According to Luca Pacioli, a debt is equal to a credit and vice versa. If you owe someone $10 then you have a $10 debt and that person has a $10 credit. Money represents the connection between them. Therefore, debt + credit equals money. It's an easy concept to grasp, but one that is incredibly misunderstood. Throughout the debate about the public debt, only the debt is mentioned with no reference to the application of credit and money that has been created.

 

During the early 17th Century, Sweden was rich in copper wealth, producing as much as two-thirds of Europe's copper needs.

In 1644, Sweden started using copper plate money. A 40 pound copper plate was the equivalent of ten dalars worth of silver. The shortcomings of this system are obvious though. The heavy plates were bulky and inconvenient. They were replaced by "certificates" that were exchangeable for an equivalent copper value. The certificates were never considered legal tender in Sweden, but they led to the creation of the first European bank notes.

The first European paper money experiment

Bank notes are considered paper money, but there are other forms of paper money. The first European bank notes were created in 1661 by the Stockholms Banco in Sweden. The bank was founded in 1657 by Johan W. Palmstruch.

This bank note is dated 1666. Palmstruch engaged in dishonest accounting practices and created more bank notes than he could account for. The bank collapsed in 1668.
 

Palmstruch was arrested and imprisoned for "dishonest accounting." The father of European paper money died in prison in 1671. 

The first paper money

The first known paper money put into widespread circulation was created by the Tang Dynasty (618-907 A.D.) in China.

 

 

This 1380 Kuan note was made in China and is the oldest known bank note in existence. By 1455, after about 600 years, China abandoned its paper money experiment mainly due to hyperinflation. So many paper notes were created that they became utterly worthless.

The first coins

The first known coins were created by the Lydians around 600 years B.C. Lydia was located on the Southern coast of Asia Minor (Turkey) approximately half-way between Mesopotamia and Greece.
The first coins were made of electrum--an alloy of gold and silver. Each coin was hand engraved. They weigh about the same as a Washington quarter. The Lydians developed the 24 carat system of value and are believed to have established the first permanent retail shops. They were conquered by Alexander the Great and the Persian Empire. Much of what is known about this ancient society comes from the Greek historian, Herodotus.

Andrew Mellon

Andrew W. Mellon endured three economic depressions. After years of experience, he noticed that certain companies seemed to be crash proof. During general market declines, the stock dropped in value, but rebounded back faster. Why did certain companies seem to always bounce back faster? Ultimately, it came down to profitability. The most profitable companies were the ones that retained and returned value after an economic crash. Mellon was a conservative investor who earned a fortune investing in the very best companies.

During down periods in the market, Mellon would continue to purchase assets and simply wait it out. Often, the rebounds were unexpected and the economy would improve for reasons that nobody really understood. Mellon was Secretary of Treasury during the Hoover and Roosevelt Adminstrations. His conservative policies of lower taxes and reduced government spending are credited with helping to lower the public debt. He was criticized for his hand's off policies that included tightening up the money supply and allowing weak banks to fail. His final years of public service were spent renogiating European debt.

Liberty quarter

E pluribus unum means many united into one. This is in reference to the union between the states and federal government symbolized by a shield on an eagle's breast.

The Liberty quarter was struck 1916-1930

The 1917 quarter shows a bare-breasted Liberty

Later versions showed Liberty covered by chainmail.

This political cartoon from the 1864 campaign accuses Lincoln of military ineptness (after the Battle of Bull Run) and of running the printing presses at full speed. Salmon P. Chase was Secretary of the Treasury from 1861 to 1864 and worked to establish the first national banking system. The Greenback was created during Chase's term and is considered to be the basis for our current paper money system.

Chase went on to become a Supreme Court justice and was well known for his efforts at fighting slavery.

"The Fed"

 

 

If you search Wikipedia for "Federal Reserve," you might be surprised to find that there is no such entry. That is because the "Fed" is not an entity; it is a system.

The Federal Reserve Bank of New York is located on 33 Liberty Street. The President is William Dudley It is the largest Federal Reserve bank in terms of assets and volume.

Jaime Dimon is the Chairman of the Board of Directors. The Fed Bank of New York has the largest known gold repository containing nearly a quarter of the entire gold supply, weighing approximately 7,000 tonnes worth 415 billion dollars.

