Andrew Jackson Knew Bankers Ruined Families. Now Presidents Work for Bankers.
This Week in Money March 10–16
This Week In Money by Greg Coleridge helps you discover the history of economics:
MARCH 10
1933 — LAST DAY OF “BANK HOLIDAY” DECLARED BY PRESIDENT ROOSEVELT The “holiday” meant that all banks would be closed from March 6–10 to prevent further runs by depositors. Bank failures were a result of earlier speculative investments and banks loaning out more money than they actually possessed (called “fractional reserve banking”). When too many people came to a bank at the same time wanting their deposits, the banks collapsed since they lacked sufficient assets. The bank “holiday” was meant to restore confidence in the banking system. At the conclusion of the “holiday,” 5% of all banks were unfit to continue business, many others only were permitted to accept deposits, while others permitted only a certain percentage of deposits to be withdrawn. Slightly more than 50% of all banks reopened with no withdrawal restrictions. MARCH 11
2000 — DOTCOM BUBBLE CRASH The combined value of stocks on the NASDAQ was at $6.71 trillion on March 10. The market began crashing the next day. By March 30, the NASDAQ was valued at $6.02 trillion. It dropped to $5.78 trillion by April 6. Nearly a trillion dollars worth of stock value had evaporated in less than a month. What goes boom eventually goes bust in an economy with private control of the money system.
MARCH 12
1685 — BIRTH OF GEORGE BERKELEY, ANGLICAN BISHOP OF CLOYNE IRELAND, PHILOSOPHER Berkeley wrote The Querest in 1735. It was written as questions, which suggested their own answers. On whether money has inherent value, he asked/wrote: “Whether money is to be considered as having an intrinsic value, or as being a commodity, a standard, a measure, or a pledge as is variously suggested by writers?” On the evolution of exchange and money, “Whether in the rude original society the first step was not the exchanging of commodities, the next a substitution of metals by weight as the common medium of circulation, after this the making use of coin, lastly a further refinement by the use of paper with proper marks and signatures? And whether as it is the last so it be not the greatest improvement? And whether money be not in truth tickets or tokens for conveying and recording such power, and whether it be of great consequence what materials the tickets are made of.”
2013 — “QUESTION FOR LIZ WARREN: HOW MANY SUBSIDIES DOES A ZOMBIE BANK NEED” PUBLISHED ARTICLE “[T]he Fed is currently subsidizing the cost of funds for the US banking industry to the tune of about $90 billion per quarter or $360 billion annually.” http://www.zerohedge.com/contributed/2013-03-12/question-liz-warren-how-many-subsidies-does-zombie-bank-need
2014 — “MONEY CREATION IN THE MODERN ECONOMY” — VIDEO POSTING Oxley, James. 2014. “Money creation in the modern economy — Quarterly Bulletin Article” In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood: the principle way is through commercial banks making loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money. https://www.youtube.com/watch?v=CvRAqR2pAgw
2022 — HOW TO SPEND A TRILLION DOLLARS: OUR MONETARY HARDWIRING, WHY IT MATTERS, AND WHAT WE SHOULD DO ABOUT IT” — Harvard Public Law Working Paper “A particular kind of hardwiring characterizes capitalism. That system amounts to the governing (constitutive) determination that the public medium of the economy — money — should be created by banks, predominantly banks operating for private profit. The determination is strange, indeed sui generis [unique], because governments can make money without any financial intermediary or involvement. Despite its anomalous nature, the banked design for creating the money supply has gone viral in the last three centuries. During that time, it has determined the way both private and public spending happens.” https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4056241 MARCH 13
1943 — DEATH OF J.P MORGAN, JR, BANKER JP (Jack) Morgan was the son and grandson of bankers who headed J.P. Morgan & Co., one of the most powerful banks in the nation. He struck a deal with the British and French governments to be the sole munitions and supplies purchaser during World War I, which earned the bank $30 million. The bank was so heavily tied to the British and French governments that it was charged Morgan politically pressured the US government to enter the war against Germany in order to rescue its loans.
