Skeptic Project

Some of you may know I'm doing my master's program in U.S. history, specifically the history of the early republic.

I found this today in a book called "The Market Revolution," by Charles Sellers, regarding early banks (circa 1815):

Banks' contribution to the takeoff of a capital-hungry economy can hardly be exaggerated. most obviously, they pooled the limited capital available to it could be rationally allocated to the most productive purposes. But banks did much more. For the first time they provided, in place of chronically fugitive gold and silver coin, an ample circulating medium that made possible a new standard of punctuality in meeting business obligations. If banks did not, according to classical theory, actually increase the amount of real capital, they did increase the velocity with which money flowed from hadn to hand and widen capital's availability.

Banks did all this by transcending the innocence of an age that regarded only gold and silver coin as real money. Only such 'specie,' guaranteed by its magical aura and inherent commodity value as a precious metal, was 'legal tender' that a creditor had to accept in discharge of debt. Theoretically banks raised their capital by selling stock for specie and made their handsome profits by lending at interest the capital thus raised. Actually, instead of lending borrowers coin, they lent bank notes, or engraved certificates in varying denominations carrying a promise that the issuing bank would redeem them in specie upon demand at its counter.

So long as the public had confidence in a bank's soundness (ultimately the soundness of its loans), these bank notes circulated freely as the community's everyday form of money. And so long as public confidence was maintained, the bank could lend out far more than the actual specie in its vaults.

These are private banks who did this, not the evil gubbermint.

Curious then: we have not the Fed coming up with "fiat currency," but private citizens. They're doing it to benefit their own local communities, not rich capitalists, and not in 1913, as CTs, Paultards, Zeitgeisters and the Austrians would have us believe, but at least a hundred years before.

Did the NWO get to the author of this book and threaten him into spreading lies about the origin of the banking system? Or am I just a poop-throwing monkey who doesn't understand the realities of finance? You decide.

You just don't understand Muertos. They control everything you read, education is an inside job!

For some reason gold obsessives never discuss the Price Revolution in Europe several centuries ago, when gold lost about five-sixths of its purchasing power:

http://en.wikipedia.org/wiki/Price_revolution</p>

And this happened well before central banks, strong national governments and fiat money.

The invention of paper money shows man's ingenuity in devising a cheap substitute for a scarce resource, in this case, a crippling scarcity of the element gold. If someone could do something similar for, say, rare earth metals, libertarians, Austrian economists, Matt Ridley, etc., would hail the inventor as a hero.