Hey guys, welcome back to the Conspiracy Podcast. Oh, it’s good to be back, baby. What’s up, my people? How’s everybody doing? I was back from a trip over the pond. And look, I go to England almost every year. I love it. And I love that we have a good bulk of listeners there.

So, two things. One, I did not get recognized. No one recognized me. Were you wearing your hat? I really should have done that. But the second thing is, man, England, I love you. You’re great. It’s just the food. It’s just the food is not a hot ticket item. It’s really not. And this is no offense, I’m just speaking.

Did you expand out though? There’s a couple places that are really good when we go there. There’s a place called The Hatch that was literally established in like the 1400s. It’s amazing. We go there every year. Is this like London? No, this is like East Grinstead. And then there’s another place called The Cat, which is phenomenal. It’s deluxe.

If you’re just going to a pub, the pub food is not great. The chips are great and some of the fish and chips is good, but I don’t want to eat fried food for a week straight. It’s a little too much on the old gullet. And they do have these little sausage rolls that you can get from these little places, just walking the street. Those are amazing. I had three. They’re so good.

I’ve never been either. Granted, I’ve been to Scotland and Ireland, but not England. Never been to many of those. I was just in New York. You were just in Switzerland. Okay, fine, but I’m just saying you travel. So I’m not a peasant. I do some little travel things. I pay taxes. No, but you were just talking about food. It reminded me I was eating all kinds of good stuff at New York at a mall, a couple pizza.

Well, as we kind of wrap up our year, we are going to do a couple series that kind of go together and lead into each other. I know the Federal Reserve doesn’t totally lead into Pearl Harbor, but timeline wise, yes, we’re going to go into that. So what we’re doing is this is the Federal Reserve. It should be two parts and we’re going to go over the history of the Federal Reserve and how it came into the Federal Reserve Act. And then for the anniversary of Pearl Harbor, we are going to do Pearl Harbor. That one’s been in the making for a bit.

It’s even in our intro. It is December 1941. Somebody was sending me a message about how we hadn’t even done everything in our intros. That’s when you know they’re listening. But that’s also good because there’s so much that we can still keep. Infinity content. It’ll be like eight years from now and we still haven’t done all of it.

I think we’re going to do 9/11 next year, on the anniversary. I think so. And it’ll probably be like a five-parter. It’ll be a five-parter for sure. It’ll be like a JFK, extremely long form. I think it’ll be minimum hour and a half episodes, minimum. We’ll do a 9 hour and 11 minutes. What if we did that? Everybody always asking for more.

So this is the Federal Reserve. If you fast forward through our banter, welcome to the episode. Nowadays AI will chop our content up into chapters. And so we even have some people go to fast forward. On YouTube it’s very much like that, where you can set the chapters and name them, so it’s easy if people want to jump to a specific topic. Spotify does it auto, yeah, a hundred percent. All right, let’s get into it then.

So we’re going to start in the past, as we do. Humanity’s relationship with money and banking stretches back thousands of years. Long before anyone heard of the Federal Reserve, ancient civilizations were already solving the same problems that would eventually give rise to this question. How do you store wealth? And how do you store it safely? Humans like to accumulate more. The barter system can only go so far.

How do you measure value? How do you measure that a chicken is worth that work that you’re doing? That was the problem a long time ago. And how do you lend or borrow fairly? I think it’d be smart just to give a quick rundown, because a lot of people didn’t take economics class. What is currency, what is money? All money is is an idea backed by confidence. And that’s all currency is. That’s all it’s ever been.

Because in the grand scheme, even if you have an actual commodity that you’re trading, gold is quote unquote currency. But what are you going to do with it? What can you physically do with a piece of gold to do anything? Nothing. Zero. Unless other people agree that it is worth something. And you know that eventually the confidence is there, that you can exchange it again in the future.

And to extrapolate on that, if there’s something that doesn’t have confidence, then the value of that goes down. Meaning if you all of a sudden lost faith in the United States economy, the value of the US dollar will go down. Look at the stock market. All financial systems are perception based. If the masses perceive it to be worthless, it will become worthless.

In Mesopotamia around 3000 BC, people deposited grain and silver into the temple vaults. These temples, seen as sacred and secure religious buildings, functioned as the first banks. Priests acted as the first record keepers, and priests then became loan officers, lending out resources to farmers and merchants in exchange for interest. So interest was already developed. That’s a lot of power for them too. They’re like, tell me your sins. Your interest rate just went up, unless you want me to tell everybody.

