He was a handcrafter that worked with gold and silver, making jewellery and ornaments, but he was not happy in have to work for living, He need it enthusiasm, a challenge, and now he’s plan was ready to start.
Generation, after generation, people have use the system of swap.
This means that a man, would get to his family the things need it to survive, by specialise himself in some type of work. What he would get from his work that was more than he need it, he would then trade for the rest the things he need it.
One day at the market was always noisy and dusty; but people enjoy the screams and salutations. It used to be a happy place, but now it was just too much people, too much arguing.
There was no longer time for a good chat. It was definitely need it a better system.
In each community, a simple govern have been created, in order to guarantee that freedom’s and the right’s of the persons where respected, and that no man would ever been forced by any other man, or group of mans to do something against his own will.
This was the only purpose of the government and each governor that was supported voluntarily by the local community that have elected him.
However, the market day was a problem that people couldn’t fix. How many corn basket’s, worth a cow? A cow worth it more or less than a bull car? And so on, so on, but no one has ever thought in a better system.
It was the morning of the speech, the entire village have gathered in the main square to listen John talk.
And so, John started to explain to everyone the new system, that he has called “money”.
Sound like a good idea, the people have said. But how we gone start to put him in practice, the people have ask.
And John answers them:
“The gold that I use in my jewels is an excellent metal. Don’t loose the shine, it won’t get rusty and it will last many, many years. I’ll melt down, some of my own gold in pieces, and we will call each one of the pieces “coin””
He has explained how the values would work, and how that “money” would really work as a cambium value.
A much better system, than the old swap system.
Then, one of the governors’s, said: “Some persons can find gold and make “coins” by themselves”
“That would be serious unfair” John said, like if he already have an answer ready. ”Only the coins approved by the govern can be used, and they will have a special mark in to them”
That sound it reasonable, and it was purpose that each man got an equal number of “coins”. “Only I deserve the bigger amount” said the candle maker. “Everyone use my candles”. ”No”, said the farmer, “without food, there is no life, so for sure, we deserve the biggest amount of “coins””. The argue have continued.
John have let them argue for a while, and then said:” Like u don’t reach an agreement, I purpose that each one of you, get from me, the amount of coins that each one need. There will be no limit, except by the capacity of paying back. The more “money” you get, the more you will have to return at the end of the year”
“And what is your payment?” The people have asked to John.
“Like, I am providing too you a service, that is the production of the “money”, you will give me right to receive payment for my work. Let’s say that for each 100 “coins” that each one of your get, you will have to return to me, 105 for each year that you keep that doubt.
Thus 5 extra “coins” will be my payment, and I will call that payment of “interests”.
Didn’t seem to exist a better solution, and 5% a year, didn’t look much.
“Return the next Friday and will start” John said to the people.
John didn’t loose time. He has make “coins” day and night, and by the end of the week the work was done.
The persons have make a line to get in his shop, and after the “coins” have been examined and approved by the governor’s, the system was officially adopted.
Some persons ask just some “coins”, and get out trying the new system.
People, simply love the new system, and soon, every thing have a value in “coins”.
The cost that they have put on each thing was then called the “price”, and the “price” would vary, basically according to the quantity of work need it to produce the thing.
If it was need it a lot of work, then the “price” would be hi, if it was a fast production thing, then the price would be low.
In one city lived Richard that was the only clock maker in that city. His prices where hi, because his customers where anxious to pay to get one of his watches.
Then, other person started to make watches, and offered them at a lower “price” in order to obtain more sales. Richard was then forced to get his “prices” lower, and after the “prices” have fall, both man’s tried to offer the best quality, by the lowest price. This was the genuine “Free Competition”.
Then the same thing has happen with the constructors, the land operator, farmers, at the end, in all the business, The customers choose always what the felt was the best deal, they have freedom of choose. There was no artificial protection, like licences, or special fees, that complicate the coming of new people in some kind of business.
The life status have elevate, and after a while, people start wondering, how was possible, they have lived all this time with out “money”.
At the end of the year, John gets out of his shop and went to visit everyone that owns him money.
Some persons have more than what they have borrowed, but this mean that the other persons, have less, because in the beginning it have only been delivered, a limited quantity of “coins”.
