You’ve likely never heard, “Follow the Coal”, or “Follow the Oil”, and certainly not, “Follow the Solar”.
The single most important unit of energy is no longer natural resource based.
People have come to think of energy as oil, or coal, or even a unit of electrical power. It’s not. It’s money. More importantly, it’s currency – the printed reflection of energy, and power.
It is my intent to demonstrate to the reader how people came to know that there was no better business than that of the production, and distribution of currencies.
Please remember a few things from the outset:
After we went off the gold standard, currencies no longer were tied to anything tangible. The value of currencies became intrinsic only to the thoughts, and goals of a small set of people, who are, by any definition, the One Percent of the One Percent.
When currencies are not tied to something tangible, there are no factors limiting the supply of currencies. Poverty, or deteriorating infrastructures that fail, or fall down, and kill people are conditions artificially created, and maintained, by the individuals making the decisions to limit supply.
Also, please remember that prior to there being energy sources any more sophisticated than wood, there have been people attempting to identify a commodity involved in the majority of everyday transactions. Until about 1973, it was some form of natural resource based energies.
The only commodity that fills that criteria now is currency. Is there any business capable of being more influential, and profitable, than the business of currency production, and distribution?
Should there be a nineteen to twenty-one member unelected Board of Directors, possessing a dictatorial influence over every democracy on this planet?
Trading could, during the early days, involve sheep, goats, cattle, grains, and dried fruits. All, however, required a specialization in the production, or transport of those commodities.
If, however, you were a trader of goods over large distances, ideal products would have been light weight, and extremely valuable, such as spices, and silks. These products were of such substantial value that routes involved with their trades were named for them. Valuable trading was accomplished at points along these routes, but the most valuable commodities were sold at the ends of the what were known as the spice route, and the silk road.
The traders that traveled the entire length of the roads found difficulties with excepting commodities that were either weighty, or alive. They had neither the ability, nor inclination to tend to livestock, haul grains, or accept perishable commodities in exchange for the products they carried.
Traders traveling these roads also had to contend with thieves. It was far easier for raiding thieves to drive livestock away from their trader owners, or attack a slow moving caravan carrying grains. It would be easier to defend oneself from thieves, if the valuables they sought to defend could be kept in close proximity to well armed, and defensively capable men.
These troubles gave rise to the willingness of traders to accept valuable metals, and soon thereafter, valuable metals stamped into the form of coin in exchange for their goods. Stamped coins diminished speculation about what other commodities would be marketable, upon completion of the routes.
As soon as stamped coins became prevalent, we have the rise of the money changers. Money changers would, as all traders, or brokers do today, suggest that one form of coin had, for any number of reasons, including introducing deceitful rumor, changed in value. A trader arriving back home might present to a money changer the coin from one nation in hopes of exchanging it for a coin with greater acceptance locally. Money changers would attempt to exchange the foreign coins for a local variety at significant profit. They could then attempt to sell the foreign coins to traders about to begin their journey back to the cities of the foreign coin’s origin.
The currency traders (money changers) remained in business for several centuries. It took this quantity of time to establish something akin to a bank. They were, in that time frame, more accurately referred to as depositories, where a trader could obtain some form of coinage easily negotiable throughout the trade routes. The administrations of any participating depository anywhere within the trading routes, would have to agree to honor an established value of the coinage, without concern as to its origin.
Some of these new style depositories organized themselves with attention to the silk road, and spice route traders. Each depository would recognize the quantity of coinage deposited, by a trader, within any of the participating depositories. If the client required access to coinage, he could withdraw a percentage from one of the participating depositories at the opposite ends of the silk road.
At this stage of world trading, there were far fewer people, and countries were often less stable. Gold could function as a common commodity to insure the value of any coinage at either end of any trading route. Merchants reselling the merchandise obtained from the silk road, or spice route traders could also perceive an acceptable level of safety. If the coinage possessed a weight sufficient to cover the face value of the coinage, country of origin was not significant. For several centuries, there wasn’t a perception of the need for a single currency covering vast geographical regions.
Move ahead several centuries, increase the population, as well as the volume of trading, or commerce world wide. The use of gold coinage no longer made sense, and for many reasons. The weight would be for too high, and risk of death through robbery became unacceptable. Currencies had to change form, but must provide the same degree of negotiability.
The beginning of the end of a gold based coinage, was the introduction of a paper form of currency. In the early stages of paper currencies, there needed to be some sort of guarantee of its value, so the U.S., for example, printed that guarantee right on the face of the paper note. Here is such an example:
I copied that guarantee off the note, and placed an enlarged copy of it below it. The practice was known as Fungibility. Fungibility is the property of a good, or a commodity whose individual units are capable of mutual substitution. Fungibility was, in fact, one of the reasons for the end of the gold standard. It was also the beginning of an oil embargo, in 1973.