But let’s just say it’s not nefarious. Say you have a little village and you have a temple and everybody considers it sacred. Who would you trust? You would trust them. And you’re like, dude, I struck it rich on this corn harvest, where do I put the money? I understand why you would trust them and not some random guy saying, give me your money, bro.

By the time of classical Greece and Rome, banking had become a professional trade. Greek money changers sat in open markets and they exchanged currencies and issued loans. So this is like if you are traveling to a different place that had different currency. They would have a store of it. But I’m so curious how they would inform. Did they have thugs back in the day going around bludgeoning you if you didn’t pay back the loan?

I still am not even sure a hundred percent what vig means. Is it just the running juice? Yeah, it’s just the juice. In essence, they’re not charging APR, they’re charging weekly interest. It’s not like a credit card. The vig is a percentage, but the vig is a compounding, it’s a compound interest. So let’s say if it’s fifty percent, then it becomes fifty percent of the total. So it’s a compounding interest. The vig is a noun. Grammar class over here.

Roman bankers called argentarii accepted deposits and arranged transfers, an early form of what we would recognize as a checking account. For centuries, temples and banks coexisted. Temples represented the trust while private bankers represented entrepreneurial finance. Both were the precursors to the modern idea that stable commerce required institutions that would safeguard deposits and extend credit. As trade expanded across Europe in the Middle Ages, banking became the province of powerful merchant families.

I just went back on the thought of, man, I got this hot new chariot, just came out, I’m trying to impress the ladies, get a loan for this thing. The Medici of Florence in the 15th century perfected the art of double entry bookkeeping. I was at their chapel. I went to the Medici Chapel. Boots on the ground. I bet it was grand because they had the cash, baby. Luxurious and opulent, maybe that’s the word.

So they perfected the art of double entry bookkeeping, making it possible to manage multiple accounts across continents. Their influence intertwined money, politics, and religion, a combination that always made the public a little uneasy. Rightfully so. Monarchs frequently borrowed from bankers in order to fund wars or to build palaces. When debts mounted, kings sometimes defaulted or accused their creditors of usury and just murdered the creditor.

So what usury is, and there’s usury laws, it’s basically abuse. It’s abuse of too much interest. It’s kind of like a price gouging type of thing. And a little bit like mafia type of loan sharking, a little unethical. It’s interesting that you mentioned this, because there are usury laws, but originally when there was credit and credit facilities for retail people like us, you get a credit card, there was a capped interest rate, which is very low. And then they ended up passing a law that made it so the credit card companies can set whatever interest rate they want. That’s when you get a credit card offer, they’re like 35 percent interest rate, and you’re like, what?

Where’s the protection for us? There are some, it’s by state too in the US. There are some laws in place on personal loans, but on credit cards there’s not. You can do infinite APR, it doesn’t matter, they can do whatever they want. But you could imagine what was happening back then, somebody would be in a super desperate situation, and then they would say, great, I loan this to you, now the interest is a hundred percent a day, or something outrageous. They’re calculating what he can’t pay and they’ll just keep it.

So this recurring tension between government need and private power would eventually echo in the United States of America, where deep suspicion of bankers shaped early financial policy in the rising of the United States. By the 17th century, the complexity of global trade required an institutional solution to frequent crises and currency shortages. Sweden was actually the first to establish a central bank, in 1668.

It’s interesting. When you first were talking about how the churches were the initial banks, so when the Spanish ruled the world, they had all the spoils and dumped it into the church. I always thought it was because the church pretty much ran things. They had a king, but I think the church was pulling the strings. They’re like, you want to go to heaven, you do what we say. But then maybe they were dumping the money in there because that was their bank. I never actually put the two together.

I mean, if you are very much a believer, then you would say, of course my money is safe in the house of God. And in essence, to take all the BS out, it should be safe there. That’s the moral fortitude of the civilization, that belief system. If it’s not safe there, then you guys are done.

So that was 1668, where Sweden made the first central bank of their country. Then right afterwards in 1694 was the creation of the Bank of England. And these institutions introduced a transformative idea, which was a single bank could hold the reserves of the nation’s smaller banks, issue notes, and act as a lender of sorts during panics.

I wanted to pull this up because I like to make sure we are all on the same page. So the definition of a central bank is a national institution responsible for managing a country’s currency, overseeing its money supply, and implementing monetary policy to ensure financial stability. It achieves this by setting interest rates, regulating commercial banks, and acting as a lender of last resort to provide liquidity during financial crisis. Pretty much what Eric said, just a little bit more work.

And then the main goals are typically to maintain stable prices, which means controlling inflation, which clearly we’re not doing well, and then promote maximum employment. So it’s set up as a system to prevent heavy fluctuation in the country’s economic system.