The ones that have more “coins” than what they have borrow, have paid what they have borrow, plus the 5 extra “coins” for each 100 “coins” they got. But they have to borrow more “coins” again, in order to keep the process.
The others that didn’t have the totality of the “money” to pay back find out by the first time, that they have a “depth”. Before borrow more “money” to them, John took some of the things they own, as a guarantee.
And after this, each one have left, trying desperately to get thus 5 extra “coins” that started to seem so hard to get.
No one have realize that the Country has one, would never leave the depth, until all the coins as been delivered, but even if this was achieved, there was always the 5 extra “coins” that have never been put in circulation, for each 100 that have been put in circulation.
No one, excepting John have realize that was impossible to everyone pay the “interests”, because thus extra “coins” have never been put in circulation, so it would always miss some coins to someone.
It’s true that John was also spending some “coins”, but he alone, couldn’t spend as much as
5% of the total economy of the Country. There were thousands of persons, and John was just one. Plus, he was a jewellery maker, living a very pleasant life.
In the back of his shop, John has a vault, and people started to thing that for security, was better to leave some “coins” there. John would then charge a small quantity, depending on the amount of money, and the time that the money would stay there, and he would give to the owner of thus coins a receipt for each deposit.
Whenever a person was out make shopping, normally he would carry many coins. That person would deliver to the salesman, one of the John receipts according to the value of the shops.
The salesman, would recognize the receipt as valid, and would accept him, to later deliver him to John, and receive the value of the receipt in “coins”. The receipts pass from hand to hand, instead of the own gold. The people have a total trust in the receipts, and accepted them so well as the “coins”
Short after, John realizes, that it was very uncommon, that someone would ask the coins back.
And he starts thinking: “Here am I, with all this gold, and still have to work hard as a handcrafter, it doesn’t make sense. There are a lot of people that would be very happy, of pay me “interests” for the use of this gold, that is standing here, and that the owners, almost ever asking him back.
It’s true that the gold doesn’t belong to me, but it’s at my responsibility, and that all that cares. Basically, I don’t need to make any more “coins”; I can just use the ones that are staying here in the vault.
In the beginning, he was very carefully, lowing only some coins at a time, and only if he was sure, that the person would pay back. But after a while, he started to get more trustful, and started to borrow bigger and bigger amounts.
One day, someone has asked for a very big amount of “money”. John then suggest to the person:
“Instead of carry all thus “coins” with you, we can make a deposit, in your name, and ill give you the receipts, with the value of the “coins”.
The person have agreed, and left the shop with the receipts.
He has got his loan, but the “money” was still in John possession.
After the customer leave, John has smiled. He could borrow “money”, to the people, and still, keep the same amount of “money”, in the vault.
The friends, the outsiders, even the enemies need it “money”, in order to keep with their business, and as long, as they could assure the return, of the money, they could borrow as much as they need it. Just by writing receipts, John was able to “borrow” several times the amount of “money” he possessed; even knowing that he was not even the owner of that money. All was safe, as long as the true owners, didn’t ask for they money back, as long, no one suspected anything.
There was a book, where he kept the records of the loans, and deposits of each person. In fact the loans business was being really lucrative.
His social position in the community was growing almost as fast as his richness.
He was becoming an important and respectful man. In the economic matters his opinion was taken his high consideration.
The jewellery makers of the other cities started to be curious about his activities, and one day call him to a meeting. John have then explain to them what he was doing, but have make them see also, how important was for them to keep the secret. If the plan was expose, everything would failure, and so, all of them have agree in make their own secret alliance.
Each one of them return to their cities, and started to work in the way that John have teach them.
Everyone was accepting “receipts” just like if they where the gold”coins”, and many of the “receipts” where then put in safe, the same way as the “coins”.
Whenever a salesman, need it to but some things, from other one, he would simply write a note to John, saying that he was giving permission to transfer some “money “from his account, to the other salesman account.
John would only need some minutes to change the numbers in his records book.
This system has become very popular in short time, and the small notes, with the transfer permission, would then call “cheque”.
