lets look at what this causes. There is now ten | | | | there was roughly $16 Billion in gold at Fort Knox, and |
| times as much currency/notes floating around then | | | | now we owe $8,339,711,774,335. |