So the Bank of England in particular became the model that would go around the world later. It lent to the government, it managed public debt, and it ensured the convertibility of paper notes into gold. Paper notes being debt. Other nations followed suit. France with the Banque de France in 1800. The Netherlands with the Netherlands bank. Each was partially private yet served public.

So isn’t that funny how all of them are private? All these national institutions are privately owned companies. Funny how that works. These early central banks stabilized commerce and reduced the frequency of financial collapses, but they also centralized immense power in a small circle of people.

See, that’s why I think technically a central bank shouldn’t be owned by the government, because then that gives them unlimited power. But I think maybe a better system would be like the Green Bay Packers, where every US citizen owns a 350-millionth of a percent of it. And so the people technically are the shareholders. And that way it’s not Joe Blow banker guys who own us.

So rumors of secret influence surrounded them from the start. The Rothschilds, of course, here we go. They actually established multiple banks in several European capitals. They became a symbol of wealth so vast it seemed unnatural, like infinity. Tales of their hidden hand in wars and revolutions spread widely, and whether or not people believed, they revealed a profound fear, which was that those who controlled money could in fact control our government. Well, they do, a hundred percent.

Centuries later, such fears would resurface in debates over America’s central bank. Well, an even bigger fear is that, not even just to control the country, it’s that they are instigating war. It’s the biggest money maker. You fund both sides, and it’s all cash. The government needs money for that, so where are they going to get it?

So after the American Revolution, the young United States faced chaos in its finances. If you dove into the history of America right after the revolution, like the rebuild, George Washington became president, Thomas Jefferson, all the boys. They had major finance problems. There was no bank set up, and our economy was not as robust as it is now. You had to get trade set up, then trade agreements. It’s probably a circus show.

I just recently watched something on it, it was fantastic. It went over how right after the war we had to disband the army, because we couldn’t afford to keep the army going. And we were surrounded. To the north was the British, then you had the French, because Louisiana was half the United States. And then you had the Indian quote unquote problem. You’re like, oh, we won, boys. With no army.

So there’s actual problems that existed that we needed to solve as a young country. And each state issued its own paper currency. Can you imagine the logistical nightmare of that? You had North Carolina money, and then you crossed over and your stuff is no good. It didn’t quite work, or at least you needed somebody to convert it. So to fix this, Alexander Hamilton proposed the Bank of the United States, and that was in 1791. And it was in fact modeled on the Bank of England.

It was designed to manage government debt and issue stable currency. Yet many Americans, including one by the name of Thomas Jefferson, saw what we wanted to have, which was small government and not the instrument of tyranny, which was big government control, which is the whole reason this place exists. So when the bank’s original twenty-year charter expired, Congress didn’t even renew it. They’re like, we got us out of the swamp, we’re good to go, boys.

But then came along the War of 1812, and it exposed the folly of having no institution, because then they immediately were like, we need money. And that was their only solution. The governmental systems don’t have a place. Imagine the US government’s like, cool, we need to build some roads, and we don’t really have the cash for that. What, you submit a proposal to seventy private banks, but they don’t have enough money each, so your loan is comprised of eighteen loan holders all to do something.

So really, one thing I wanted to make sure we all knew is America was an experiment. We didn’t really know what we were doing. We just knew what we didn’t want. We didn’t want taxation without representation. We wanted to run our own place, we wanted states rights. But we didn’t know how to solve a lot of the problems.

And so then came along the second Bank of the United States. That’s what it was called. They literally called it the Bank of the United States Junior. It was established in 1816. It quickly became the most controversial entity in America. President Andrew Jackson, a veteran of the frontier, viewed the bank as a monster serving the interests of eastern elites. His battle against it, known as the bank war, culminated in 1832 when he vetoed its recharter and withdrew all government deposits.

Supporters of Jackson celebrated this as a major win against the tyrannical banking system. But again, the victory was short-lived. Without a central authority, the US banking system fractured. It’s such a catch-22. It sucks, but then how does the work-a-day world work without it, or without something like it? We have not figured out a solution otherwise.

Well, the thing is, the government can’t have complete control over it, otherwise whoever’s in charge can just do whatever they want willy-nilly. But then you have a private thing and they’re doing whatever they want. So it’s bad either way. So at this point, thousands of small banks across the country in their own states had no central authority and started issuing their own notes, each worth different amounts, depending on your reputation.

So you actually have chaos. And in addition, there was no organization trying to stop counterfeiting. It was probably so easy. I would have been rich, just balling. They’re like, looks fine. Sean, I got this new thing, it’s called a printing press. Trust me, I just took a loan out for it. It’s going to pay us in spades. This is called the Asheville Note.