Later, in one night, the jewellery makers have other secret meeting, where John has reveal to them a new plan.
In the day after, they have set up a meeting with all the governors, and John started:
“The “receipts” that we are using, have become very popular, no doubt the most of you, the governors, are using them, and believe they are very convenient.” All the governors have agreed, and they were curious what the problem was then.
“Well”, John continued, “in first place, some of the “receipts” are been copied, by forge makers. This is something that has to stop”.
Concerned the governors have asked: “What can we do?” John answers them: “I make the proposal of first: the responsibility of printing, a new type of “receipts” in a special paper, with very complicated draws. Each bill will then be signed by the main governor. We the jewellery maker’s, can pay the costs with the impression, because this new system will save us a lot of time, that we spend signing all the “receipts”. To this new “receipt” we will call him “bill”.
The governors have thought: “Well its our duty, protect the people, against this forgers, and the proposal you make, seems a good idea”. They have agreed then, in print the new “receipts” or “bills”.
“In second place”, John has said, “Some persons, have make some diggings, found some gold, and are making they own gold “coins”. I advice that u pass a law, that say that anyone that found gold, have to deliver it.
Off course this persons will then be paid with “coins” and “bills”.
It was sounding like a good idea, and with out thing much more about it, they have printed a large quantity of new “bills”. Each “bill” has a value impress on her, of 1, 2, 5, 10, etc, etc. The small printing costs where paid by the jewellery makers.
The “bills” where easy to carry, and in short time where easy accepted by the people.
Even knowing that “coins” and “bills” where very appreciated, they where only used in 10% of all transitions. The registers show it that the “cheque” system was used in 90% of all business.
The next phase in John plan has started. So far, people was paying John, in order to him keep they money safe. In order to attract more money to his vault, John starts offer to the people that put money, safe in his vault, 3% over all money that each depose it.
The most of the people, believed that he was re-borrowing they money too someone who asked a loan, with 5% interests, and that his profit was the difference of 2% between what he was paying to the people that put money in the vault, that was 3% and what he was charging to anyone who borrowed from him, that was 5%, and people didn’t care that much anyway, because it was much better get 3% profit, than have to pay, to put your money in a safe place.
The amount of deposits have grow, and with all the extra amount of money in the vault, John could now borrow, 200, 300, 400 and some times even 900 in “coins” and “bills” for each 100 that he have in the vault. As long as he didn’t pass the relation of 9 to 1, it was safe, because one of each ten persons, want it the “money” back.
If there was no “money” available when was asked, people would get suspicious, because the record books would show how much they have deposit. Even so, over the 900 that the book showed that John has borrowed, writing “cheques”, he could charge until 45 in “interests”, that is 5% of 900. When the loan plus the “interests” where then return, the 900 where cancelled in the depth book, and John keep the 45 of “interests” to him. So off course he was more than happy, in pay 3 “coins” of “interest” over 100 that was originally deposited at the vault, and that in reality have never left the vault. This means, that for each 100 that he keep in the vault, it was possible to get a 42% profit, while the most of the people, thought he was only making 2% profit. The other jewellery makers, where doing the same thing. They created money out of nothing, only with they signatures in a “cheque”, and still charging “interests” over him.
It’s true that they where not making the money, the government printed the “bills” and deliver them to the jewellery maker’s to be distributed. The only cost that John was having was the small cost of the impression. Meanwhile, they were creating credit money that was coming out of nothing, and over this credit money, was the “interests” that was been charged. The most of the people believed that the provision of the money was a government operation. They also believed that John was loaning them, the money that someone else have deposit, but was very strange that none of the deposits, went smaller, when John borrow money to someone. If everyone has tried to take out the deposits at the same time, the scam would be discovered.
There was no problem, when someone asked for a loan in “coins” or “bills”. John, simply explain to the government that because of the increase of population and production, more “coins” and “bills” where need it, and he would get them, by the small cost of the impression.
One day, a very intelligent man, went to visit John. “This “interest” charge is not correct”, he said, “for each 100 ”coins”, that u borrow to someone, you are asking 105 “coins” back. But thus 5 “coins” extra, can never be paid, because they don’t exist”.
