Funny Money On The March

(Conspiracy Nation, 4/13/02) -- See the march of money, through time.

It is hard to do money calculations with Roman numerals. Try to multiply LXIV by XCIII. Try to figure what an interest rate of VI percent will yield on a bank deposit of MCXX. You might say, "I'll just change VI to 6 and MCXX to 1,120. Then I'll figure from there." But prior to 1202 A.D., so-called "Arabic" numerals had not been introduced into Europe. (The Arabic number system actually originated in India and passed from there to the Arabs.) Arabic numerals were a system of notation. But as in language, which influences thinking, so too does the mathematic decimal language influence what becomes "true" in mathematics. In his essay, "The Nature of Mathematics," Philip E.B. Jourdain describes "the strange way in which mathematics has developed. For centuries mathematicians used 'negative' and 'positive' numbers, and identified 'positive' numbers with signless numbers like 1, 2, 3, without any scruple, just as they used fractionary and irrational 'numbers.' And when logically- minded men objected to these wrong statements, mathematicians simply ignored them or said: 'Go on; faith will come to you.'" (qtd. in The World Of Mathematics, by James Roy Newman, Vol. I).

The Arabic numeral system was a new toy for mathematicians to play with. John Napier (1550- 1617) looked "with the eyes of a Greek-trained mathematician upon this (Arabic) notation as upon a new plaything." ("The Great Mathematicians," by Herbert Westren Turnbull. qtd. in Newman, op. cit.) And while true that the Arabic system introduced a "great spirit of economy" (Jourdain, op. cit.) to what was already understood, the new number system began to spawn abstractions, not necessarily connected with reality. But, "Go on," said the mathematicians, "and faith will come to you."

The new Arabic numeral system spawned, in turn, banking houses, which sprang up in north Italian city-states such as Florence, Venice, and Genoa. (The History of Money, by Jack Weatherford) The Arabic numeral system brought mathematics to the masses; it "democratized mathematics." (J.D. Bernal, qtd. in Weatherford, op. cit.) Previously, mathematics had been like a leisure-time activity, enjoyed only by the idle class. Mathematical discoveries had been "treasured as family secrets, only to be divulged to a few intimate disciples." (Turnbull, op. cit.) The new system of notation was quickly seized by the commercial class. Double- entry bookkeeping was invented, itself another system initially connected with reality but tending to spawn abstractions.

Because the new number system came to Europe from "infidels" (Arabs/Muslims; India/Hindus), the Roman Catholic church and its government/university connections were gravely suspicious of it. (Weatherford, op. cit.) The bankers too were viewed with disfavor. "A Dutch church ordinance passed as late as 1581 prohibited bankers, along with the practitioners of other unsavory professions, from receiving Holy Communion. The law remained in effect until 1658." (Weatherford, op. cit.)

The Arabic numeral system spawned abstractions. The system of double-entry bookkeeping spawned abstractions. These abstractions led to what Weatherford describes as "the magic of bank money": "...a bag of a hundred florins (gold) that might once have sat idle... could now be deposited for safekeeping in an Italian bank that had access to branches across the continent. The bank then lent the money and circulated the bill of exchange as money. The (owner) still had his one-hundred florins, which were now on deposit in the bank; the bank had one-hundred florins on its books... Even though only one-hundred gold coins were involved, the miracle of banking deposits and loans had transformed them into many hundreds of florins... it was sheer magic." (Weatherford)

This (above) is the abstraction known as "fractional money." Originally, goldsmiths nee bankers stored the gold; another class of merchants called "scriveners" loaned out the gold. The goldsmiths nee bankers figured they'd get in on the scriveners' action; the goldsmiths began lending redeemable receipts, charging rent, "interest," on their loans. They didn't lend the actual gold; they lent receipts -- "money" -- redeemable in gold. But these receipts were rarely redeemed. The next step, the "fractional money" step, was for the goldsmiths nee bankers to circulate many more receipts than they had actual gold to redeem those receipts.

From Roman numerals to Arabic notation; from Arabic notation to double-entry bookkeeping; from there on to fractional banking: see the march of "money" through time.