But every economic downturn led to panic. Farmers lost savings, businesses collapsed, credit evaporated. Then something came along that destroyed a lot and the chaos went even further, and that was the Civil War. So we didn’t have a banking system, and then all of a sudden we need to pay for a war that’s not against anybody. It’s against ourselves.

Can you imagine trying to do interstate trade? You’re like, I’m trying to sell books to Georgia, and they’re like, we’ll pay you in Georgia pesos, and you’re like, wait, I only take green backs. Well, screw off then, we’re not going to do it.

Well, at this time they knew they needed to do something. So they created a national banking system and they introduced greenbacks. That’s when money started to be American currency. But is this through a central bank? Not even. They created the fourth iteration of the central banking system. So that solved one problem, but it did not solve a critical flaw, which was that there was no mechanism to provide emergency liquidity or funding during times of chaos, meaning war or famine or a natural disaster or epidemics.

So just to give a present day example, COVID. They had no, and in the least, I don’t know if it’s good or bad, maybe I’ll get some heat for this, but at least we had the ability to fund something during major events. And what Eric means when he says liquidity, because a lot of people might not know, it just means the ability to exchange something for money.

So for example, you’re in war times and there’s no banking system set up and you’re like, oh, I have all this cash in this bank. And the bank’s like, well, sorry, we can’t, we lent it and there’s no liquidity, there’s no money we can give you. So then people are like, what? Anyways, we’ll get deeper into that.

So throughout the late 19th century, America endured one banking panic after another. These were actual quote unquote recessions and/or major crashes. 1873, 1893, 1907. It’s like every twenty years it’s a major meltdown. To ordinary citizens, it seemed that Wall Street bankers profited while everyone else suffered. Politicians seized on that anger. William Jennings Bryan’s famous cross of gold speech captured the fury against what many saw as an unholy alliance between government and high finance. Wall Street always gets theirs.

There’s one quote, and this is from Thomas Jefferson. He said, I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent that their fathers conquered. Does that not resonate with you? My lord.

In October of 1907, a speculative scheme to corner the copper market failed, triggering a chain reaction of bank runs. Now, a bank run would be, let’s say all of a sudden we are terrified about the cash that’s in our bank account. Everyone’s going to take it out. You go to the ATM and take all your cash. You’re not taking some, you’re taking all of it. That would be an example of a bank run.

This happened maybe last year. There was one bank. Do you remember Wachovia? That was 2008, the 2008 crash. I think there was a moment where I was like, should I go to the bank? You can just take it all. I wasn’t with Wachovia, but there was a moment. And then during COVID there were a few other ones, smaller banks. Put it under the mattress, maybe that’s a little better.

So depositors lined the streets desperate to withdraw their savings accounts. With no central bank to coordinate rescue, the entire financial system teetered on collapse. Into this chaos stepped a man by the name of JP Morgan. He was at the time the most powerful banker. He convened a secret meeting of financiers in his library, compelling them to pool resources and stabilize the markets.

Now the thing is, if you are a conspiracy theorist, the preface is that JP Morgan orchestrated this, that this was all part of the plan, in order to reestablish a central banking system. In essence creating a crash, a crash so big that they didn’t have a choice. So Morgan’s intervention worked, barely. The episode exposed a terrifying truth. The US economy depended on the goodwill of one or two men.

The crisis convinced lawmakers that reform was necessary. Congress created the National Monetary Commission to study foreign banking systems and recommend a change based on that study. Its chairman, Senator Nelson Aldrich, toured Europe and returned convinced that America needed a central reserve. But the question of how to create it without enraging an anti-bank public would require an extraordinary act of theater.

So now we come to 1910 in November. Aldrich is the senator who was in charge of this National Monetary Commission. And whenever there’s a commission, I instantly just don’t trust it. It just sounds like instant corruption. And this is the heart of a conspiracy. Closed door, here we go. Closed door homies.

So in November of 1910, Aldrich arranged a secret meeting on Jekyll Island. First off, it’s just weird that it’s called Jekyll. If you don’t know the story of Jekyll and Hyde, it’s about a guy who is a two-faced individual who has a monster as an alter ego. Dr. Jekyll and Mr. Hyde. And so it’s just a weird coincidence. It’s also what a jackal actually is, the animal’s a scavenger that picks at the bones of a corpse. And really, the crux of the story is, is he Jekyll or is he Hyde?

