After World War 2, it was no surprise the welfare state emerged and, with it, a whole load of new money distribution schemes. Setting the scene, there had just been a major war, and the people of the UK were weary. After all, what had they got out of it? There had to be something back in return for their sacrifices, didn’t there? That was what led to the ousting of Prime Minister Winston Churchill and the installation of a new Labour PM, Clement Atlee, in 1945.
“An Inspector Calls” is a 1945 play by J.B. Priestley, but based in Edwardian England, around 1910. There’s a poignant scene in which a poor commoner goes to the local poor council to ask for needed funds as she has lost her job and is pregnant. The unpleasant Mrs Birling, the wife of a well-to-do local industrialist, sits on the council and decides that this woman is undeserving of help, totally on her own personal whims. The woman dies later. Or does she? If you’ve not seen this play or film dramatisation, it is highly recommended. Priestley presented this scene to support the introduction of a more socialist regime in the UK. Espousing free universal healthcare, regardless of circumstances.
Once governments got you used to the concept of using just one currency in your everyday transactions and got you used to the trust that they were looking after your gold – they began loaning it out and selling it off, often without your knowledge or consent.
(Chart: source: Wikipedia By Tsange – CC BY-SA 4.0)
Looking at the chart, it’s easy to see the UK gold reserves have declined massively, especially in the 1960s – leading to the famous ‘Pound in your Pocket’ speech by Prime Minister Harold Wilson in 1967, trying to assuage voters that their pound was still worth a pound, as the value plunged against other currencies. A pound of what, Harold? In 1999, the UK decided to sell off over half the nations’ remaining gold reserves, some 400 tonnes. At the time, gold was at the end of a major 20-year bear market, and the price was at an all-time low, a price last seen in the 1970s. The Bank of England, the custodian of the countries’ gold reserves, insists that it was never consulted in the decision, and some leaks, in fact, suggest that many of their staff vigorously opposed the move. They claim that Her Majesty’s Treasury and them alone made the decision. At the time, the Chancellor of the Exchequer was a Mr. Gordon “Golden” Brown, who subsequently became Prime Minister.
Even worse, the huge gold sales and auctions were publicly announced well in advance, thus giving gold dealers the chance to prepare for the glut of gold that was about to be released onto the market, and force the price down still further as a result. The normal strategy is to keep intended government gold sales quiet, then simply conduct the sales on the open market, obtaining the best prices possible, then announce the results afterward.
Why might a government decide to sell off one of the main assets of its people at the lowest price possible? There were rumours and accusations that the gold was sold to prevent top Hedge Funds who had got it wrong gambling on the price of gold from going bust and destroying the worldwide economy, among others.
Regardless of the truth of the rumours, 1999-2002 has subsequently been proved to have been exactly the right time to start buying gold, not selling it; in fact, the value of the gold sold by the UK has risen by over ten billion dollars since that time. This period in gold price history is now referred to as ‘The Brown Bottom.’
While the owning of gold was illegal for US citizens from 1933, the USA sat atop international trade after World War 2, allowing gold convertibility at the same price of 35 dollars an ounce for other nations. This was called the ‘Bretton Woods’ agreement, referring to the location where it was signed. However, partly due to the cost of paying for the Vietnam War, the number of dollars in circulation began rising in the 1950s and 1960s. Nations like France and West Germany seized their chance to exchange their devaluing dollars for the real thing, gold at $35 an ounce. In 1971, the window for exchanging gold was officially closed.
As the current empire, the USA began 1900 with a strong, growing country, an economic powerhouse destined to lead the world, and best of all, their currency was all denominated in gold and silver.
The USA removed its link in gradual phases, but several major milestones stand out in history. The first of these was the creation of the Federal Reserve, in 1913, just before World War One, handing control of the US national currency to private banking interests. To emphasise the importance of this, remember Amschel Rothschild’s quote :-
“Give me control of a nation’s money, and I care not who makes the laws.”
― Amschel Rothschild
James Corbett’s superb “Century of Enslavement – History of the Federal Reserve” video and podcast documentary is highly recommended for the full history of how that happened.
In 2020 during the Corona crisis, the USA simply reduced the reserve lending requirement to zero, giving banks the power to issue new money with interest added, without any savings in the bank to back it up. The media response in reporting this incredible, never-seen-before, financial act?
Zilch.
Well, virtually zilch. that was the only mainstream clip I found mentioning it.
There were many great rich cities along the Silk Road that are now just ruined, with little left of their tales of immense wealth. Merv in Iran, for example, had perhaps 500,000 people there at its peak, was a major centre of learning, and is now just a raised shell in a desert. The point is, people and wealth move, civilisation and empire grows, lives, and dies. It is never fixed, and it definitely never stays the same forever.
Whatever may be said about Donald Trump, he is absolutely right to lament the one-sided trade deal with Japan.
For some reason, a load of your elected representatives (if you’re in the USA, but whatever country you are in, they are probably undertaking similar schemes and hoping you don’t notice), decided back in the late 1940s to gift Japan unfettered access to American markets, while simultaneously granting Japan the right to impose massive protective tariffs on the same types of goods travelling in the opposite direction. No wonder Japan was able to rise from defeated island nation to a huge superpower, where the imperial palace grounds in Tokyo were worth more than the whole of New York by the 1980s.
To give you an example of how that paper you have in your wallet, or digital bits on your banking homepage screen have become distended from the real money it once represented, just think of this – A British Pound Sterling was once worth exactly what the words say – A pound in weight of Sterling silver. As of the end of August 2020, the same pound of sterling silver is valued at £282, or $376. That is 0.0035% of its original value.
In 2006-07, originally as a hobby project, I wrote my first book, imaginatively entitled “How to Invest in Gold and Silver.” It was meant just to be a self-published work, distributed to a few friends and relatives, no further than that. However, in late 2007 and early 2008, strange things began to occur in world financial markets again, culminating with the BBC showing footage of people queueing outside Northern Rock, a UK-based bank, patiently waiting their turn to withdraw their savings from the bank in cash. These scenes looked exactly like something being replayed from history, familiar, common even. They were well-documented from a 1907 financial crisis in the USA when the imaginatively-named Knickerbocker Trust got into trouble, and history books tell us decisive action by the financier James Pierpont (J.P.) Morgan saved the day and more commonly-known, the 1930s in the aftermath of the 1929 Wall Street Crash. Only, whereas the BBC was subtly mocking them as fools and playing lots of footage of experts saying they were silly to worry, history showed something written in the book.
Fractional Reserve Banking is responsible for something we all nowadays take as a positive thing because it means we get a day off work. Bank Holidays. The origin of bank holidays is historically based on banks taking a holiday from paying out to customers. They could tally the books during this holiday and ensure that they weren’t technically insolvent from having lent out too much money against deposits. The idea is that, if the bank was insolvent, they could call in a few favours during the day off and be in a position to continue the business, as usual, the next day of opening. If it sounds like something ancient, think again. The whole USA even had an eight-day bank holiday in 1933, after an emergency law was passed to stop more banks from going bust.
