What does it mean to “control money” in a general sense? Wouldn't that be like 'controlling sand' or 'controlling the waves of the ocean'? This is precisely where our generally accepted understanding of money breaks against the cold hard shores of reality. The fact is that money is not a physical object, or not merely so. It is a medium of exchange. It is a store of wealth. It is a measure of value. Fundamentally, it is an idea.
Henry Kissinger has been oft-quoted as saying: “Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world.” Regardless of whether or not he ever actually said such a thing (there is no source for this alleged quotation), it is nonetheless an apt observation. In fact, it is true almost by definition. Anyone who disputes this has never attempted to live in hunger, or without energy, or without money.
Let's focus on the final part of the statement: “who controls money can control the world.” This assertion may seem obvious at first glance, but let's make sure we truly understand what it is saying. What does it mean to “control money.” This is evidently something different than merely accruing large stores of money. I could store up billions of dollars in my bank account, but the only money I can rightly be said to “control” is my own, if we are thinking of control in the sense of possession. (Actually in this example the bank would technically “control” it in the possessive sense, as the people of Cyprus could attest, but you get the idea.) So what does it mean to “control money” in a general sense? Wouldn't that be like 'controlling sand' or 'controlling the waves of the ocean'?
This is precisely where our generally accepted understanding of money breaks against the cold hard shores of reality. The average person is accustomed to thinking of money as those slips of cotton-linen “paper” that populate our wallet: the yens or Euros or pesos or dollars that we use in our day-to-day transactions. After all, that's what we get when we draw money out of an ATM, and that's what we hand over when we make our purchase at the local store. But if we stop and think for even a moment, we realize that this can't be fundamentally what we mean by money. After all, people use their debit and credit cards more often these days than they do cash, and when was the last time your employer handed you your monthly pay in paper bills?
The fact is that money is not a physical object, or not merely so. It is a medium of exchange. It is a store of wealth. It is a measure of value. Fundamentally, it is an idea. Physical objects can only be “controlled” through possession, but ideas can be controlled more subtly, and more centrally. All that is needed is to control the understanding of that idea. And this, it turns out, is not nearly as hard as you might think it would be.
To understand the development of this idea, we need to examine some history. Specifically, the Battle of Beachy Head in 1690, part of the Nine Years' War that pitted King Louis XIV of France against most of the rest of Europe. The Battle of Beachy Head was the French navy's single greatest tactical victory in that war, sinking upwards of 11 English and Dutch ships without the loss of a single French vessel. Realizing (correctly) that England's dominance rested on its ability to control the seas, King William III committed his court to rebuilding the English navy. There was only one problem: money. The government's coffers had been exhausted by the waging of the war and William's credit was drying up.
Luckily for him, there was a plan on the table for the crown to raise the funds in one fell swoop. William Paterson, a Scottish banker, made a proposal in 1691: “to form a company to lend a million pounds to the Government at six percent (plus 5,000 “management fee”) with the right of note issue.” By 1694 the idea had been slightly revised (a 1.2 million pound loan at 8 percent plus 4000 per annum for management expenses), but there was enormous resistance to the idea from a wide cross-section of the opposition who feared how much power a national bank would put in the hands of the crown. As a result, it was slipped in as a part of the Tonnage Act of 1694 (a bit of legislative deception that should be only too familiar to us in our modern era) and passed. The 1.2 million pounds was raised in 12 days, half of it going toward the rebuilding of the navy.
The process by which the Bank of England established itself as the national bank we know today took centuries, but in effect realized the worst fears of the bank's original critics. Originally, the bank's charter required renewal every 12 years, and extensions of that charter were usually conditional on the bank providing more loans to the state. By the 18th century, the concept of the National Debt had been formalized, and the bank managed that, too. In 1780, London rioters tried to storm the Bank of England, and for the next 193 years it was patrolled nightly by a detachment of soldiers to protect the gold reserves. In 1844 the bank was given the sole right to issue banknotes with the exception of those private banks that had already been issuing them. In 1946 the bank was nationalized, nominally removing it from private hands for the first time. Today it functions as a central bank, attempting to “regulate” monetary and financial stability through the setting of interest rates. It is also the world's fifth largest gold reserve custodian, holding 4600 tonnes.