So this island, Jekyll Island, I’ve been to that island. It’s off Georgia. Like either right before or right after Savannah, I forgot. But it’s a vacation spot-ish. It’s pretty cool though. We went to the shore and the trees look like they’re supposed to be like that. They look scared from the water or something. It looks really cool.

So traveling under assumed names, he and a small group of bankers and officials boarded a private train. They pretended to go on a duck hunting trip. Why do they have to be so shady, like really need an alibi. Among them was Paul Warburg, a German-born banker steeped in European monetary systems, Henry Davison and Frank Vanderlip of the great banking houses, and a Treasury official. So this is already ultra sketch.

For ten days, they drafted a plan for a US central banking system. Warburg argued for an elastic currency that could expand or contract with economic demand, and for regional reserve banks to prevent all power from being concentrated in New York. So their solution was a hybrid, a network of regional banks governed by a central board. So it’s like Bank of America and others, but then the Federal Reserve is the oversight. There are Federal Reserves, there’s twelve of them. So they created these. But the way it works is each one of those gets represented in the board, that way it’s theoretically fair.

To make the idea politically acceptable, they decided not to call it a central bank. They proposed a neutral sounding name such as the Federal Reserve. This is a name they’re really going to trust, the People’s Bank of America. Strangely enough, the Jekyll Island meeting was not actually discovered for twenty, thirty years. At the time, Aldrich and his colleagues feared that public knowledge of Wall Street’s involvement would doom the proposal.

In later years, however, the hidden meeting became the stuff of legend. For conspiracy theorists, it confirmed the worst suspicions, that America’s monetary system was born not in Congress, but in private by private bankers. Little duck hunting trip, little beers later. I wonder how long the charter is for. They make it like two trillion years. I don’t think there is an infinity end.

Aldrich introduced his plan to Congress in 1912, but it faced fierce opposition. Democrats led by Woodrow Wilson insisted that any new central bank must be under public control, not private control, or Wall Street’s control. I agree with that a hundred percent. After months of debate, the compromise produced something called the Federal Reserve Act, which Wilson signed December 23rd, 1913.

And here’s what it was. The system consisted of twelve regional reserve banks, each serving as a banker’s bank, overseen by a board of governors in DC. This structure balanced local independence with national coordination. Member banks were required to hold reserves in the system and could borrow in times of need. The Federal Reserve was empowered to issue uniform currency, Federal Reserve notes, and to serve as a lender of last resort.

Although the Reserve Banks were technically owned by their member banks, they were chartered by Congress and subject to federal oversight. It was essentially a hybrid institution of publicly owned and privately owned. This unusual design has fueled confusion ever since. Critics see it as proof that the Fed serves private interests, while defenders argue that it allows expertise and flexibility.

I saw an interesting thing. So we have the Fed, but then how does the government still lend money to the public? You can still buy bonds. So you buy a federal bond. The federal bond isn’t issued by the Federal Reserve, it’s issued by the federal government. So you’re buying in essence, what’s a bond? A bond is in essence the federal government selling you debt. So they’re like, cool, you pay us money and then we owe you this money and we’ll pay you interest on it.

And it’s usually a longer term when you’re buying bonds. So they’re like, okay, we’ll pay you a certain amount of interest and then at the end of the term you get all the principal back, but for the length of the term all you’re getting paid is interest payments on that money. So then how are they selling debt? It’s not debt against commodities. It’s debt against debt. You’re literally buying debt against the debt of another.

Correct me if I’m wrong though. Let’s say Sean wanted to borrow money from me. A million dollars. And I said, I don’t have the money, but I really want to loan it to Sean, because Sean’s going to pay me ten percent. So then I get a loan, borrow the money, and I pay him five percent. That’s literally what it is. They’re actually doing that. And he lends me the money, I pay him five percent, and you pay me ten. I made five, you made five.

Because the thing is, the US government doesn’t actually produce anything. The only way they actually get income is from your tax dollars, which they always spend. So what they’re doing is they use your tax to pay the interest on the money that they’re borrowing from the Fed, but then they’re using the Fed money to pay you the interest on the bonds that you’re paying them money for. How many plates have to be in the air before we’re like, whoa, this is not a legit system here, boys.

I think it’s really important, and we had talked about it a little bit before, which is about the gold standard. What does the gold standard mean? And this is the perfect part to do it because it’s at the same time. So long before the Federal Reserve existed, the world relied on a simple idea. So in order to keep money honest, gold backed it.

The gold standard, as it was called, was a system that tied a country’s currency directly to a fixed quantity of the precious metal that they had. It represented a promise that paper money could always be redeemed for gold upon demand, which is a valuable commodity. And it ensured that the value of currency was tethered to something real. Gold. Not tethered to a figment of your imagination.

