The world virus in the news today might be COVID-19 but for nearly 2 1/2 centuries the real virus plaguing mankind has been central banks and the rapacious appetite of the government paradigm.
The United States have had numerous attempts at central banked economies throughout its first 244 years as a sovereign state.
The original attempt at a central bank was a-formed by Robert Morris whom levied to create the Bank of North America. The Bank of North America lasted only four years, 1781–1785. Many founders of the United States were strongly opposed to a central banking authority because they knew the ills and witnessed them first hand under the English crown. This contempt for it led to a brief run for it as the country's prominent bank.
The Bank of North America was disbanded and soon thereafter, the First Bank of The United States was born under Morris's understudy, Alexander Hamilton, in 1791. Hamilton was an aide to Morris and continued his project to central bank the economy with cheap credit. That cheap credit is responsible for the boom and bust cycle that still occurs today under central banked economies.
Unlike today, only 20% of bank notes were created by the First Bank of The U.S. while state banks were responsible for the rest of the notes. Thomas Jefferson was strongly opposed to the operations of the First Bank of The U.S. and its charter ran out in 1811 after 21 years of operation.
The Second Bank of The United States was enacted 5 years after the charter of the First Bank of U.S. ran out. James Madison was instrumental for the 2nd bank and signed its' charter. Andrew Jackson however was strongly in opposition to centralized banking and viewed these attempts at money creation to be outrageous and extremely corrupt much like Jefferson's viewpoint on the First Bank. The Second Bank of The U.S. operated 1816–1836.
Jackson became President of The U.S. in 1828 and soon after required all federal land payments to be paid in gold and silver. Keynesian economists allege this led to the panic of 1837 or the Free Banking Era. In the Free Banking Era, only state chartered banks were in operation and the world was a better and more prosperous place therefore.
The average lifespan of commercial banks during this period was only 5 years. This was an era of true capitalism, where irresponsible companies weren't bailed out but failed for their lack of production. In fact, during this era there were no income taxes. Nearly half of the banks failed and there weren’t bailouts for corporate monopolists of state creation.
Monopolies today run rampant, the true definition of a monopoly is a government grant or privilege and during the Free Banking Era, no special interests took precedent over the citizenry.
Following this era of Free Banking was the National Banking Era which was basically created to funnel money to the Union for the Revolutionary War. It was created in 1863, two years after the war had begun [in 1861] and ran all the way up until 1913.
In 1913, the real monolithic-parasitic-organism known as the Federal Reserve was launched. That's where we are today, the Federal Reserve Era. The Fed Era has caused numerous business cycles and has caused numerous depressions, wealth evaporation, and downright poverty over its 107 years of ongoing tenure.
The Federal Reserve in 1971 under Richard Nixon took the U.S. Dollar off of its gold backing. This event was the catalyst for the end of a once prosperous and productive nation. Up until 1971, the U.S. had been the wealthiest and most productive country in world history. The U.S. created high quality, low cost goods and the rest of the world couldn't compete with American manufacturing and its sound industrial practices.
When the U.S. Dollar became decoupled and no longer pegged to gold, immediately the country began to lose its productive might and within 50 years the U.S. went from the world's largest creditor nation to the world's largest debtor nation.
This all really began to unravel and culminate early in this new millennium. The 2008 financial crisis that bailed out the negligent gamblers on wall street and spoon-fed corporations [pun intended] ushered in Quantitative Easing for an economy that no longer produced but turned to services.
Today, 17 March, 2020, depositors find themselves in a situation where we now have 0% interest rates and banks are boasting about zero-reserve banking! For years, over leveraged banks only held fractional reserves. Fractional reserve banking means they were already inherently bankrupt! If there were runs on banks, they couldn't pay! Today, with zero reserve banking, the rhetoric of even being able to pay you back doesn't exist, they're openly admitting they're lending everything depositors have given them.
The U.S. is literally the world's poorest country today: it has more debt than the rest of the world's nations combined!
So, how does the U.S. escape the world of predatory central banked economies that have plagued Americans over and over again?
The way the U.S. and world economies for that matter as well, can return or become wealthy is through free-market private money: Bitcoin.
Bitcoin now is the only way out of an over-leveraged economy that has been a shaky house of cards since the last crisis. The last crisis was papered over by monetary stimulus or quantitative easing [money printing] resulting from the 2008 crisis and the state's poor response. But anyone that isn't dishonest must acknowledge that a printing press doesn't make a nation wealthy; furthermore, all nations would otherwise print themselves into prosperity. Printing money and flooding the monetary supply only makes a society poorer.
In 2008, interest rates were 5.5% and today as noted they're at 0%. There can be no growth and the Fed is out of ammunition. The decisions to save the economy following the bust of 2008 just prolonged a more drastic and harsh result we are about to experience. The economic indicators have shown the potential problems brewing now for years and the costs will be drastic.
Bitcoin was born out of the 2008 bloodbath and its matured over the last 11 years: now is the time for Bitcoin to shine!
Bitcoin has a hard cap or finite supply of coins that'll ever exist, this supply cap is coded into the protocol. No longer is Satoshi Nakamoto's vision, the creator of Bitcoin, a long-shot, its the only shot we have to operate peacefully and have a truly free-market economy!
For years, the reason the U.S. was able to produce and store wealth was the peg to gold. Today however, the money is fiat, money by decree. Fiat money is backed by nothing other than a judicial monopoly propped up by a monopoly on violence by the state.
It's time to embrace free-market money. Bitcoin replicates all of the things that make gold great money but with additional benefits. Gold is great because its scarce, divisible, and fungible.
Bitcoin is scarcer, easier to divide, more fungible, and is the most portable money that's ever existed. You can do commerce world over for Bitcoin and have settlement within 10 minutes - its magic money for the digital epoch.
Furthermore, the Bitcoin network is now the most secure network in the history of the world. It’s proof of work design with distribution of nodes ensures the security of transactions and with 99.9% uptime its incomparable to other networks that rival it.
If Americans and the rest of the world want a roadmap back to wealth creation and a place to store value, they need look no further than Satoshi's code. Bitcoin's code is open-source and transparent, the polar opposite of central banks which over and over again have stolen and debased the money of its people.
The virus media pundits blame for the recession we're heading into [or depression] shouldn't be COVID-19, it's the Federal Reserve and the world's central banks. The way out of this mess was created out of the last financial crash of 2008: Satoshi launched his software on 3 January, 2009, with a Times of London Headline embedded into the genesis block: "Chancellor on Brink of 2nd Bailout for Banks."
It's time to put faith in math / code / and capitalism and stop putting faith in central planners that are destroying this generation and future generations for their own gain.
Long Bitcoin & privatization, short government & the bankers!
R.L. Bryer is the Author of Blockchain: Project Renaissance I & II in which he details how free-markets can operate and flourish under a Bitcoin embraced society. His books have sold in over 40 countries throughout the world and he's written for countless projects in the blockchain technology space. He's also the Host of The Vires in Numeris Podcast. His books, articles, & podcast are all available @ Bryer.io.