MARCH 14
1782 — BIRTH OF THOMAS BENTON, US SENATOR, MISSOURI “I object to the renewal of the charter of the Bank of the United States because I look upon the bank as an institution too great and powerful to be tolerated in a government of free and equal laws. Its power is that of the purse, a power more potent than that of the sword, and this power it possesses to a degree and extent that will enable this bank to draw to it too much of the political power of this Union, and too much of the individual property of the citizens of these States. The money power of the bank is both direct and indirect.”
1881 — INAUGURAL ADDRESS OF PRESIDENT JAMES GARFIELD “The chief duty of the National Government in connection with the currency of the country is to coin money and declare its value.” [Note: “coin” is a verb here, not a noun. Garfield was a Republican].
1900 — US GOLD STANDARD ACT APPROVED The law established gold as the only metal standard for redeeming paper money. Banks wanted to maintain control of the money supply. President William McKinley (from Canton, Ohio), strongly backed by the nation’s major corporations, signed the Act. Whether gold and/or silver, backing money with metal moved the nation further away from the Greenbacks, the debt- and interest-free currency issued as credit, by the Lincoln administration.
2014 — “MONEY CREATION IN THE MODERN ECONOMY” Bank of England, Quarterly Bulletin, 2014, Q1 “In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood: the principal way is through commercial banks making loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.” https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy
MARCH 15
1767 — BIRTH OF ANDREW JACKSON, SEVENTH PRESIDENT OF THE UNITED STATES “I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. You tell me that if I take the deposits from the Bank and annul its charter, I shall ruin ten thousand families. That may be a true, gentleman, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out and, by the Eternal, I will rout you out.” 1834 Jackson successfully opposed re-chartering the private “Second Bank of the United States.” He vetoed a bill in 1832 renewing the bank’s charter (license).
1985 — OHIO GOVERNOR DICK CELESTE DECLARES S&L “HOLIDAY” Cincinnati, Ohio based Home State Savings Bank, a Savings & Loan, was about to collapse in March 1985 over its shady operations. As depositors lined up to withdraw their savings in a classic “run” on the bank’s branches, Celeste declared a bank “holiday.” He ordered all Savings & Loans closed in an attempt to stem the panic. Only those that were able to qualify for membership in the Federal Deposit Insurance Corporation were allowed to reopen. Claims by Ohio S&L depositors drained the state’s deposit insurance funds.
2003 — QUOTE BY CHRISTOPHER MARK, AUTHOR OF THE GRAND DECEPTION: THE THEFT OF AMERICA AND THE WORLD, PART III “Welcome to the world of the International Banker, who like the famous film, The Wizard of Oz, stands behind the curtain of orchestrated national and international policymakers and so-called elected leaders.”
2023 — “THE NEXT FINANCIAL CRISIS IS AROUND THE CORNER?” ONLINE ARTICLE BY GOVERT SCHULLER “We know that the current monetary system is crisis-prone. We know that during the last big crisis in 2008 we skirted a total freeze-up and a possible break-down of the international banking system. We know that Wall Street was bailed-out and Main Street left to fend for itself. We know the system received some band-aids and was not re-set on a sound footing. And now we see another series of big booms and possible big busts, starting with the implosion of crypto-giant FTX in November 2022 and recently the bankruptcy of SVB… “In the six years after the 2008/9 Global Financial Crisis (GFC) the monetary reform movement has attained far-reaching results in promoting breakthrough monetary theories, especially the credit creation theory of money and banking, and in proposing reform policies based on empirical findings and computer models… “Our ideas are still spreading and are picked up in many countries to the extent that monetary reform organizations have been started. Even so, main stream economists, politicians and policy think tanks are resisting our findings or stay blissfully ignorant of them. Hopefully this half-panic around SVB’s downfall will create questions about the current crisis-prone, unsustainable monetary system and awaken the vision that a more stable, more equitable and less indebted system is possible.” https://www.alpheus.org/the-next-financial-crisis-is-around-the-corner/?fbclid=IwAR3NcpdJS7roBZGZiYxqQXzFboUgdz8I5ooAVCDClktrH045KUw0omlsPkE
