Mountain Politics

How Banking SHOULD Work. Pt1

Fake Value.

Money in itself is not value. Money is an instrument to transfer something that actually has value.

Therefore, money should only be created to represent a specific item of value. Precious Metals used to be the standard of value, and banks were established to hold that gold securely. Due to it’s weight gold is very cumbersome to transfer, and must be carefully weighed to determine it’s value. So a paper alternative was offered.

A person could bring gold or silver into a bank, deposit it, and receive certificates of paper denominated with the value of the gold they rendered.

gold-cert

In order for a bank to stay viable, the depositor allowed the bank to loan their gold out, and charge interest. The banker would then share a portion of that interest with the depositor as his incentive to allow the bank to do so. Problems arose when corrupt bankers would loan out paper money without actually having the gold it allegedly represented.

They created FAKE VALUE.

In today’s banks, their is no longer any value to back up the paper certificates.  In fact today’s currency is no longer a representation of value but a representation of DEBT. This is why they are called “Federal Reserve Notes”.  A note is a promise to pay back a value.

Black’s Law Dictionary

Note  1. written statement by an individual to pay a sum of money to another individual, or the bearer of the note at a specified period in time.

You must be wondering why you accept someone’s debt and render something of value in exchange for becoming obliged to repay the note.

How did this evolve?  It’s very complex and I will try to explain, through the course of this subject.

 

How Banking SHOULD Work. Pt2