“The farmer’s produce food, the industrials produce good’s, and so on, whit everyone, but you just produce money. Suppose that there are only two company’s owners in the entire Country, and that we give job to the rest of the population. We ask you a loan of 100 “coins” each one, we pay 90 “coins” in salary’s and costs, and we keep 10 as profit (our salary): That means that the total buying power of the population is 90 “coins” plus 10 “coins”, multiplied by two, this means is 200 “coins”. But if in order to pay you back, we have to sell or entire production for 210 “coins”. If one of us have success and sell all the production for 105 “coins”, then the other man can only hope in get 95 “coins”, and even if he tried to sell some of his good’s to get the rest of the money, that will not be possible, because there is no more money to buy them.
Have obtaining only 95 “coins”, the second company owner, will still owning you 10 “coins”, and he could only pay you back, if he get another loan. This system is impossible”.
The man continued, “You should produce 105 “coins”, that was 100 for me, and the other 5, for your spends. This way there would be 105 “coins” in circulation, and the depth could be paid.
John have listen in silence, and finally said: “Economic finance, is a very deep subject my friend, and it require years of study. Let me worry about thus subjects, and you worry about your subjects. You should become more efficient, increase your production, reduce your costs, and become a better company owner. I will always available to help you, in thus subject’s.
The man have left, but still not convinced, there was something wrong with John operations, and he felt his questions have been avoided.
However, the most of the people believed and trust in John – “He is the expert, the others should be wrong. Just look how the Country has developed. The best thing is leave them take care of thus subject’s.
In order to pay the “interests” over the loans they have asked, the salesman had to increase the “price” of they products.
The working class, complain that the salaries where too low. The company’s owners refuse to pay higher salaries, saying that it was not possible. The farmers could not get higher prices for they production. The house wife’s complaining that the aliments were too expensive.
Finally, some people went on “strike”, something that no one has ever heard before. Others have been severely affected by poverty, and his friends and family didn’t have “money” to help them. The most of them have forgotten that the true richness is around us: the fertile lands, the great’s woods, the minerals the animals.
They only thought about “money”, that always seems to miss. But they never have questioned the system. They believed that the government was in control of it.
Some few of them, have saved some excess money, and have created loan companies, or “financial companies”. They could get 6% or more, this way, that was better than the 3% that John was paying, but they could only borrow the “money” that they possess. – They didn’t have the strange power to create “money” out of nothing, simply registering some numbers in a book.
This financial companies in some way, worried John and his friends, so, immediately, they start formed they own companies. In the most of the cases, they bought the other companies; before they started doing they own operations. In short time, all the financial companies or belong to them, or where under they control.
The economic situation got worst. The working class, was shore that the company owners where having a lot of profit. The owners said that the working class was lazy, and that they were not working prop ably, everyone blamed everyone.
The governors could not get a solution, and more important than that, was fighting the up growing poverty.
The government have then, put in practice some plans, and have make laws, forcing the people to contribute with them. These have made people anger. They believed in the old idea, of volunteering helping.
“This new laws are no more, than a legalized assault. Take out something from someone against his will, independently of the purpose to witch will be used, its no different from still.
But each person felt himself defenceless, and was afraid of the possibility of end it up at jail, if he failed the payment. In the beginning, this plans, have sort some effect, but after some time, o poverty problem got bigger again, and then was need it more money to help. The cost of this plans, got bigger and bigger and the size of the government grew also.
The most of the governors where honest man’s, trying to make a good work. They didn’t like to ask more ”money”, to they people, and finally didn’t have other option, than to ask money to John and his friend’s. They didn’t have a plan, of how to pay back the loan. The situation got worst; the parent’s couldn’t anymore pay the teachers for they children’s, they couldn’t pay for doctors, and the transport companies where closing.
The government, seen him self forced to get control of this services, one by one.
That way, teachers, doctors and many others have become public employees.
Few persons where happy with they jobs. They where receiving a reasonable payment, but they have lost they identity, they have simply become pieces of a giant machine.
There was no space for personal initiative, the effort was not enough recognize, and there was no salary and it was only possible, pass to a higher position, after the person on that position have retire or die.
