Debt: An American History, Part I

An American History: Part I

By the Economy Team

“Money is coined liberty.” ---Dostoevsky

urious

eader;

o understand the story of the United States of America, you must realize it begins as a story about money.

Money is the common thread that wove this tapestry of a nation. The History of Money, (Davies) began with the ancients.

e pick up the thread in a land long ago and far away, Spain. The greatest empire since the Roman Empire began in 1469 with the wedding of King Ferdinand and Queen Isabella. As they were united in marriage, their lands were likewise united to become Spain. It was Queen Isabella who financed Christopher Columbus, in 1492 to find a western route to India. Indeed, Columbus thought he'd found India on arriving in Haiti and the Dominican Republic, which at that time he called Hispaniola. He had seen Cuba on this trip as well. All of these places were conquered and colonized by Spain , “…as the right Christian nations had assumed they had when previously unknown places and people were discovered. They had the right and responsibility to take charge of them.”

From Encarta

olumbus exclaimed, “Oh most excellent gold!” (Goodwin, Greenback)

ueen Isabella shared some of the gold she received from Columbus... with the Pope.

series of papal decrees ensured Spain's claim to sovereignty in vast portions of the lands that became known as South, Central and North America. In 1493, Pope Alexander VI approved the division of these lands between Spain and Portugal through South America, Central America, Florida and the North American Southwest including all of California. The Pope based this on his perceived need to spread Christianity to the inhabitants of these lands (Treaty of Tordesillas, 1494).

he Conquistadors played a large part in taking the land and treasure from the Aztecs, Incas and Mayans who had collected their valuables over hundreds of years. Those who were not killed in battle mostly died from forced labor or from diseases introduced by their overlords. The Spanish and Portuguese also brought slaves with them from Africa and non-African slaves; mostly women, who were Jewish or Muslim.

lthough the native people had traded in riches like cocoa beans, furs, wampum (strings of beads) and other forms of barter, they also had silver and gold. With the forced labor of the people starting in 1580, Spain managed to ship “11 thousand metric tons of silver and gold” over the course of 46 years. The Spanish Empire had grown immensely in 1516, when the grandson, Charles of Ghent, inherited Spain, Hapsburg, Belgium, Netherlands, Germany and Austria. He later became emperor of the Holy Roman Empire in 1519, and known as Charles V. It truly was the largest western empire since the Romans.

uring this time, a European nobleman had started mining silver in what is now the Czech Republic. He made his own silver coins called “thaler” weighing one Saxon ounce. Other countries adopted this standard, including Spain, the Netherlands and England, calling their coins “dollar.” This silver currency was accepted as money in the Americas and the rest of the world.

he economies of Europe were revolutionized. Banks prospered. Commerce expanded and prices became more and more expensive.

n the end, most of the silver was paid out by Spain to pay for all their long and costly wars. Campaigns against heresy cost them a bundle, not to mention all the luxuries for the king, the nobles and all the administration of the global empire. Then in 1620, Europe was hit hard with a recession. Silver, being the fuel of the global economy at the time, had been copiously spent in Asia, in places like China and India. A variety of new domestic crises hit Spain, including famine and substantial loss of resources, augmenting their previously described burdens. As a result, the colonies were left pretty much on their own.

he once great and mighty Spain... had exhausted her wealth.

urious Reader, does any of this story sound familiar?

e'll continue "following the money" to Colonial Times with the next entry on Tuesday August 15th through August 17th.

Credits not included as links above:

Greenback, Goodwin, Jason, Henry Holt and Co. 2003, 296 pages
Davies, Glyn, A History of Money, From Ancient Times To Present Day, 3rd ed. Cardiff: University of Wales Press 2002, 720 pages

who worked with the Economy Team to make this first part so pretty:) Also, as James Craven pointed out in his own blog post recently, the death toll from this invasion from Spain to the native peoples was perhaps 150 million people over the years. It was probably the largest genocide in human history.

150 million deaths?? Over how many years I wonder.

That's difficult to fathom, and I'm wondering why I didn't learn that in school? ;-)

They did leave some gorgeous missions for us here in California though....

until the Spanish American War, however, most of the deaths were early on and after that, the Dutch, Brits and French killed off another 50 million in the areas where they took control. Pretty much over the course of Europeans in this part of the world.