At its heart, the gold standard was about trust. A government’s paper money held meaning only because citizens believed that if they wanted to, they could pull the gold from the money. You go to a giant gold reserve. We used the gold standard for thousands of years. Everyone used a gold standard. It’s solid, it’s immune to political manipulation, because it’s a physical commodity that you can actually have.

And it was also used across the world. So no matter if you’re trying to go get currency in another country, you can still have that same confidence. Even with the ancient currencies, the coins were minted in these metals. So even if you couldn’t, you still had the coin itself. It had intrinsic value. It wasn’t just paper. And you couldn’t counterfeit it. It didn’t corrode.

I saw this crazy video, I could not believe it. Do you know why there’s ridges on the ends of a coin? So on a coin there’s all the ridges. Apparently when they were first minting coins, before the current ones, they used to be minted in more precious materials than they are now. Pennies used to be literally copper. Now it’s zinc and all these other cheaper metals.

So what people would do in the beginning, they would shave off the edges and accumulate all these shavings, and they would melt them down to bullion. Then you would have ingots of these precious metals and you sell them and get paid. They were literally shaving the coins. They were doing it illegally, back alley, shaving these coins off. So then they created the ridges, because you couldn’t clip the edges anymore.

So while the use of gold as money dates back to ancient Egypt, the modern gold standard took shape in the 19th century. Britain formally adopted it in 1821, establishing the pound’s value in terms of pound sterling. And a pound of it, literally, that’s why it’s called pound sterling. So obviously that’s silver, but gold, silver, same. Other major powers soon followed, recognizing that linking their currency to gold fostered confidence in trade and investment.

That’s what we talked about in the beginning of the episode. Currency is literally an idea backed by confidence. People are confident that the precious metal was going to be worth something because we like shiny stuff. And what gives you more confidence than a big Fort Knox of gold? By the late 1800s, most of the industrialized world, Britain, France, Germany, and eventually the US, operated under some form of the gold standard.

This created what historians later called the classical gold standard era. It lasted roughly from the mid 1800s to the early 1900s. And during this period, international trade flourished. Exchange rates between major currencies were stable because each was defined by the same metal. So everything was the same. So even if you go to a place and there’s an exchange, the rate was based on how much of your currency was equivalent to the same amount of gold.

For example, if the British pound was worth so many grains of gold and the US dollar was worth fewer, the exchange rate was simply the ratio between them. Super basic. There’s no inflation. Inflation doesn’t exist. You can’t print gold. You can’t just create more gold. Money could flow easily across borders and merchants could plan their transactions with confidence. Under the system, a country’s money supply was limited by the amount of gold it held in its reserves.

See, what a great system. And that’s an important thing to remember when you’re thinking of economics. A country’s money supply was limited by the amount of gold it held in its reserves. You cannot inflate the currency. If a nation exported more than it imported, gold flowed in, expanding its money supply and stimulating growth. And that’s how it happened, because you actually brought in more physical gold. So therefore you can have more currency based on actual production. It’s like a legit commodity.

If it imported more than it exported, gold flowed outwards, contracting the supply and forcing prices down. A self-correcting mechanism. In theory, it was elegant, mathematical, and disciplined, because you can’t really mess with it. In America, the path to gold was turbulent. The Civil War had forced the government to print unbacked greenbacks. It was a hope, like, please, I promise you this is good. It is kind of funny, you’re printing it on the hope that you’re going to win. Well, if you lose, it doesn’t matter, everybody’s done.

But that was to finance the conflict, leading to inflation and distrust in paper money. So before the Civil War, you could buy a cool hat for a dime, and then afterwards it was a quarter. And you’re like, this is crazy. We do it now, we’re like, oh man, groceries are so crazy now. I remember when I was a kid, my mom used to be able to get a full tank of gas, I’d get snacks, and she’d get it all for twenty bucks. Now twenty bucks gets me one day of travel on my truck.

We should do a mini on this one. But what hasn’t gone up is TVs. They’re getting progressively cheaper. I had bought a big screen television one time, I think in ’93, ’94, whatever. Seven grand. When I lived in Kentucky, this was 2001, or maybe ’99. There was a six-man team to bring this. It was the biggest thing I’ve ever seen. My mom had like ten G’s on this TV, and it weighed four thousand pounds. I was at Costco and you can buy an 80-inch for 299.

