A History of Money and Banking Secrets That Banks Dont Want Published
A History of Money and Trade
To start with a history of money and debt, we must go back many years ago
when people used to trade their wares for the things they wanted and
needed.
In place of money or Federal Reserve Notes, you could trade a well made
pistol for a cow, which you could eat or trade a remainder of for other
items like clothing.
It didn't take long for people to realize there needed to be a more
efficient means of trade. If you were a farmer, it was too difficult to
carry baskets of fresh corn around to trade for a new horse. And, the
person selling the horse might not want any corn at all.
A History of Money and Gold
So, people used gold for cash money, which always had a stable value, to
trade for the items they wanted and needed. This way the horse dealer
could always trade the gold received from the farmer for the clothing he
really wanted instead of having to take the corn.
In a history of money and gold, this only posed one problem. Gold was very
heavy to carry and hard to conceal. In the beginning of our banking
history what people would do is leave their gold with a goldsmith.
The goldsmith would then give them a note, or paper money, that stated how
much gold they had on deposit with the goldsmith (bank).
The farmer could then take this paper money note, say worth $50 to the
horse dealer and buy a horse with it. The horse dealer could then spend
this $50 paper note or go back to the goldsmith to pick up the $50 of gold
that he had just acquired by selling the horse to the farmer.
Well, why would the horse dealer want to trade in the cash money note for
the heavy gold, when he just wanted to trade it for clothing and food
anyway. So, the note would continue to trade hands and very few people
would ever go redeem it for the gold it was backed by.
It didn't take long for the goldsmith to understand this reality. So, here
he is storing all of this gold for other people. Let's give it a value to
make this next principle clear.
Let's say the gold he is storing is valued at $1,000 and there are $1,000
in real cash money notes backed by this real gold being circulated.
A History of Money and Loans
When many people wanted a loan for say a total of $1,000, he decided no
one would notice and it would be real easy to lend them someone else's
gold, well actually a funny money note which was a promise to pay gold
upon redemption of the note. And, he'd only charge 10% interest. In a
history of money and loans, this caused another problem. If everyone came
in to redeem their notes, there would not be enough gold to pay back
everyone because there was only $1,000 in real cash money notes backed by
REAL gold.
That didn't matter to him, why not lend out to anyone who looks like they
can repay? And, that year he lent out a total of $10,000 worth of newly
created or you could say counterfeit, funny money notes. Oh well, who
cares says the goldsmith, no one is coming in to get their gold anyway.
So, now there is $1,000 in real cash money notes backed by REAL gold, and
$10,000 in funny money loans, thus $11,000 in total notes circulating. The
goldsmith is charging his 10% or $1,000 per year of interest and don't
forget every penny of the original counterfeited principal is his to keep.
For simplicity, lets say he now stops lending!
A History of Money and Inflation
Lets look at what this causes. There is now ten times as much
currency/notes floating around then there is real gold to back it. This
causes the value of the original $1,000 to loose 90% of its value.
Therefore to buy a horse now, it would cost $500. Thus, a history of money
and INFLATION.
Everyone now has way more money then they did the year before, they feel
rich. There are still the same amounts of products and services being
sold, just a lot more dollars to bid for them, thus most prices go way up.
This is called a boom.
Now the next thing this causes is for the $1,000 of interest and any
portion paid to the principal of these loans to go directly into the
goldsmith's pocket. Let's say over the course of the first year, the
borrowers paid back $1,000 worth of principal and $1,000 in interest.
This means there is still $1,000 of real cash money notes backed by REAL
gold. $9,000 in funny money loans outstanding, $9,000 in total notes
circulating and the goldsmith has pocketed $2,000.
So, the goldsmith is now up $2,000 out of thin air, and there is now
$9,000 in notes circulating which needs to pay back $9,000 owing. And the
cost of everything has gone up ten fold. Now lets move forward another
year.
Let's say over the course of the second year, the borrowers paid back
$1,100 worth of principal and $900 in interest. There is still only $1,000
in notes backed by REAL gold. $7,900 in loans outstanding, $7,000 in total
notes circulating and the goldsmith has pocketed another $2,000, totaling
$4,000 thus far.
Let's say over the course of the third year, the borrowers paid back
$1,200 worth of principal and $800 in interest. There is still only $1,000
in notes backed by REAL gold. $6,700 in loans outstanding, $5,000 in total
notes circulating and the goldsmith has pocketed another $2,000, totaling
$6,000 thus far.
A History of Money and Recession
People tighten up their spending for no apparent reason, but it is soley
because there are less notes in circulation. So, prices start to fall.
Businesses can't survive with the lower incomes, so they lay people off,
thus giving even fewer people money to spend. And, now we have the
beginning of a history of money and RECESSION. Year four, the borrowers
paid back $1,300 worth of principal and $700 in interest. There is still
only $1,000 in notes backed by REAL gold. $5,400 in loans outstanding,
$3,000 in total notes circulating and the goldsmith has pocketed another
$2,000, totaling $8,000 thus far.
Year five, the borrowers paid back $1,400 worth of principal and $600 in
interest. There is still only $1,000 in gold. $4,000 in loans outstanding,
$1,000 in total notes circulating and the goldsmith has pocketed another
$2,000, totaling $10,000 thus far, but $4,000 is still owed.
