We became bipedal monkeys around 7 million years ago. 3 million years ago, while in the African Rift Valley, we became intelligent, and when ocean levels allowed it, we migrated to Eurasia. 5 thousand years ago, writing developed and religion started being used as a control tool by autocratic demagogues. Military rule then followed with the Roman empire era. 2 thousand years ago, religious rule replaced military rule as the Roman empire’s military infrastructure was handed over to a religious group inspired by the teachings of Apollonius. Thereafter, the papist rulers’ intolerant and cruel ways, in direct conflict with the moral standards of Apollonius, were such that Jews and Huguenots (French protestants) suffered unspeakable atrocities. As time went on, these two persecuted groups were ever more determined to destroy the political and financial institution known as the Church of Rome. In 1600, they joined forces in a protestant and independent Amsterdam, and created the East India Company. They ruled the oceans of the world out of Amsterdam while they waited for an opportunity to establish their permanent headquarters in England, a country that still had papist kings in spite of Henry VIII’s shenanigans back in 1535. The shareholders of the East India Company arranged a marriage between Mary and Billy in 1677, and in 1688 sent the couple to England to wear the crown of a protestant constitutional monarchy. When the Bank of England was created in 1694, true democracy was born. But what is democracy?
For thousands of years, when Jews lent money to princes and kings, instead of being repaid, they were often despoiled, exiled or massacred, and as for the French protestant entrepreneurs, for hundreds of years, they weren’t allowed to carry on business for profit, and were often persecuted and even massacred by the country’s anointed king if they didn’t follow the dictates of the Church of Rome. With the creation of the Bank of England, the East India Company shareholders were now owners of the only institution allowed to lend money to the English Parliament. When parliamentarians wanted to get re-elected or launch projects, they had to go to the Bank of England for financing, for it was the only institution in the country allowed to print or coin money. If successful, the parliamentarians then collected the taxes in order to pay back the loans. For the first time in history, bankers were sure of being repaid in a just and timely manner. However, though people were free to vote for their representative and though that representative was free to try to get his projects underway, it was the bankers of the Bank of England who had the last word in who got elected and what was to be financed. That arrangement between a free voting people and private bankers would serve as a template for all democracies to come.
But all was not perfect, for the B of E was made up of dozens of bankers who were not entirely objective and devoid of greed and one-upmanship. They were mainly concerned with their own self-interest as English merchants. Fortunately, that’s when the greatest man who ever lived came along and started a bank in America. Mayer’s goal was to eventually establish a paper currency that could be used by all trading partners, and he accomplished this in total anonymity. The idea was to accumulate all the gold available in one place and use it to back up a currency that would become a world reserve currency for all future central banks. The gold would remain in one big pile for eternity. In time, the US paper dollar backed by this mountain of gold would displace the UK pound as a world currency and become as good as gold.
The first big chunk of gold bullion came from France when, in 1776, thanks to Benjamin Franklin’s genius as a diplomat, the French king sent around 500 tons of gold to help the American cause. It was enough gold to allow Robert Morris to create Mayer’s first bank in Philadelphia. In 1789, thanks to the most prodigious and humane real estate coup ever perpetrated, Mayer accumulated another 5000 tons of French gold, and stored it in the City. Since there was only around 15000 tons of gold bullion in the whole wide world at the time, this was enough gold to make his banker son in the City more powerful than all the other B of E bankers combined. In 1810, Mayer’s son, Nathan, controlled the monetary systems of the USA, the UK, and of all the countries that traded in those currencies. However, if more central banks or democracies were to be created, he needed to accumulate more gold. In 1812, Nathan sent Napoleon to Moscow in order to force the tsar to open his country to gold mining by private companies. In a very short period of time, thousands of tons of alluvial gold made its way to the City. Napoleon and the Tsar were paid handsomely in paper pounds while Nathan got the gold.
In 1863, a national banking system was established in the USA with the US dollar as its official currency, and in 1913, the US dollar became a world currency when the Federal Reserve Board was created. As of that moment, Mayer’s dynasty working out of the City in London controlled two major world currencies. In 1914, it had the wherewithal to get rid of all the ancien regimes of the world, what was left of the Holy Germanic Empire, along with the Ottoman Empire, China, Japan, India and Russia. WWI was a first attempt in getting it done. But because the task was so gigantic, it only succeeded partially and Mayer’s dynasty in the City had to repeat the process in 1939. In the meantime, in 1929, it got rid of the English pound as a major world currency, for dealing in two major currencies was counterproductive, and the US dollar was much more popular. WWII proved to be a total success when, in 1944, all the countries of the world gathered in Bretton Woods and signed an agreement whereby they accepted the US dollar as a world reserve currency. The US dollar was now as good as gold worldwide, and all the central banks of the world were now under one roof, so to speak.
Thanks to the gold mined in Russia, South Africa and in other parts of the world, perhaps as much as 200000 tons of the 250000 tons of gold ever mined lie today intact in one place, probably somewhere on the wharf in the City, in London. The US dollar has become as good as gold, we live in the best of all possible worlds, one where world wars are a thing of the past and credit is accessible to all. Meanwhile, we have inherited a world of leisure for which we are not genetically programmed. That is why, if we want to lead fulfilled and happy lives, it is imperative to understand how we got here. This blog is meant to help the willing reader in this endeavor.