If you want to know how money is created or why rich get richer and poor get poorer, I explain everything about Financial Literacy and Money Creation in these series of posts. Please read all of them to grasp the idea of how monetary system of the world works.
Welcome to the second part of Financial Literacy series ( read the first part here). This part is about Central Banks and Specially Federal Reserve Bank of America, how they came to existence, who started them and what they did.
Money of The New Age ( Continued from the first part)
There are not many who remember the true money and its domination age. According to finance standards there are two types of money in the world; Gold And Silver. That’s why One and two dollar coins are like gold and smaller coins are like silver.
Money to be considered as money must have two characteristics, it must preserves its value through time and it must be tangible and unperishable. As we said in the previous post, paper money (which is called currency not money anymore) is a receipt for the Gold and Silver that is saved in the banks. People exchange these receipts because it’s easier and little by little they forget what the real money is and there is some amount of precious metal is saved somewhere for the receipt.
But this problem doesn’t end here. As technology comes into play and the internet starts to dominate the world, banking system and currency supply go into deep changes. By creating bank cards, the need to carry paper currency decreases everyday and banks control the money supply by electronic transferring more easily. That time is coming that our children don’t remember the paper money as we don’t remember the real money, gold and silver.
Money in the new age is not tangible. You pull out that plastic card and charge it. You really don’t care how much you spend in one transaction and it gets worse when credit card comes into play. The banks give you free money to spend and you look at the number in you credit account and unconsciously think that you have that money. Before you notice, you have spent it all and the interest on that credit eats you alive. In this way, bankers can steal your wealth without you even noticing. As Warren Buffett said:” If I can give you only one advice it’s that get rid of your credit cards”.
Your wealth is being rubbed under your nose and you think this is the necessity of the modern living. I hope people wake up sooner than later.
Central Banks And Their Origin
To know the history of central banks, it’s good to dig out some hidden parts of history of central and west Europe at around 1600-1900. This period of history is full of wars and revolutions and many people were killed and many kingdoms perished. What we want to discover is not that part of history, which is very well documented and by a simple search, it can be found in minute detail.
Focus of our post is mainly on finance and the bankers and financiers at those times. These are very well written but not many people know about them. People conception of those times is distorted by the myths and stories whereas they must rely on facts and truth. By the way, this post will show many of those facts and I’m pretty sure after finishing this post, you won’t look at many of the historic events and figures like before.
The Family Who Took Control Of The World
Many of you may have heard the name of Rothschild. This family is very famous among bankers and is one of the richest families ever lived. The story of this family is very interesting because it’s tangled with money and banks and the new world order. Story starts in Germany with Mayer Amschel Rothschild. He was the son of Amschel Moses Rothschild who was a money changer who had traded with the Prince of Hesse. Mayer developed a finance house and spread his empire by installing each of his five sons in the five main European financial centres.
The name Rothschild comes from the German word Rot Schild, meaning the red shield. This red shield was the sign of the family and later Mayer added 5 arrows showing his five sons. He send his five sins to five major cities in europe to start trading and financing. His sons were:
- Amschel Mayer Rothschild (1773–1855): Frankfurt, died childless, passed to sons of Salomon and Calmann
- Salomon Mayer Rothschild (1774–1855): Vienna
- Nathan Mayer Rothschild (1777–1836): London
- Calmann Mayer Rothschild (1788–1855): Naples
- Jakob Mayer Rothschild (1792–1868): Paris
These five cities were the centres of trade at that time and Mayer appointed his sons to these five cities to gain control of the trade and starts a powerful network of banking system. Among the sons, probably Nathan is more famous and obviously more powerful and a genious when it comes to trade and finance. We talk about him a little because his story shows the real power of this family.
Nathan Mayer Rothschild and Controlling The Bank of England
He was born at 16 September 1777 and died at 28 July 1836. When he was 21 years old, he moved to Manchester and started trading textile and finance but, later he moved to London and started trading bills of exchange. He became very powerful and famous in London Stock Exchange and other traders looked into him with trust and certainty. This fame gave him a winning edge over others and he used this power to gain more control over the market.
Rothschild family had a very powerful tool that they used it the most. In those times there was no telephone or internet and the only way of communication was a messenger on a horse. Kings had this communication tool and Rothschild family had its own legions of messengers. Kings messengers couldn’t go further than their country’s borders but there was no borders for Rothschild’s messengers. Because Rothschild brothers were in all the countries and had power over the kings and queens so, their messengers could travel around Europe very easily. Traders in London Stock Exchange knew this and always trusted Nathan Rothschild news more than others.
It was the Napoleon war in Waterloo that proved this power. Nathan Helped Britain to prepare for war and help the British government to finance the war. On the other side, Jakob Mayer Rothschild helped Napoleon and financed his side of war. This was the true trade of the family. Fo them, there was no border or country as long as money and profit was concerned. They were financiers and whoever paid them more was their customer. London was waiting for the result of the Waterloo war and all the traders were waiting for Nathan Rothschild. Nathan’s messenger came one day earlier than king’s messenger and ….
Next morning Nathan went to the stock exchange with a very sad face and suddenly started to sell all of his shares. Everybody saw him selling and thought that Britain must have lost the war, so others started to sell their shares as well and the price of shares dropped dramatically. But for every seller there must be a buyer. When people started to sell like crazy, there were some new faces among traders who started to buy. These were Nathan’s agents and he put them among people and gave them money to buy whatever people sell. When the day was over, Nathan had bought all the England bonds and took control of the Bank of England. It was Mayer Amschel Rothschild who said:” Give me the control of the money supply of a country and I care not what puppet is the king” and it was Nathan, his son, who proved it right.