With out know, what more to do, the governors went to ask John advice. All of them considered him very wise, and a expert in the subject of “money”. John, have listen to them all, while they explain they problems, and finally said: “A lot of people don’t know how to take care of they own problems, they need someone who do it for them.”
“For shore you will agree that the most of the people, have right to be happy and have the basics need it for live.”
“Well, the only way of equilibrate the things, is take out the excess from the rich and give him to the pours. Arrange a tax system. The more a man has, the more he has to pay. Collect the taxes according of each person to the personal richness, and distribute them according to each persons needs. Education and health should be free for the ones who can not afford it”.
He has give them a long talking about great ideals, and finalize saying: “Remember that you own me money. Your have been asking for long time. The minimum I can do to help you, is just charge the “interests”. We leave the loan as a depth, pay now only the “interests”.
They have leave, and with out thing much about it, start putting in practice the tax over the income: the more you gain, the more you pay in taxes. No one has liked the idea, but it was or pay or go to jail.
The new taxes, force the salesman to increase the “prices”. The working class, demanding higher salaries, what make may companies to close, or to substitute men by machinery. This result in more unemployment, and force the government to arrange more help plans, and more unemployment “money”.
Where then introduce special measures and other protection mechanisms in order to make some companies continue with the work offer.
There were people, wondering if the production was to answer to the orders, or just to keep employment.
But at the end, things where going worst.
Since control of salaries, control of prices, every kinds of controls where tried.
Government, tried to get more money with taxes over sales, taxes over salaries, etc.
At that moment, someone observe that in the process between the harvest of the cereals, till finally the bread reaches the families table, there were around 50 different taxes.
Many experts have present them self and some of them where choose to governors, but after each annual meeting, almost nothing was achieved, except the announce that the taxes have to be reshaped, but the total amount of taxes, was always up growing.
John, start demanding the payments of his “interests”, and an bigger and bigger amount of “money” was need it in order to pay it.
Then, the different ideological “politics” appear. People start arguing which ideology would solve better they problems.
They have argued about personalities, idealism, the slogans… About everything except about the real problem.
In one city, the depth caused by the “interests” was higher, than the tax money collected at the end of the year. In the entire Country, the “interests” that were not paid, have keep growing, was started to be charged “interests of non paid interests”.
Step by step, much of the richness of the Country was bought or controlled by John and his friends, and with that have come a even bigger control over the people. But still, the control was not complete. They knew that the situation would only be totally secure when each and every person was controlled.
The most of the persons that opposed the system, was silenced by financial pressure, or was expose to public ridiculization. In order to achieve this, John and his friends bought the most of the news papers, television channels and radio stations. And carefully choose the persons that would run them. A lot of thus persons, have a true honest intention of change the world, but have never realized how they where being used.
The solutions they presented always deal with the effects of the problem, but never with the cause.
There were several news papers – one to the right wing, one to the left wing, one to the labours, one to the lords, and so on. It really didn’t matter which one you belong, or support, as long as your didn’t thought in the real problem.
John plan was almost at the end – the entire Country owned him “money”. Thru education system and media he has ceased the control over the mind of the people. They could only believe and thing in what he wants them to thought.
Once that a man, have more money that he can spend in order to achieve his pleasures, what challenge is left?? To thus who have an aggressive mentality the answer is: Power.
Power pure and complete over other humans. They have put idealists in the media and in the government, but is the real controllers that John look for, was people that have mentality of ruling class.
Most of the jewellery makers have followed this path. They knew the sensation of power and big wealth, but didn’t please them anymore. They need it challenges, and emotion, and the control over the masses have become just a big game.
They believed that they where superior than everyone. “We our right and duty rule. The masses don’t know what the best is for them. They need to be ruled and conduct. Rule is or right by birth”.
All over the Country, John and his friends, owned many credit companies.
In truth, they were from private property, and from different owners. In theory, they where competing against each others, but in truth they where working together. After convince some governors, they have created something called a Central Bank.
This institution was supposed to regulate the source of money and be a institutions belonging to the government. Strangely, it wasn’t allowed to any governor, or public employee, to join the direction board.