MARCH 16
1938 — HOUSE RESOLUTION (HR) 7230 INTRODUCED John William Wright Patman, Democratic Congressman 1938–1978 and Chairman, Committee on Banking & Currency, introduces a bill to nationalize the Federal Reserve System. “The Federal Reserve is a total moneymaking machine. It can issue money or checks, and it never has a problem of making its checks good, because it can obtain the $5 or $10 bills necessary to cover its check simply by asking the Treasury Department’s Bureau of Engraving to print them.” 1964
2008 — BEAR STEARNS FINANCIAL CORPORATION ACQUIRED BY JP MORGAN FINANCIAL CORPORATION Bear Stearns financial corporation is acquired for $2 a share by JPMorgan Chase Corporation in a fire sale avoiding bankruptcy. The deal was backed by the Federal Reserve, which provided up to $30 billion to cover possible bank losses. Bear Stearns was a global institution that invested heavily in subprime loans. Its failure was one piece of the financial crisis and Great Recession. [Note: The Fed is at it again. This week, it injected $1.5 trillion into the financial system — offering dirt-cheap overnight lending loans to banking corporations to keep it supposedly from blowing up. The problem is the whole financial system is a ponzi scheme based on creating money as debt forever and ever]
2013 — YOUTUBE UPLOAD OF TALK BY BEPPE GRILLO ON MONEY AND DEMOCRACY Grillo is head of the “5 Star Movement” in Italy — a left-wing populist movement seeking political power. This guy understands money and how to democratize its creation and distribution. “Whom does the money belong to? Who does its ownership belong to? To the State, fine, so to us, we are the State… “You know that the State doesn’t exist, it is only a legal entity. We are the state, the money is ours… “Then tell me one thing: if the money belongs to us, why do they lend it to us?” https://www.youtube.com/watch?feature=youtu.be&v=lB-3AbChKa8&app=desktop
2013 — “MONEY, DEMOCRACY AND THE CONSTITUTION: REVOLUTIONARY EXPERIENCE IN THE UNITED STATES” video posting “This seminar explores the relationship between money and the legal formation of the modern liberal capitalist state, with a particular emphasis on the pre-Revolutionary and early United States. In contrast to conventional economic narratives that cast money as lubrication for existing forms of exchange, this event highlights the legal and political origins of our modern monetary system, and traces the influence of those forces on the shape of the modern economy. “Questions to be addressed include: “How are monetary systems shaped by constitutional processes? “How was the United States monetary system affected by the revolution and drafting of the U.S. Constitution? “What impact does the legal structure of money have on the character of an economy? “What insights do historical revolutionary debates about money provide on current economic problems?” https://www.youtube.com/watch?v=1dFF5Qsg7mM
2016 — DUTCH PARLIAMENT ADOPTS MOTIONS TO INVESTIGATE MONEY CREATION “On March 16th, the Dutch Parliament’s plenary assembly discussed the possibility of transitioning towards a sovereign monetary system and adopted two motions committing the government to carry out further research. “About one year ago, more than 100,000 Dutch people signed a citizens’ initiative to make state issued digital cash into the political agenda of the Dutch Parliament. This success was the result of a fruitful cooperation between our sister organisation Ons Geld (translated ‘Our Money’) and a theatre group called ‘The Seducers (De Verleiders) which showed a play called “Taken by the bank“ which explains money creation… “[T]he initiative was debated at the House during a three hours plenary session on March 16th. The financial crisis has shown that leaving the creation of money to commercial financial institutions from lending leads to an unstable financial system. ‘The financial system is like a house of cards about to collapse,’ said spokesman for Our Money George van Houts.” http://positivemoney.org/2016/03/dutch-parliament-adopts-motion-to-investigate-money-creation/
This Week In Money by Greg Coleridge helps you discover the history of economics. Get TWIM delivered directly to your email inbox for free.
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