The dollar had been pegged to the price of gold, and the dollar was the principal currency for the purchase of oil, even from countries other than the U.S.. Part of the newly formed OPEC decided to, instead, peg the price of oil to a quantity of gold. Although rarely found in any written account, OPEC had, as a result of the end of the Bretton Woods accord, briefly demanded payment in gold bullion. This, of course, would cause the U.S., and most industrialized nations to reduce their stocks of gold to make payment.
Since the dollar was pegged not only to the price of gold, the volume of dollars printed could be no greater than the quantity of gold possessed by the U.S. If any country was forced to pay for oil in gold bullion, there would have to be a reduction in the quantity of dollars allowed to exist. This situation would, quite naturally, be considered intolerable.
Ending the gold standard lead to anticipations that currency values might fluctuate unpredictably. The industrialized nations increased their reserves (by expanding their money supplies) in amounts far greater than before. The result was a depreciation of the dollar, and all other industrialized nations’ currencies. Even after OPEC had increased the cost of oil, the depreciated value of the dollar reduced OPEC nations buying power for all required goods. OPEC nations were left worse off, than if they had never attempted to use, what they referred to as , the “Oil Weapon”.
Please note how significant the coming change would be upon our society.
There have often been discussions of world changing inventions. Rated number one was the Gutenberg Printing Press. There were others such as the light bulb, and still others suggest the internet. If there has been any single practice that has, and will change the world, it is when the unit of energy changed from being natural resources based to standardized currencies based.
Note that as a result of the oil embargo, currencies were, for the first time, no longer tied to any tangible commodity. There has never been just a radical departure from previous economic models, or any previous form of monetary policies. The Arab countries had thought they held the unit of energy that could influence all transactions world wide. If they hadn’t decided to overplay their hand it may have stayed that way.
Power, and influence over all events could now begin to switch to the central bankers. They could, if they played their hand properly, evolve into the only source of what would become the most important unit of energy. If, during that evolution, they could reduce the number of standardized units of currencies, they could minimize the effort required to influence vast geographical regions. The Euro is that example. The organizations that came to exist, and fill that void, are what have come to be known as Central Banks.
When there are central banks, and that means plural, there must be a central bank for all central banks. That bank exists, and is known as the Bank for International Settlements.
This is where there is a nineteen to twenty-one member unelected Board of Directors, possessing a dictatorial influence over every democracy on this planet.
Who are the members of the Bank for International Settlements?
There are sixty member central banks, or monetary authorities of the countries listed below. Before I list the countries, I want to go into a bit of history of the bank.
All of the history I supply about the Bank For International Settlements is from Wikipedia. I do, however, wish to highlight portions of text in a different color, so that I can show some of the most important aspects of how, and who was involved in the creation of the bank, as well, as why is changed radically, from its original charter.
History of the Bank For International Settlements (From Wikipedia’s page):
The BIS was established on May 17, 1930, by an intergovernmental agreement by Germany, Belgium, France, the United Kingdom, Italy, Japan, the United States and Switzerland.
The BIS was originally intended to facilitate reparations imposed on Germany by the Treaty of Versailles after World War I. The need to establish a dedicated institution for this purpose was suggested in 1929 by the Young Committee, and was agreed to in August of that year at a conference at The Hague.
A charter for the bank was drafted at the International Bankers Conference at Baden-Baden in November, and its charter was adopted at a second Hague Conference on January 20, 1930. According to the charter, shares in the bank could be held by individuals and non-governmental entities. The BIS was constituted as having corporate existence in Switzerland on the basis of an agreement with Switzerland acting as headquarters state for the bank. It also enjoyed immunity in all the contracting states.
The evidence had been mounting throughout the war that the BIS had helped the Germans loot assets from occupied countries, including gold rings and other items from labor and prison camp victims. The most notorious incident was the Bank of England’s transfer to the BIS gold looted by the Nazis after their invasion of Czechoslovakia in 1939. The fact that top level German industrialists and advisors sat on the BIS board is ample evidence to understand how the BIS was used by Hitler throughout the war, with the help of American, British and French banks. Between 1933 and 1945 the BIS board of directors included Walther Funk, a prominent Nazi official, and Emil Puhl, as well as Hermann Schmitz, the director of IG Farben and Baron von Schroeder, the owner of the J.H. Stein Bank. The Bretton Woods Conference recommended the “liquidation of the Bank for International Settlements at the earliest possible moment”. This resulted in the BIS being the subject of a disagreement between the non-governmental U.S. and British delegations. The liquidation of the bank was supported by other European delegates, as well as the United States (including Harry Dexter White, Secretary of the Treasury, and Henry Morgenthau), but opposed by John Maynard Keynes, head of the British delegation.
Fearing that the BIS would be dissolved by President Franklin Delano Roosevelt, Keynes went to Morgenthau hoping to prevent the dissolution, or have it postponed, but the next day the dissolution of the BIS was approved. However, the liquidation of the bank was never actually undertaken. In April 1945, the new U.S. president Harry S. Truman and the British government suspended the dissolution, and the decision to liquidate the BIS was officially reversed in 1948. The BIS was originally owned by both governments and private individuals, but is now wholly owned by BIS members.
Chapter Three will be posted soon.