I was at Target, I was like, should I just buy one because it’s too cheap. Do I need one in the bathroom? I might. Let’s just put it in the bathroom. I bought like two years ago off Amazon Black Friday, a 47-inch LCD. I got two, they were like 250 bucks. It’ll be delivered tonight. I’ll have it in the garage just in case that one breaks down. My current TV is starting to get a little slow because I run the internet through it. It’s time. Go for the 85-inch now. Well, my house is too small. If I had an 85-inch my retinas would be melted off.

Anyways, maybe we’ll do an electronics conspiracy, a little mini, like what the heck is going on over there in Taiwan. We went the opposite way of what’s actually happening, which is inflation, not inflation, or technically it’s probably technology advancement.

So after the war, the country spent years restoring confidence in the currency. In 1879, the United States officially joined the gold standard and pledged that each dollar could be exchanged for gold at a fixed rate. So in 1879 we said, we have enough gold to back up the currency that’s out there. For decades, this policy brought stability to international trade, but turmoil at home. Whenever gold reserves fell, often due to trade imbalances or financial panic, the US Treasury was forced to tighten the money supply.

This contraction made credit scarce, driving up interest rates and pushing farmers and small businesses towards ruin. The recurring depressions of the late 19th century were in part products of the gold system’s inflexibility. Politicians seized on this hardship. That gold speech we talked about, in 1896, captured the agony of farmers crushed by deflation. He said, you shall not crucify mankind upon a cross of gold. He denounced the gold standard as a tool of the bankers and industrialists. So it’s basically both sides of this story. Somebody is saying it doesn’t work.

Well, I understand. The sad part is there is no perfect answer. There is no solution, theoretically. The gold standard does in its own way work, because it is a finite resource, like Bitcoin. It’s finite, and the value is determined by how much you have. But there is that inflexibility, and it’d be very easy to just tank countries. You can just nuke countries out, like, oh, we had a bad soybean crop this year boys, and now we’re bankrupt because we had to import all of it and we have no currency left.

But here’s the question, if this was my own finances. Let’s say we pay the bills from our job, you can pay your bills, everything’s fine, you’re not necessarily rich, but you should have reserves. You have a credit line open, you have the ability to pull money. But if you adhere to a strict, I never touch the credit line because I cannot afford the credit line, it’s there for emergencies. So an emergency happens. What is the right choice? Do you man up and figure it out, or do you pull the credit line to handle the emergency? And that’s what’s been happening.

Is that COVID? No, take it a step further, the banking system in 2008. No, but should we have just hunkered down and been like, you know what, we’re not going out to sushi tonight. Well, the thing is, you can’t blanket that situation. 2008 was obviously something we knew was happening and they let it happen. It’s not my fault that they were giving loans to crackheads for a million dollars to buy a mansion. I shouldn’t pay the price for that happening. That’s not my fault. I do want sushi, god damn it.

And the same thing with COVID. Yeah, that stimulus check helped me for two weeks, thanks for the two weeks of help. What about the rest of the years? It was really two years. So would I have rather hunkered down and figured it out rather than get literally what equated to two weeks of groceries? Yeah, I would have. Creating six trillion dollars worth of more debt, for what? I would have figured it out.

Sure, if that helped people, and I’m not trying to be a jerk, but in my opinion, maybe it should have just been a happy medium, where it was not a handout but an emergency resource, but not as extreme to do so much printing. Maybe just don’t bail out all these corporations and all the banks. Instead of trillions going to them. I know, but we work for the corporations. No, but look how many people lost their jobs anyways. Even though they got bailed out, you’re still fired. They’re looking at the P and L, they’re like, we got to cut costs, boys.

I was just trying to go, like, does it work? If somebody came over and said, hey, you three need to figure out the system that would work. And the thing is, I don’t think that the entire banking system is evil. I think there are evil people in it, but I think that they make decisions for the most part trying to help. I don’t trust the government, I don’t, but I do think that people in general, the vast majority, individually are trying to help people.

So I’m sure at the time, with the stress, everyone’s freaking out, that was to them the most beneficial thing for the people. I’m not saying they’re wrong, they tried to screw us. I think at the time they thought it was the best thing to do. So I don’t fault them for being like, we think this is the best thing to do.

Well, when World War One erupted in 1914, the gold standard cracked under the strain of war finance. Nations needed to print money far beyond their gold reserves to pay for troops and ammunition. Many suspended gold convertibility, effectively admitting that discipline had to yield to necessity. The old order was gone, replaced by a wartime economy built on debt and promises. This is the military-industrial complex, literally.

But granted, this is when America became the powerhouse, because we were making most of the munitions. We were printing that out, we were getting paid. That’s when we got the surplus, we were killing the game. After the war, countries attempted to return to the gold standard, they wanted the stability that was before. Britain restored it in 1925 under Winston Churchill, setting the pound at its pre-war price conversion.

