The Bitcoin Standard
In 1910, seven men held a secret meeting on Jekyll Island off the coast of Georgia. It’s estimated that those seven men represented one-sixth of the world’s wealth. Six were Americans representing J.P. Morgan, John D. Rockefeller, and the U.S. government. One was a European representing the Rothschilds and Warburgs.
In 1913, the U.S. Federal Reserve Bank was created as a direct result of that secret meeting.
Interestingly, the U.S. Federal Reserve Bank isn’t federal, there are no reserves, and it’s not a bank.
Those seven men – some American and some European – created this new entity, commonly referred to as “the Fed”, to take control of the banking system and the money supply of the United States.
American citizens were told that the Federal Reserve would provide a reserve of liquid assets and also allow for currency and credit to expand and contract with the movements of the U.S. economy. The Federal Reserve was created on December 23, 1913, when President Woodrow Wilson signed the Federal Reserve Act into law.
The Federal Reserve, as we know it today, has four general responsibilities:
- It conducts the nation’s monetary policy by influencing money and credit conditions in the economy. In other words, the Fed changes money and credit conditions in order to get as close to full employment and stable prices as possible.
- It supervises and regulates banks and other important financial institutions to protect the nation’s financial health and (supposedly) the credit rights of consumers like you and me.
- It maintains the stability of the financial system and contains any types of systemic risk that arises. (Think: fixing extremely low interest rates during the recession.)
- It provides financial services to the U.S. government, U.S. financial institutions, and foreign official institutions.
From my point of view, however, the Fed only has two powers: to create money out of thin air and to lend money they do not have.
As a side note, it’s again important to remember that the Fed is not federal, has no reserves, and is not a bank. Yet, as I’ve already explained, the Fed has the power to control the money supply of the United States.
The Feds run the game.
Bretton Woods and the Downfall of World Banking
In 1944, just as World War II was about to end, a meeting of international banking leaders was held at a resort in Bretton Woods, New Hampshire—the United Nations Monetary and Financial Conference.
The conference resulted in the creation of the International Monetary Fund (IMF) and the World Bank.
While popular perception is that these two agencies were created for the good of the world, they have actually resulted in a lot of harm—at the forefront of which is the spread of the fiat monetary system throughout the world.
The Bretton Woods Agreement basically required world governments to copy the Federal Reserve System. Today most central banks, such as the Bank of Japan and the European Central Bank, are modeled after the Fed.
In 1944, the U.S. dollar became the reserve currency of the world. This meant that the world’s central banks put the U.S. dollar in their banks just as Americans put dollars in their savings. Things were fine as long as the U.S. dollar was backed by gold. Rather than hold gold, central banks held the dollar and U.S. bonds as real money.
In 1971, as you’ll learn more about in a bit, the dollar was severed from gold and the IMF and the World Bank required the rest of the world to separate from the gold standard or be excluded from their ‘club.’
Today’s global crisis has spread because the world economy is floating on Monopoly® money.
The dollar is no longer real money. It’s just debt. The world is now based on a fiat currency system that is backed by nothing other than the “good faith and credit of the United States.”
This has led to the wild economic swings we’ve seen over the last few decades—and the swings will only get worse.
Centralized banking has a monopoly on providing the currency, and on transferring the currency, internationally. Those two things must be done through central banking…that is until Bitcoin came along and offered the one and only alternative.
Challenges to Mandrake’s Money Show
If you’ve read my book Fake: Fake Money, Fake Teachers, Fake Assets, then you are familiar with what I called the “Mandrake System of Magic Money,” named after a comic-strip magician named Mandrake. Mandrake could pull anything out of his hat, just like the Fed can print money out of thin air.
In 2009, when Bitcoin appeared it began the challenge to Mandrake’s Magical Money show.
Mandrake does not like competition. The architects and controlling elite (basically the real Mandrakes) will fight back against cyber money, the people’s money.One giant advantage of cryptocurrencies and blockchain technologies is trust and security outside the banking system.
As Bitcoin rises in popularity, the power of the banking system— Mandrake’s Magical Money Show—will lose its grip on the financial freedom of the world.
Many cryptocurrency miners and developers are driven by an intense desire, a passion (and in some cases a hatred) to bring down Mandrake’s Magical Money Show and the invisible leaders or “controlling elite”.
The central banks are not elected by the people and do not have to answer to the people. That is why gold and Bitcoin are a threat to central bankers.
Bitcoin is the “gold standard” for cryptocurrencies. Bitcoin is a threat to those who print fake money.
The Fed and Bitcoin miners have a lot in common. Both manufacture money. That is why cryptocurrencies are a threat to the Central Bank monopoly on fake money. But, cryptocurrencies are less fake than the fake, government money we already use.
While I am not an expert on cryptocurrencies, I do understand that blockchain technology is the real technology. Blockchain technology is more trustworthy than human beings. Money is dependent upon trust, so I trust blockchain technology more than I do human beings.
Blockchain technology will change the world because blockchain technology is more trustworthy than government money.
I prefer gold and silver (God’s money) for the same reason. Gold and silver are far more trustworthy than the people running our governments, banks, and pension funds.
If you’re seeking new and exciting opportunities to achieve your financial dreams, then the world of cryptocurrencies might be a great platform for you to explore.
Just know that the future of this marketplace is entirely unpredictable and prices are fluctuating daily. It’s the people versus the government and the controlling elite, so before you jump in, get educated.
As Benjamin Franklin once said, “An investment in knowledge pays the best interest.” As with any investment, do your research and make sure you’re educated before you plunk down your hard-earned money.
Editor, Rich Dad Poor Dad Daily