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Part 2:  Historic Examples of Government Monopolized Money

Let's step back and examine the rise of the present currency system used throughout the world and some of the disasters it has created. Each in its details are unique, however we can find common ground among them all.

The Tulip Craze

After gaining their independence from Spain in 1581, The Dutch Republic initially created their economy with systems of local monies which brought great prosperity. Then in 1609 the world's first modern banking system (a euphemism for a government-backed exclusive monopoly bank), The Bank of Amsterdam, was established by the Dutch government.

As government expanded the money supply through this new monetary mechanism, it created an atmosphere that was ripe for speculation and malinvestment which manifested itself in intense tulip trading of all things. Just imagine a flower with a price tag higher than you annual income! The tulip, introduced to Holland by the Turks in 1593 eventually contracted a virus which was not fatal but caused flames of fiery color to appear on the petals. This caused the popularity of this already unique flower to soar.

Between 1636 and 1637 the price of the bulb increased twenty fold as investors mortgaged their homes and liquidated everything they had to get more bulbs. They believed they would sell them to foreigners for a huge profit, but as the sell off got underway, prices fell and a panic ensued. The resulting collapse and depression affected everyone, even those who sold and got out early.

In summary, this new economic pattern that emerged from this is as follows: The creation of an exclusive banking monopoly that created currency for government, followed by expansion of currency and debt, then followed by speculation, followed by depression and impoverishment of the people.

The South Sea Bubble

The second example of this economic pattern playing itself out is found in the development of English finance in the late 1600s and early 1700s. The English equivalent to the Dutch central bank was The Bank of England. This second central bank was established in 1694 and most modern central banks are built on its mode of operation.

As debt was created and expanded to finance the British Empire, the government sought a means of offloading that debt to the English population. Towards this aim, the government of Queen Anne chartered The South Sea Company in 1711. This company was an English trade monopoly between England, South America and the South Sea which we know today as the South Pacific Ocean.

In return for the charter, the South Sea Company loaned the government money and in 1720 arranged for people holding bonds against the government to trade for stock in the company. In this way, this "private monopoly" absorbed the national debt.

The price of the stock in this monopoly soared as investors' confidence grew in the relationship between the government and the company. However, within a very short period of time, investors began to realize that the stock was vastly overpriced and the prices plunged. Thousands were financially ruined in the ensuing collapse.

The Great Depression

Up until our present financial crisis, the single greatest playout of this financial scenario is seen in The Great Depression. In 1913 the distributive monetary system of the United States, which was based on gold and silver, was taken over by the Federal Reserve Act. In its first five years of existence the Federal Reserve allowed the United States government to spend more money for World War I than it had done in all the previous 130 years combined. This spending spree had the effect of making the Federal Reserve banking system an integral and inseparable component of modern American economy, and it accomplished this in a period of less than eight years.

This was the first step toward what became the roaring 20s. The government in conjunction with the Federal Reserve continued to expand the currency and the debt which caused the rapid rise of the stock market until it finally peaked in 1929. In the following three years there was a severe contraction of the debt. As this contraction of debt took place it led to a 90% devaluation of the equity market. These two economic events threw 25% of the populace out of work. This was The Great Depression.

It has been argued by many that World War II got America back on its feet. In actual fact it was the introduction of large scale electrical power generation and distribution built in the 1930s...The Hoover Dam, Grand Coulee Dam and a large number of coal fueled power plants that established a next wave of productive output to reset the growth pattern for the late 40s and early 50s.

The introduction of large scale digital technology and automation in the 1960s produced a second wave of expansion of production. With the introduction of these technologies, the average man's productivity increased by three times from the 1960s to 2000. These two technological factors are the only reason that there has been any growth after the Great Depression. But now our present money center bank has expanded the debt to overwhelm even these extremely powerful technological revolutions leading to our present financial crisis: The Great Depression of the 21st Century.

The Greatest Depression

We are now faced with the greatest depression the human race has ever seen because of this unholy collaboration between a destructive money center bank and powerful scientifically based technologies. We have one of two fates before us...either we follow the historical path but with greater adverse consequences as will be explained in the next segment or we can begin to aggressively implement next generation technologies that are waiting on the drawing boards to stabilize our local communities.

As for those who believe that the domino collapse our world is currently experiencing is the fulfillment of biblical prophecy. Perhaps this is so, but just as likely it is not. Throughout history empires and civilizations have been destroyed in the wake of the collapse of their financial systems. This included many Christian countries who also believed they were seeing biblical prophecy fulfilled, for example the Dutch Republic, the English Empire and even the United States as experienced in our own previous Great Depression.

As for our position, our aim is to do whatever is in our power to make a better place for our children through the use of the best achievements of mankind.

 

Part 3:  Contrast Between The Great Depression and Today