The goldsmiths issued many more receipts than the actual quantity of gold they held in storage. It was unlikely that all those who had the paper receipts would appear on the same day and demand their gold. From this emerged, over time, the system of fractional reserve banking: besides issuing paper receipts for gold/silver deposits, banks "now issued loans in the amount of eighty- five percent of [their] deposits. These were in addition to the original receipts. That made 85% more receipts than coins [gold/silver]. Thus, the banks created 85% more money and placed it into circulation through their borrowers." (The Creature From Jekyll Island by G. Edward Griffin. ISBN: 0-912986-21-2). You see, a bank counts a loan as an asset, a plus in their holdings. And since the banks' "assets" (via double-entry bookkeeping) had now grown by 85%, that meant the banks could create even more "assets" based on that 85% increase. So they'd issue loans based on 85 percent of that 85%! That 85 percent of 85% chain-reacted into 72.5%, then 61.62%, then 52.38%, and so on. Each group of loans created more "assets" which in turn allowed the banks to issue more loans, thereby creating more "assets." Banks can issue loans, limited to 85 percent of their assets, but those loans count as assets and so the banks can issue further loans -- a neat chain reaction for those who actually own the banks!

Then, in 1913, the various major bankers decided to get together and form a monopoly bank: the "Federal" Reserve. This mis-named Federal Reserve is actually not owned by the American people, but by such major banks as Kuhn, Loeb Bank, Chase- Manhattan Bank, and Goldman, Sachs Bank. ("A Green Conspiracy," by Wayne Henderson. From book, Popular Alienation, by Kenn Thomas (ed.) ISBN: 1-881532-07-0.) And who are the primary stockholders of, for example, Chase-Manhattan Bank? Does the name "Rockefeller" ring a bell?

In the 1930s, they began moving away from any gold/silver backing for paper money, until in the 1960s only 2-dollar bills were still redeemable in specie (silver). President John F. Kennedy dared to write "an Executive Order, June 4th, 1963, that authorized the printing of United States notes in place of Federal Reserve notes... That, in itself, was enough to get him killed. It's similar to what [Abraham] Lincoln did in 1863 that cut off the bankers from their compound interest money. And of course, it got Lincoln killed." (From lecture given by Lt. Col. (Ret.) James "Bo" Gritz in Mesa, Arizona, April 4, 1992.)

Marco Polo, during his travels through China in the 13th century, described a then-amazing thing:

  "[They make] something resembling sheets 
of paper, but black. All these pieces of paper are 
issued with as much solemnity and authority as if 
they were of pure gold or silver; and on every 
piece, a variety of officials, whose duty it is, 
have to write their names and to put their 
seals... And the Kaan causes every year to be made 
such a vast quantity of this money, which costs 
him nothing... With these pieces of paper, [the 
Khan] causes all payments on his own account to be 
made... And nobody, however important he may think 
himself, dares to refuse them on pain of death." 
(qtd. in Griffin, op. cit.)

The Khan's money was just pieces of paper, but the Khan's law forced all to accept this paper as if it had value. Now read what it says on the front of, for example, a one-dollar Federal Reserve note:

"This note is legal tender for all debts, public and private."

Once more the Khan Concept is in use. The full force of the law stands behind the various Federal Reserve notes, pointing a gun at your head and saying, "Accept this -- or else!"

By the 1960s, what was passing for money in the U.S. was entirely Chinese Khan fiat money. But why use paper at all? The Khan had the abacus in his day; we have computers and worldwide electronic communications. "Money," once abstracted into double-entry bookkeeping in banks' ledger books, began migrating into binary code, blips and bleeps, in computers.

The larger ramification of this "digital cash" is that it is extremely easy to track. When you pay with digital cash (e.g. by credit card), those blips and bleeps are recorded by at least one central data base. J. Orlin Grabbe, formerly a professor at Wharton, has written critically about this latest phenomena of digital cash. In two of his essays, "The End of Ordinary Money" (parts 1 and 2), Grabbe explores "the use of the monetary system for government surveillance." Even the paper "money," warns Grabbe, is becoming "detectable by currency-detection equipment in airports (and possibly other places)..."

From Arabic numerals, to double-entry bookkeeping, to goldsmiths nee bankers and fractional money, from there on to fiat money ("legal tender") and a bankers' monopoly called the "Federal" Reserve, and from there to digital money, blips and bleeps: see the march of money, through time.

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