But the world had changed. Prices, debts, and wages no longer fit the old ratios. By fixing currencies at unrealistic levels, governments sowed the seeds of deflation and unemployment. That’s also, quick note on the gold standard, another thing that’s not factored in is population. As the population increases, gold is a finite resource. So imagine if Bitcoin was the currency of the world, and we go to ten billion people, twenty billion. There’s less currency to go around. In theory it’s supposed to move over a decimal point. The more in use, the more individual fragments of it become usable.

In the United States, the Federal Reserve, created just a year before the war, was caught between loyalty to gold and the need to stabilize the economy. And then the Great Depression hit in the 30s. Adherence to the gold standard proved wrong, or at least the system was manipulated. That’s when they had the giant gold buyback, where they pretty much said, bring your gold in, and they bought back all the gold.

And so as banks failed in the 30s, panic spread and then the gold actually left the US, because they lost confidence. And to defend its reserves, the Fed tightened credit when the nation needed it the most. So that result led to further depression. It was the worst. That was not a fun time to be alive.

President Franklin Roosevelt created something called the New Deal, and it was reform in the 30s, and it reorganized the Fed. The power shifted from regional banks to the board. So the idea was cool at the very beginning. Super cool. But then it just kind of opened the door, putting the foot in of full central control. But then you go into the board and the board’s just a bunch of rich guys anyways.

So power shifted from the regional banks to a stronger central board, and the institution became more closely aligned with the treasury of the government. And during World War Two, the Fed kept interest rates low to help finance military spending. It’s so funny that we have a Department of Treasury, that should just be called the Department of Debt. We don’t actually have money in the Treasury.

In 1933, Roosevelt took the boldest step in modern monetary history, and he severed the domestic link between gold and the dollar. Americans could no longer exchange paper money for the metal, and private ownership of gold bullion was outlawed. Outlawed? You couldn’t go and own it? I didn’t know it was outlawed. It was confiscated. You had to turn it in. I mean, you would get compensated for it, with fake money, with notes, but you could no longer do it.

So the government fixed the price of gold at thirty-five bucks an ounce, and it devalued the dollar, but it freed up monetary policy from being connected to gold. So now we can print more, if we need it. Super controversial. It’s also like, that happened because now the citizens don’t actually have any real currency. So if things go tits up, who’s the only people who have real currency? The people that they consolidated with.

And there’s a big thing about the Rothschilds actually controlling the gold industry completely. In essence, they’re the ones who manage and set and manipulate the price of gold, because they own the gold industry. But the decision by Roosevelt was extremely controversial. Critics accuse Roosevelt of debasing the currency and betraying the sacred promise of sound money, where it was backed by gold. Because also, the government would not be held accountable for Fort Knox. At that point they don’t have to manage it.

I think the current law is, right now, if you put your money in the bank, the bank is legally obligated to hold a certain percentage of your money in the bank at all times, and the rest of the money they use to invest. I think it’s like twenty percent, or some stupid amount. So it’s like, hey, I’m going to give you a million dollars. And they’re like, cool, we’ll keep 200k for you and then we’ll just spend the rest. Literally, we’ll give you two percent a year. Which sucks.

So that’s why the system is kind of messed up. How are they able to literally gamble your money away? It’s like you’re giving your money to your shitty cousin who’s got a coke addiction, and he’s like, well, I’ll keep twenty percent of it, bro, it’s all good. I just think it really opened the door to shady underbelly work. Like you can do whatever you want now.

So I definitely consider it, I would love to have a conversation with somebody who’s a little bit more knowledgeable on it, with Roosevelt, because I really love Roosevelt, except for this. I hate this. I went to Roosevelt’s presidential museum. It was amazing, fantastic. But again, I love him but I hate this so much. It’s bad policy.

Well, there you go. We’re going to pause here and we’re going to turn this into a two-parter, because we have a lot more to go over, as we’re basically in the 40s right now. We’re setting the stage. We’ve severed the gold standard. We have now essentially won the war, and then it’s going forward from there and leading up to what the Fed is like today, and the conspiracies that go into that.

We also tie in, the Titanic has a couple in here. We talk more about Jekyll Island, what happened there. And then there is a theory, and I want to dive into it more and we might actually do a full episode of it, which is, are there a few bad guys running the planet? This might be where we can touch on it and dabble a little bit. Maybe there are a couple bad ultra elite dudes, manipulating. Ten families that are doing nefarious stuff. Anyways, there you go. That is episode one.