A Short History of Money

Well the shell game is over, every economy loans out more than it has and can usually get away with it ( up to 7 times its worth - assuming consumer confidence is "normal"). This is the history of money. Long a go the Pharaohs learned that they can store their citizen's grain in their silos, write them a receipt and then the people could use those receipts to go to the market and buy other goods with these "notes" from the Pharaoh's silo or "treasury" . If one Surf had 100 bushels of grain in the silo (bank) and wanted to buy some lamb chops for dinner he simply wrote a note to the merchant instructing the silo to give the merchant 2 bushels of his grain on demand and hence the transaction was completed. Likewise the butcher need some pistachios for a snack, so he went to the corner store and bought a bag and a Slurpee, took his receipt, showed it to the clerk and wrote him another receipt for .25 bushels of grain payable on demand. This a short history of money!

Now the foreman at the silo after a year realized that nobody was coming for all their grain, and he had 1,000 bushels! So one day someone asked him for a loan of 1,500 bushels of grain. The manager knew that he could make this loan since nobody would come for the 1,000 bushels all at once; and the merchants in the market would take his note and promise to repay as acceptable currency. So the foreman wrote the borrower a note for 1,500 bushels of grain (plus interest), thus the first fractional banking system was birthed.

By the way the founding fathers warned against such practices because they new the inherit problems and risks with these schemes and how "nobody beats Vegas". It's always a matter of time when the 7 to 1 ratio gets out of kilter because nobody is aware of how these deals are being leveraged on the sidelines and next thing you know - you have a bank or government that has loaned or or borrowed well beyond what it is ever able to repay...is the plot thickening? Is this getting close to home?

We all remember the holiday classic It's a Wonderful Life, a run on the bank or a run on the government is very possible. Only the complexity of the economy is beyond any super-computer's ability to call a "time-out" and get everyone on the same page to work through this as a team. In fact the US has been over extending herself for about 40 years since LBJ's Great Society and robbing Peter to pay Paul, taking real wealth out of our social security funds and replacing it with T-bills (we know them today as junk bonds). Since the economy was so huge, and the borrowers of the world weren't keen to the balance sheet of the US...they have gotten away with it and thought they had an unlimited supply of the green stuff. Imagine grown men and woman living in this self-deception? The pigs kept going back to the trough time and time again. When the big spenders controlled congress, the other guys said "well we're going to get ours too!" And slowly over 40 years the mega giant economy was being devoured from the inside out.

Only now, the curtains have been pulled back, the treasury has loaned out well beyond 7 times its worth - and we might have a run on the bank soon.Everyone in the world knows it, but they are still hanging on because once this giant falls, so goes the rest of the world, but the day of reckoning is coming when the books will have to be opened and countries will have to re-index their currencies and wealth. What will this world look like after the great shake-out? This is indeed government out of control, when I was a young man in government class they told us that "only" irresponsible governments go BK...guess what!

What correlation can we see between the period of the 1960's and today? Prayer taken out of school, the viral assault on God in the public square, a country that has turned her back on His principles. I remember in the 1970's it was against the law for a man to rent an apartment with a woman if they weren't married, stores were closed on the Sabbath, believers and non-believers alike went to church, even the criminal element of society knew that they were to stand before the great and terrible day of judgment. What else? Abortion - we have far surpassed Hitler in murdering our own, we are promoting drug abuse, fornication, homosexuality, why should God bless this nation? As recent as the 80's when a television station would break for a station announcement they would say something like "blessed is the nation whose God is the Lord" KOOL TV. Try getting away with that today. You will have the .01% of mouthy atheists screaming bloody murder and the 98% lazy S.O.B professing Christians doing nothing!  All that is necessary for evil to prevail is for good men to do nothing.