The “nationalization” of the bank in 1946 is an intentional red herring to make people believe that it is now owned and controlled by the government of Britain. In fact, the true inner workings of the bank and its ultimate chain of control remains shrouded in secrecy, obscured by its royal charter and protected from the prying eyes of the public that supposedly owns it by the official secrets act. In 1977, it set up a a subsidiary called the Bank of England Nominees Ltd., which has never traded and has only issued 2 of its 100 shares. It was created to hold shares confidentially on behalf of “heads of state” and “certain others” who have never been disclosed, and was from its inception granted special exemption from legislation requiring corporate disclosure.
The process by which a privately owned bank (with only a handful of initial investors) came to control and dominate the purse strings of the government behind the largest empire the world had ever known is an important one, because the Bank of England became the template for central banking which today holds in almost every country in the world. And from its very inception, the fledgling American republic found itself at war with the Bank of England for control of its own finances.
During the colonial period, cash (which at that time consisted of coins and paper money denominated in pounds, shilling and pence) was often scarce, necessitating the use from time to time of commodities like beaver skins and wampum to facilitate transactions. To stimulate their economies, colonies began issuing their own bills of credit to make up for the cash shortfalls. Some of these colonial scrips were very successful, but the appearance of this extra money in the system had the result of depreciating the currency, meaning that creditors in England were losing out as their loans were being repaid with devalued money. The British government reacted with a series of laws meant to stifle the colonial currencies. According to Franklin, this was the real cause of the American revolution, not a trifling tax on tea. The war was primarily about the control of the money supply, and during the Revolutionary War the Continental Congress funded itself by issuing a paper money known as Continental Currency.
Although the currency successfully funded the colonies in their war against the British, it was the English who got the last laugh. They set up a counterfeiting operation that managed to devalue the bills to a fraction of their initial value, resulting in disaster for the newly-founded Republic. To deal with this disaster, Alexander Hamilton (the same man who believed that Washington should have become President for Life) successfully argued for the creation of the First Bank of the United States, consciously modeled on the Bank of England. It was, like the BoE, a privately owned central bank intended to “stabilize” the nation's credit and its currency.
To say that the Bank of England was in fact the winner of the American Revolutionary War is not far from the mark. The First Bank of the United States was succeeded (logically enough) by the Second Bank of the United States. When that was killed off by Andrew Jackson, the Bank of England contributed to a series of banking panics designed to convince the American public of the need for another central bank. After a lengthy and fascinating monetary and banking struggle, the BoE finally succeeded in the creation of the Federal Reserve in 1913. And for those who know the history of the Fed they will know that it, too, was created via a sneaky piece of legislative trickery that saw the Federal Reserve Act passing through the Senate while many of the members were gone for the Christmas holiday. Four years later the country found itself embroiled in the First World War (leading to Wilson's League of Nations and the creation of the Council on Foreign Relations) and 16 years later the country found itself in the midst of the Great Depression...the very thing that the bank was ostensibly created to avoid.
The First World War and the German reparations that resulted also led to another interesting piece of our current central banking puzzle: the Bank for International Settlements. In 1930, the BIS was founded by Germany, Belgium, France, Great Britain and Northern Ireland, Italy, Japan and Switzerland as a way to handle the reparation payments. It eventually became the organization it is today: a central bank for the central banks, and an international institution that by definition answers to know government or group of people. The BIS was identified by consummate insider Carroll Quigley, a Georgetown history professor and Bill Clinton mentor, in his 1966 magnum opus, Tragedy and Hope, as the heart of the conspiracy that he so painstakingly documented:
"The powers of financial capitalism had a far reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalistic fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks, which were themselves private corporations. Each central bank sought to dominate its government by its ability to control treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence co-operative politicians by subsequent rewards in the business world."
Sadly, this is the system that predominates to the present day: a system of interlocking central banks leaving international financial control in the hands of a few private bankers. This system, following the template established by the Bank of England, accounts for almost the entirety of the world economy, and it is this system that wields the real financial and political control in almost every country on the planet.
Which brings us straight back to the quotation attributed to Kissinger: “who controls money can control the world.” Does it make a little more sense now? The control of the money is achieved through a central banking system which itself is controlled by a few shadowy figures at the very very top. And through this system, they control the world.
But don't take my word for it. Just take one of those pieces of paper money out of your wallet and have a look at it. Who's signature is on it? Your president or prime minister? Or your central bank governor? And what does that say about who is really in control?