Underground Politics Independent Politics, History, and Economy

23Nov/140

The Irreverent Guide to U.S. Monetary History

What is this "the market" you speak of, if not a series of government grants and privileges?

Without the Treasury honoring the Federal Reserve's obligations, there is no "the market."

You want competing currencies? Get a time machine and go west. We tried it. It sucked. Every other day another bank went bust, and took a whole bunch of worthless currency and overhyped bullion promises with it. Turns out private sector currency manipulation makes Keynesian governments look like boyscouts.

So we tried to print all our own public currency at the Federal level, and that didn't work so well either. Well.. a big part of the problem was that we ended up in the middle of a crazy civil war, so maybe we should also remember that two governments operating with purely public and purely fiat currencies were able to raise the largest industrial-era armies the world had ever seen. Just imagine if they had skipped the war and gone straight to building railroads?

But alas, the public currency died at the demands of the British financiers who made loans to our shattered republic in the aftermath of destruction. They insisted we abandon our current corporate regulations to adopt their concepts of limited liability and government sponsored cartels that evolved directly from the hereditary privileges of those aristocrats chartered to do the crown's royal business. Upon securing favorable loan and regulatory terms with the U.S. Congress, they funneled huge sums of cash to Rockefeller, Morgan, and other would-be "barons" who could successfully corner and monopolize essential industries.

The restoration of the financial nobility's control over America was set to be codified in 1913, but there was just one fatal flaw in the Federal Reserve System: It was too effective.

By 1929, consolidation of the nation's wealth and inequality had reached such a peak that it made 1850's slave plantations look like a bunch of egalitarian hippy communes.

But a strong economy can't exist unless a lot of people have discretionary income: When you consolidate all of the country's capital, no one has anything left to spend. Sure, you can build an incredible palace here or there, but the rest of the economy collapses and you end up with pissed off peasants at Blair Mountain or something.

So we came up with one more solution in the 1940s. It was incredible. It put every other innovation to shame.

We kept the effectiveness and price stability of the Federal Reserve System, but we stripped it of the rich-right wing WASP conspiracy to "get as fucking rich as possible and fuck everyone else" by recovering a large part of the profits of those who were most able to manipulate it for their own benefit.

We took that money and we built transportation networks and schools that were the envy of the world! And you know what happened next? Those kids growing up in those schools grew up to know a lot of stuff about how to build stuff and make even more money! The economy boomed! We went to the goddamn *moon*!

Since then? Well, a lot of the banks attached to those old names, Chase-Rockefeller, JP Morgan, Goldman Sachs... well, they own everything again. The economy's shit. The peasants are getting pissed off, and they'll probably only continue blaming the Muslims for so long...

Filed under: Economy, History No Comments
2Feb/111

The Underground History of English Institutions, London, and the United Kingdom

Especially as in reference to the settlement of the United States, and the origin of America's monetary systems, corporations, and ownership class

(1066-1250s)

See, when William the Conqueror got to London London, there was already a walled city there and any attempt to seize it would have been quite bloody. It had old Roman defenses and advanced forges to make quality weapons and metal currency. They even had rudimentary banks and pretty good access to naval trade without much vulnerability to naval attacks. So instead, William set up his own castle and army on the other side of the river so he could keep an eye on and tax the city as much as possible. This gives him a sphere of influence over local agriculture, and it gives him a powerful point of trade leverage with the city. Oh yeah, recent discoveries also suggest that there was already a fairly urbanized Anglo-Saxon settlement there outside the walled city. They would have definitely been good allies for the new self-proclaimed king.

William's solution to gaining control of the walled city was to commission a new class of nobility: the barons, a commercial elite nominally loyal to and backed by the crown. Of course, the king couldn't control the barons and just two saeculum later they would revolt, kidnap the king, and force him to sign concessions over to the city (Magna Carta).

What concessions did they want? They wanted control of the money supply: exclusive license to mint coins and more freedom for the baronry. They also wanted a bridge over the river that could be used as fortification against the king's potential invasion. This was also around the same time the Bank of London opened its first branches in Ireland & Scotland (next to the brand new prisons and noble's castle, of course).

(1530s-1680s)

Fast forward a mega-cycle and some of the walls between banks, kings, and priests started to break down between Henry VIII, Elizabeth, and James_I_of_England itemtype='http://schema.org/Person'>James I. Instead of London building up defenses pointed internally, the ruling classes start to plot together about expanding influence externally.

So by the time James I was king of the UK (~1600), the military could actually expand out and start to collect land & taxes from the Scottish & Irish. Even though James himself was Scottish, this was a pretty messy process because the army was basically enforcing the king's ownership of everything. But to keep the nobles happy, the crown had to give them bigger mansions, more rural estates, and more for-profit plantations packed with virtually free labor.

"Oh, this was your land? Those were your ancestral cattle herds? Haven't you heard that all cows and dirt belong to the crown now?" Add in Guy Fawkes, and suddenly everyone and every clan who didn't immediately submit was written off in the English history books as terrorists, heathens, raiders, and bandits.

It gets soooo bloody, especially after Cromwell, that the nebulous concept of "the people" starts to become a recognized political institution. The House of Commons starts off as relatively insignificant, but over hundreds of years "the masses" have kind of found their identity & occasionally fight back. Mostly though, commoners are being pushed back and toward the New World - because if you aren't English or noble you just might starve after your taxes were paid. (At one point, every food other than potatoes is taxed at 100%, and this kind of made the potato famine in to a big deal. Fat landlord to starving peasant: "Oh you grew a carrot? I'll take that, by order of the king! Yum!" It was also obviously illegal for commoners to go hunting and fishing in the king's woods, rivers, and seas)

(1860-???)

Fast forward again: The barons won even more significant concessions between 1860 and 1910. Fundamental to this was the limited liability corporation and private central bank. Before then, corporate charters were limited to the king's direct approval, but after that they were pretty much open to anyone who already had money (guess who already had all the money?!)

Under pressure from the dominant empire of the day, and in financial trouble from the Civil War, American politicians also accepted these "innovations." Of course, that meant a whole lot of English money flooding in to the American economy through a select few "robber" barons, and institutions that would protect them from any responsibility for the costs of human tragedies and tactical mistakes they'd make. Perhaps most essential of all, was preventing the issuance of more Greenbacks or United States Notes or State-Chartered Bank Notes - non debt-based fiat currencies.

By the dawn of the mass media era, only a few broadcasting companies existed, and they were all tied right in to the big London/NYC banks and the military industry. A combination of high capital requirements and restrictive political licensing kept significant competition from popping up. To see how that plays out in the real world, just look at the Anglo-Persian Oil Company (a.k.a. BP) and America's involvement in Operation Ajax:

"Hey Iran: all of your oil and sand belongs to the barons now." And anyone who resists is a terrorist, heathen, raider, or bandit...

So... here we are! Even though the crown itself is obsolete, the same old ~2% nobility still own ~50%+ of everything. Some might call the growing cultural inclusiveness and merit-based ascension of some businessmen to this elite as progress enough. The "full citizen" part of the empire has also grown. I guess it is something but I won't accept it as "good enough."

And if there's any credible yet non-violent threat to the system, it is alternative forms of money and media. Money that is backed by something, or even nothing at all if it isn't denominated in debt and issued by a select cartel. Local currency, bit-coins, bags of old silver quarters - whatever.

If that doesn't work, the choices might boil down again to fight vs. flight. History just warns me that the fight is doomed to division & failure... and that we've pretty much run out of places to flee to!


Anyway, this is what the history of English-speaking political and commercial institutions might sound like, if it wasn't already written by the winners. 😉

Filed under: History 1 Comment