With only $1,000 in total notes circulating, people obviously cannot
continue to pay, so there is one thing left and that is the confiscation
of their assets, and the remaining $1,000 in total notes circulating. Can
you say BANKRUPTCY. (which is now almost impossible)
A History of Money and the FED
Oh, I know says the goldsmith, I'll just have to keep lending this
counterfeit money backed by nothing so they can work hard for me for free,
and I will own every asset on this planet for free. So the goldsmith
starts to lend out money again and lends out $10,000 the first year which
again causes the BOOM. And, on and on it goes.
The only difference today is that there is no limit to the lending, so
there's continual money being created which forces us to fight each other
to get our hands on it, to pay back our own share of debt, while the price
of everything skyrockets endlessly.
And, the goldsmith's are now called the Federal Reserve System and the
funny money counterfeit notes are called Federal Reserve Notes. In the
1930's there was roughly $30 Billion in gold at Fort Knox, and now we owe
$7,937,046,735,823.
So, then I ask you fellow American, is this a history of money and debt
that you thought was going on when you borrowed from Capital One or
Providian? Find out how to get out of credit card debt by visiting us at
http://www.avoid-new-bankruptcy-laws.com/
Mark A. Cella
MORE RESOURCES:
RELATED ARTICLES
Debt Free Living - 5 Tips To Get Out Of Debt
A few times I wonder what sort of credit system moved the global economy
200 years ago. If the intention of getting into a business is meant to
'help' fulfill the needs and wants of someone, I don't see how credit card
salesmen can drove more people into debt and backruptcy.
Bankruptcy Interest Increases as Deadline Approaches
Congress recently passed sweeping legislation that will significantly
reform American bankruptcy law. Designed to eliminate the "convenience
bankruptcy" of compulsive gamblers and the financially irresponsible, this
legislation will make it more difficult for those seeking bankruptcy
protection from the courts to have their debts relieved.
Going Bankrupt in the World
It all starts by defaulting on an obligation: Money owed to creditors or
to suppliers is not paid on time, interest payments due on bank loans or
on corporate bonds issued to the public are withheld. It may be a
temporary problem - or a permanent one.
Debt Elimination
If you're reading this article right now I'm sure that you are looking for
a debt elimination system that will help you get out from under you
personal mountain of debt. Hopefully you're not looking for the magic pill
that will suddenly dissolve your debt problem.
Save Money When Going Out
It seems as though whenever we go out for the night, it costs much more
than we originally intended to spend. Having a 'night on the town'
shouldn't cost you a whole weeks salary.
Benefits and Drawbacks of Bankruptcy
Outlined below are some of the benefits and drawbacks of bankruptcy. It
should be noted that bankruptcy is not to be entered into without first
having sought professional advice.
Debt Negotiation and Debt Settlement
Debt negotiation and settlement can give you a drastic reduction in the
amount of debt you owe and allow you to repay your debts in a much shorter
time. Resolving your debts is important to your well-being and financial
stability.
How To Get Out Of Debt
If you have found yourself in a position where you are in serious debt and
cannot think of a way out of the situation, then take a few minutes to
read these few tips. Some may seem obvious but do put them into practise
as they will help.
Solutions to Single Mothers in Debt
As a single mother, lets admit it, times get tough. You are fortunate
enough to have your children that mean the world to you, but it doesn't
come cheap.
5 Methods Toward Reducing Your Debt
Decreasing your debt is paramount to having a good credit rating as well
as giving you peace of mind. You want to get out of debt, but not all debt
reduction options may be beneficial.
Take Careful Consideration Before Filing Bankruptcy
Filing bankruptcy is not fun! It is a last resort if you are interested in
keeping an active and acceptable credit report. Bankruptcy is the
condition of bringing all your assets and deficiencies into an insolvent
state.
Selecting A Credit Counselor; Asking The Right Questions.
When you find yourself thinking about using a credit counseling service,
you need to be very careful. You need someone who will help you, not just
some pushy sales associate who wants only to sign you up for their service.
Eliminate Your Credit Card Debt, But How?
Can a debt consolidation loan eliminate your credit card debt? A
consolidation loan might (or might not) be the key. There are several
things you must consider when making the choice to consolidate debt using
a debt consolidation loan.
Bankruptcy 101
Bankruptcy still remains a mystery in the eyes of many consumers. This
article will review the facts of bankruptcy as per written law.
Why You Should Get Out of Debt Today?
The main reason for getting out of debt today, is because people with
little or not debt have more control over their future:1. They have more
discretionary income, meaning that you won't be living pay check after pay
check as you probably are right now.
What is Bankruptcy?
Here is a useful guide to bankruptcy. It should be noted that bankruptcy
is not to be entered into without first having sought professional advice.
Out of Credit Card Debt - Without Filing Bankruptcy
To be out of credit card debt is your dream and you're tired of the
redundant advice to live within your means. Look no further.
Debt Recovery Can be Easy
OK, so you are up to your head in debt. You are stressed out, it is now
affecting the way you function and absorbing most of your daily thoughts.
Tips For Saving Money
Still living from pay to pay? Or envying those great wealth accumulators
and wondering how they did it? Every month you make a resolution of saving
some dollars from your paycheck, but only end up breaking it. Looking for
some magic formula for saving money?Well, there's no magic formula—only
some simple rules to be followed with determination and persistence.
Do It Yourself Debt Relief
With mounting bills and unforeseen hardships, you may be considering some
form of debt relief. There are many options to help you, but the best may
actually be you helping yourself.
--
http://venteinternet.blogspot.com |
http://pusatinternetmarketing.blogspot.com |
http://webandblogdesign.blogspot.com
No comments:
Post a Comment