Who Owns the Currency?

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Editor’s Foreword:

I usually don’t “cut n’ paste”, but this is an important article. It’s a read n’ heed… compare THIS to the gaseous nonsense spouted by Rush Limboob and the Fox “News” claque. You can see the difference… objective truth as opposed to partisan Republican rightwing horseshit.

BMD

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I have a friend that calls me from time to time to discuss the financial crisis. I should say from the outset that my friend operates on the far end of the curve. That’s to say, his views and thoughts are generally ahead of the mainstream by at least a couple of years, but his predictions freakishly all come to pass. Recently, he called me to discuss the Euro and currency in general. He asked me a simple question, “Who owns the Euro?” Well, surely, the European Central bank owns the Euro. No! Definitely… all the members of the European Union own the Euro? If the European Central Bank owns the Euro, or, if all the members of the European Union own it, then, why is there a crisis with the Euro? Why is there talk of members leaving the European Union or talk of the Euro collapsing or disappearing? I did some research and here’s what I found.

Currency is, or I should say was, originally backed by something. Usually, it was gold or silver. The question is, “Who backs it?” Whose gold or silver backs currency? Does the government back it, or, is currency privately backed? In addition, where is all the gold and silver that backs or backed currency? Let’s start with the world’s reserve currency, the USD. The USD became the world’s reserve currency at the end of the Second World War, replacing the British pound. The Bretton Woods agreement effectively anointed the USD as the world’s reserve currency because the US economy was by far the strongest in the world with the most industrial output, the most production of oil and coal, and, of course, the most powerful military in the world. Backing the USD was gold, with Fort Knox holding 7,500 tons that secures the USD, or did. You see, there’s no public record, oversight, or audit to ensure the gold is actually there. Who gave the United States 7,500 tons of gold in the first place?

There are 33 trillion USD (1.05 quadrillion Roubles. 24.7 trillion Euros. 21.3 trillion UK Pounds) in circulation. When you add all the euros, pounds, yen, and other currencies together, there are 88 trillion USD (2.78 quadrillion Roubles. 65.9 trillion Euros. 56.8 trillion UK Pounds) equivalents in circulation. Yet, when you look at all the derivative positions in the market, then, there are 650 trillion USD (20.5 quadrillion Roubles. 487 trillion Euros. 420 trillion UK Pounds) in value. There seems to have been some double counting, or, worse, duplication. Has someone being duplicating currency? What about the USD? Who owns the USD? Actually, as we know, printed on the USD are the words Federal Reserve Note. We know that the Federal Reserve’s a private institution. The Federal Reserve was created in 1913 by the congress with the Federal Reserve Act. Does the Federal Reserve own the 7,500 tons of gold that backs the USD? Unlikely! Is there an organisation within the Federal Reserve that owns the gold? I think not. If we go a little further back in time, we get to 1688. This is when William III decreed that printing money was no longer a sovereign right. In 1694, the Bank of England was formed, a private institution, which was granted the power to print money.

It should be noted that for the first 150 years of America’s life, the colonies there fought for the right to issue their own currency, or scrip, which was free of interest and used to settle trade. The current Federal Reserve is the third incarnation of its kind in the United States. Banks and central banks have tried successfully to control the issue and supply of money into a country’s monetary system. This is the practise today. There’s no logical reason why sovereigns, each country, can’t print and control the issue of their own currency and issue it without interest. The problem with currency today is that it’s become a commodity. Rather than being used as a tool for the settlement of trade and to facilitate stable money supply, currency itself is being traded. As a result, we have hugely volatile markets across almost every asset class, and sovereigns are loaded with unnecessary debt that they’ll never pay back. None of this provides a stable money supply or the ability to settle trade.

So, who owns the Euro? I don’t know. What I do know is that whoever it is, they aren’t handing over more until the financial system is reformed. The commoditisation of currency appears to have included duplication. Why do banks have so much money, stock markets have so much value, yet, sovereign nations have perpetual debt? Financial system reform’s likely to be wholesale and soon. It’d be fair to see people arrested for financial fraud and corruption across many countries. The Occupy Wall Street movement is a modern day civil war. The people want control of their money back.

22 November 2011

Sam Barden

Sam’s Exchange

RIA-Novosti

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