Modern Banking - fuelling the war machine
War seems to be an integral part of the human condition. As far back as we have recorded, it seems people have been waging war on each other virtually uninterrupted. It has gone through many iterations of modus, from sticks and rocks to bronze and obsidian tipped weapons, then iron and steel, and finally explosive weapons like rifles and artillery and rockets. Putting all this aside, one thing has remained the same. The motives.
Aztec Tecpatl Obsidian Knive
Before moving on, it must be at least acknowledged that the contents of recorded history is usually filled with extreme events such as war. Times of peace will not inspire the same levels of literature as times of war and violence. This may slant our impression of our warring tendencies. “History Is Written by the Victors” as they say, and there are no victors in peacetime.
Resource plunder, revenge, coercion, it all boils down to an expression of power that has reached its final method - violence. You won’t give me your stuff - then I will take it. You hurt my feelings - I will hurt you in return. You won't do as I wish - then I will force you. Once entering onto this path, one also enters onto a path of escalation.
War is expensive.
War requires weapons manufacture. This all costs money. It requires manpower. This costs a lot of money. It needs a motivated and trained army. Training costs money, and there is nothing that motivates more universally than money.
Throughout history leaders that have thought about embarking on wars, first met either with their treasurers, or their bankers. They all knew that their war would be won by the army that is best funded. Of course exceptions to this rule exist, but by and large, this rule rules the rules of war.
From the age of bronze till the end of WW2 the general rule applied: the side that ran out of money (resources) first, lost. So what changed in 1945?
There is 1945 and then there is 1971. A blink of an eye in the great arc of human history so we could treat them both as the same event: adoption of FIAT money.
(If you know all about FIAT money means then this next bit may bore you.)
FIAT is the Latin word for: to decree. When applied to money, it is a decree to centrally declare what is and what is not money.
Starting in 1945, the US embarked on its Pax Americana empire project. Following WW2, the British empire was decisively broken and a power vacuum existed. Power hates a vacuum so the US enthusiastically picking up the baton of empire.
The Bretton woods conference in 1944 resulted in virtually the whole world adopting moving from the classical gold standard to a proxy gold standard with the US dollar as the proxy. Countries would hold USD as reserves for their own currencies while the US would hold (all the) gold under the USD.
A risky leap of faith for most of the European countries broken by WW2.
There was a back door agreement though, whereby sovereigns could exchange their USD for the underlying gold at any time with the US treasury at a fixed exchange rate (US$35/oz).
Move ahead to the late 1960’s and the trust in the USD began to crumble during the US war in Vietnam. European nations now rebuilt following WW2 began to grow suspicious that the US was printing more money than their gold reserves should permit. A run on the US treasury began. Starting with France, more and more European countries demanded the US take back their USD and give them their gold back.
At first a trickle, but as with all bank runs, nobody wants to be last in line. The calls for claims on gold from the US treasury became a torrent which was stopped in August 1971, when Richard Nixon temporarily closed the ‘gold window’ mechanism.
From that moment on ALL money backed by USD become FIAT currency.
Suddenly, the USD became a weapon in of itself.
It was the looming problem of every nation except the US, where it became an exorbitant privilege. The US could print money and exchange it for hard goods and real services from all over the world with virtually no limit except the collective confidence of the rest of the world.
This privilege went to their heads! Since this fateful event in 1971, a truly astounding amount of USD has been created to fund all manner of things:
The space race
The computer revolution
Aid to nations both large and small
A truly monstrous military industrial complex
The internet
A media and cultural juggernaut
A plethora of both good and bad Non Governmental Organizations (NGO)
The flood of money went everywhere,
but most importantly it went toward empire and war.
The US has been able to lavishly fund those that would support it, and viciously impoverish those that had a more independent mindset. It would seek out places where resources it coveted were to be found, and either bent or smashed alone who happen to be living on top of them.
In all of history there has never been such a rapacious empire, and the one root cause was FIAT money. The ability to print money to fund whatever you wanted. Imagine a private person with such a privilege? A money printer in their basement. What would eventually become of this person and their descendants?
So an interesting question arises. What if the exorbitant privilege of the USD as the global reserve currency ends? What will come of the US?