The government stopped to ask money directly to John, but started to use a bonus system against the central bank. The guarantee offered was the calculated income from the next year taxes. This was going according to John plan – Take the attention from his person, and put the attention in an supposedly government institution. Behind the curtains, he was still in control.
Indirectly, John has such a control over the government, that this was forced to follow his instructions. He used to say: “Give me control over a country money, and I give no worry about his laws”.
It didn’t matter which partied was elected to rule, John have the control over the money, the vital “blood” of the Country.
The government was obtaining the money, but the “interests” was always accumulating after each loan. Each time, more money was spend in helping plans, and unemployment cheques, and shortly after, the government was having problems in pay even the “interests” not to talk in loan.
Meanwhile there was more and more persons, who started ask themselves: “If the “money” is a system created by Man, then there must be a way to put the “money” serving the people, instead of being the people serving the “money”. But fewer and fewer persons where thinking this, and this thought got silent in the madness of searching the un existing “money” to pay the “interests”.
The governments have changed, the politicians have change, but the base politics, where still the same. With out make a difference which government was in “power”, the final objective in John plan was closer and closer each year that passed.
The population was overcharged with the taxes, the different politics couldn’t do anything anymore, and it was time to put in practice the final step.
10% of the money used, was still “coins” and “bills”. These need it to be eliminated in a way that didn’t look suspicious. While “coins” and “bills” where still in use, people where free to buy and sell the way they wanted, they still have some control lover they lives.
But not always was safe, walk around with “coins” and “bills”. “Cheques” where not accept out of the local communities, so a more convenient system was started to be searched. John, once again have a solution ready. His organization would provide a plastic card to each person, with the name of the person, a picture of the person, and a personal number (credit cards).
In any place that this card was presented, the person from the place would call a central computer, and check if the person has credit to by what he wanted.
In the beginning, was allowed to the people spend a small amount in credit, and if that was paid in the same month, the was charged no “interests”. This was a good thing to the working class, but what about the employers? They have to install machinery, produce the goods, pay the salaries, etc, and then sell all the goods, and pay the credit. If the month was passed, they would have seen charged to them 1.5% of “interests” for each month the depth was kept, this could reach 18% in one year.
The company owners didn’t have other option, than add 18% over the final “price”. But all that “money” or additional credit (18%) didn’t have been borrowed to anyone. All over the Country, the employers have the impossible task of pay 118 “coins” for each 100 “coins” that they have got.
John and his friends seen they social position been even more elevated. They where consider totally respectful, “pillars” of the society. They declarations in finances and economy were accepted with conviction.
Over the higher and higher tax charge, many smaller companies have close they doors.
Special licences, where necessary to many operations, in such a way, that to the other companies was very hard to participate. John owned and controlled all the major companies that owned hundreds of subsidiaries. This would give the impression, of competition between them, but at the end John controlled them all.
At one point, all the other competitors, where forced to close down.
Carpenters, electricians, constructors, and the most of the small industries suffer same destiny, one by one all of them where bought by the major companies owned by John and his friends, that have government protection.
John wished that the plastic cards, replace the “coins” and “bills”. They plan was that once all the “coins” and “bills” where out of circulation, only the business that where using his system of cards connected to a central computer were able to work.
John, planed that in case of someone lost the card, would be impossible for that person to buy or sell, until his identity was proved.
He wanted a law that give him full control.
A law that forced everyone to have they personal number tattooed in his and. This number, would then been visible, under a special light connected to a computer. Each one of thus computers would then connect to a giant central computer, and this way John could know everything about everyone.
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The story you have just read it, off course its fiction.
However, its really close to our reality, if you want to know who is the John, of our real world, a good start, would be the study of the activities of the jewellery makers in England in the XVI and XVII century.
For example, the Bank of England started in 1694. The King Guillerm of
The interests would be of 8%. Remember, that The Magna Cart said that was a crime take interests, possibly of charge with death penalty. The King should concede to the jewellery makers letter to the Bank, where allowed them to create credit.
Before that, they operations of emit receipts for more money than what they possessed was illegal, the letter of the king turn it in to legal.
In 1694 William Patterson obtains a letter like this, to the Bank of England.
Text by: Jackson
Tranlation by: Specter