"The once great and mighty Spain... had exhausted her wealth.

Curious Reader, does any of this story sound familiar?"

Alas, sadly so. . .

carol4clark

General Wes Clark * * * * 4 Stars Over Texas

[dated information ] Why Is the Fed Doubling M3?

"When you hear the expression on financial news media like CNBC, FNN or Bloomberg that the Fed is acting to “flood the system with liquidity,” which is a commonly used expression, they’re talking about M3, which is money available to maintain liquidity of markets, so that positions can be unwound. In other words, people who are on the wrong side of the market can unwind positions in a timely manner.

"Fed Chairman Alan Greenspan also complained recently of the record amount of derivative money, i.e., borrowed money that has been used to purchase speculative long positions in both stocks and commodities, more than $12 trillion worth, which is a record number. This is a number that Greenspan has clearly indicated, including it in his speech at the G8 meeting in Georgia.

"What is new in Greenspan’s speech to the G8 is that he mentioned that there was a record trader short position. And he even used the word ‘smart money’ trader short position in the 10-year US Treasury bonds.

"The implications are ominous. There are more U.S. 10-year notes now sold short than there are 10-year notes in the float to cover those positions, and that is an enormous negative implication because the only time that the ‘smart money’ sells U.S. Treasury paper short in such size is when they expect an economic debacle.

"For instance, the day after the Bush-Cheney regime came into office, the ‘smart money’ went short equities and long bonds, knowing that this is the result of building Bushonian budget trade deficits and what impacts that would have on the market. One impact, obviously, is that it would bring down interest rates.

For the rest of the story and how these implications tie in with the unprecedented powers granted to the Bush Cheney Regime through the USA Patriot Act I and Patriot Act II, subscribe to AlMartinRaw.com
(http://www.almartinraw.com)

Al Martin is an independent financial, economic and political analyst with 25 years of experience as a trader on NYMEX, CME, CBOT and CFTC. As a former contributor to the Presidential Council of Economic Advisors, Al Martin is considered to be a source of independent analysis for financially sophisticated and market savvy investors -- or those who want to increase their learning curve regarding the realities of today's global markets.

After working as a broker on Wall Street, Al Martin was involved in the so-called Iran Contra Affair as a fundraiser for the Bush Cabal from the covert side of government.

His memoir, "The Conspirators: Secrets of an Iran Contra Insider," provides an unprecedented look at the frauds of the Bush Cabal. His weekly column, "Behind the Scenes in the Beltway," is published weekly on Al Martin Raw.com, which also publishes a bimonthly newsletter called "Whistleblower Gazette."

It is time for a national oil change and is apparent to anyone who has looked at our national dipstick. Dependence on oil endangers our national security and economic security. - Al Gore 9/18/2006

Maybe it will be better the second time:)

On debt in America today versus last year at this time?

Cough. Cough.

Let me guess.... it's much worse. : /

King Ferdinand and Queen Isabella were busy in 1492 but somehow we only hear about them sending Columbus on his way. That same year Ferdinand and Isabella drove the Muslims out of Granada putting an end to a period in history. Of course before they chased the Muslims Columbus made sure he had the navigational instruments brought by the Arabs for his journey.

The age of al-Andalusa was over in 1492 but Europeans continued to benifit and profit from the contributions that were carried west from places like Baghdad. Our number system (which is really from India), music (Flamenco has its origins in Middle Eastern music), stores of knowledge in art and architecture, science and medicine all came with Islam to al-Andalusa.

An interesting note from last Wednesday when I did a presentation and discussion on al-Andalusa; none of the Americans there could remember hearing about al-Andalusa in school, nor could the Arabs in the audience, but one woman who's Jewish and from Eastern Europe said that she did learn about al-Andalusa in school. In fact back home many Jews still have Spanish sounding names.

Tiny implication written in the portion mentioning the slaves brought with the Spaniards being mostly Jewish and Muslim women. Those were dark days for a lot of people. Isabella was an uber-Catholic.

He seems to think we've reached the last stage...hyperinflation. Maybe he'd like to try swapping for something else. Actually, he'd like to swap for Euros, but Saudi Arabia nixed the idea.

http://www.reuters.com/article/newsOne/idUSL1853232120071118