We can only speculate on this because the complexity and extent of what this privilege has built up cannot be known by any one person. But one thing is for certain. The US would be forced to pull in much of its empirical Pax Americana. The sprawling multitude of military installations in foreign lands would invariably come to an end as the US would lose its ability to bribe those lands with its FIAT USD.
Would this lead to peace around the world? a little voice in my mind tells me: No.
The fall of the US dollar from its status of reserve currency does not equal the end of FIAT money. The exorbitant privilege genie is out of the lamp.
There is another interesting feature of our world well hidden from view. It is the real power money has created outside the confines of nation states. Vast pools of resources and money held in hidden hands. ‘The powers that be’, ‘the men behind the curtains’, ‘the banking cartel’, ‘the freemasons’, ‘the WEF’, ‘Bilderberg’, take your pick.
The name does not matter really, all that really matters is that they do exist.
In what form? a monolithic hierarchy with occult rituals, or just the rarified few that reach such heights they cannot but end up meeting and collaborating with each other?
The first one has captured the imagination of the masses, but it doesn't really matter. USD or YUAN, Fiat or not, they will remain at the top of the pile.
But there is something that scares them like kryptonite scares Superman.
Its Bitcoin.
Bitcoin will not destroy the money oligarchs of the world.
Just like kryptonite does not kill Superman outright, but it is a check on this unlimited power.
Likewise, if it emerges from its current nascent state, and expands to its true potential, Bitcoin is a force that will check the uncontrolled power of the money oligarchs of the world. They will face the one thing that they cannot control.
A money that cannot be conjured into existence on demand by fiat, a money that cannot be censored, cannot be confiscated, and can be used by everyone without permission or control. It really is like a digital representation of gold. The term Digital Gold comes surprisingly close to the mark.
This is not a call to go out and buy Bitcoin. You have to decide this for youself.
I only want to expose how fiat currency and modern banking has been rocket fuel for conflict and war in the last 70 years. Bitcoin removes much of the punch that money has to fuel conflicts around the world.
A few reasons why I think this:
A Country has to earn bitcoin through work. There is no way to conjure it like Fiat currency. So no more printer in the basement to infinitely fuel a war machine.
It's really hard to steal bitcoin. Invading a country will do no good to get at their bitcoins.
Anyone: individuals, organisations or nations can earn bitcoin by mining it without permission. Furthermore mining can be very portable and very decentralised.
With each miner in operation both big and small, the network becomes more robust and secure.
All the operations of the Bitcoin network are trapped not in a piece of SW, but rather in a protocol. Think of it as a language rather than a program. Speaking this language is the only requirement to participate in the network. The output of the language is the Bitcoin blockchain. All the rules of Bitcoin are trapped in this protocol (language). SW to run on the bitcoin network must comply with the protocol rules. The rules are rigid, publicly known and rather simple (in comparison with the opaque operations of our modern financial systems). So it matters not how a piece of SW is built, if it follows the rules, it will work.
Bitcoin is Pseudonymous. All bitcoin transactions are clearly visible on the Bitcoin blockchain forever. No hidden channels. Transactions cannot be altered once included in a block. The sender’s and recipient's identities are visible on the blockchain but they are represented as a public keys, which, if care is taken, cannot be connected to a person or entity. This means a machine can also hold and transact in bitcoin. Now that's a neat trick! Transparency and privacy together.
There will only ever be 21,000,000 bitcoins, although a bitcoin can be divided into 100,000,000 parts, so 2,100,000,000,000,000 (2.1 quadrillion!) units, or better know as sats, in ode to Satoshi Nakamoto the avatar of the creator of Bitcoin.
So there are no dark corners for the money oligarchs to hide in. No back doors to fund hidden conflicts. No traceless suitcases of cash for warlords.
The subject of Bitcoin is very deep indeed, considering it's only 15 years old. Quite a feat for something that has no marketing budget or management team.
I am no bitcoin maximalist but I do want to point out, as my closing statement, an immensely important fact about Bitcoin: Bitcoin is unique amongst all the cryptos out there because it has no founder, no management team, no headquarters or office. It's all volunteers. I think of it as its virgin birth, it’s immaculate conception.