Why is gold so enjoyable to look at?

 

The first paper currency issued by the Department of the Treasury were Demand Notes Series 1861. The original "Greenback" was created during the Lincoln Administration. It is considered by some to be a "fiat currency" because its value is not connected to gold or silver. The first series Greenback is exchangeable for a government bond that pays 6 per cent interest per annum. The Greenback came with a red seal.

 

The above image is a counterfeit 1862 note. It was printed on legitimate paper, but has no red seal. Therefore, it is counterfeit.

 

Accounting is the processs of measuring and communicating financial and/or economic data for the purpose of making informed decisions.

Luca Pacioli is regarded as the father of double-entry accounting methods. Leonardo Da Vinci learned mathematics from Pacioli.

Pacioli's "The First Exposition of Double Entry Bookkeeping" is a ground-breaking work that explains the very foundation for modern accounting methods.

First printed in 1894, "Coin's Financial School" sold an estimated one million copies. "Coin's Financial School" provides a wealth of information about the history of gold and silver, including important legislation, the process of monetization and historical prices of commodities like gold, silver and wheat.

Anyone can achieve a state of financial wealth if they are willing to make the appropriate sacrifices. What kind of sacrifices are appropriate? Working hard, saving, working smart, learning proper investment techniques, understanding accounting systems, learning to discern between truth and ideology, developing math skills, reading, developing courage, etc. Devoting time to money is possibly the most important aspect. Being smart with your time is probably just as important. A money devotee may be found reading something like "Andrew Mellon" or "Modern Money Mechanics." You should be familiar with the thoughts of men like Adam Smith, Milton Friedman, Karl Marx, Benjamin Franklin and J.P. Morgan.

 You should hold a higher understanding of the meaning of terms like capitalism, finance, economy, investment, speculation, yield, dividend, insurance, contract, etc. It is much better to learn these terms for yourself instead of learning about them from others. Unfortunately, there is a wealth of mis and dis-information available on these subjects. Wikipedia provides much valuable information although some of the Wiki information can be incorrect or misleading. That is why it is so important to have an effective method to help you discern between reality and false ideology. Everything needs to be double-checked and confirmed. Never use a single source.  This is a critical key and is also one of the most difficult of all achievements. As humans, we are inherently fallible. In fact, we are surrounded by fallacies, but one can minimize this facet as opposed to developing it or enhancing it with a failed ideological perspective.

 

Notes of the Confederacy

 

Moneygasm

The following incredible photos come from a Southern California estate sale that was listed on Craigslist today. This is the most stunning private money collection I have ever seen (except for professional dealers.) The following photos are just a small part of the collection.

 

If  you do a Google image search of "money," this is the first image that you will see. It comes from Forbes and includes an advertisement.

90% of options traders lose money. Over 100 years ago, editor Charles Dow publicly called for an end to the practice in the Wall Street Journal.






 

Yield = Most recent full year dividend
                    Current share price

As share prices increase, yields decline. As yields increase, share price decrease. Yield is an important measurement of risk. Higher yields often mean higher risks. Stock market crashes or large negative price corrections tend to take place when yields on the DJI reach historical low levels (around 2%.). When yields start to move into the 7% -9% range, it tends to indicate that share prices will start moving up, pushing down the yield. History has shown that investors and speculators tend to flock to higher dividend paying stocks. The increased demand pushes up the price, gradually lowering the yield to more sustainable levels..

The stock market is so immense and complicated that nobody knows why it goes up and down, yet the television pundits will daily tell you that it is because of Spain or the fiscal cliff or Citigroup's earning report or some other thing that "makes sense." The truth is they really don't know, but they create a convincing claim to the contrary.

Don't get suckered by fools, salesmen or liars. The majority of investors are merely speculators. There is one very important fact that applies to the value of the stock market. As shown by the graph below, the general level of Dow Jones stock prices goes up over time. This graph goes back to July of 1885 and continues to 2112. 127 sum years of record. Buy and hold is a good strategy as long as you are willing to wait. It doesn't mean the company you invest in won't go bankrupt or that your rate of return will always be high, but if you pick a good, high quality company like Chevron, Walmart, McDonald's, IBM, etc., and are willing to hold it for a long time, you are virtually assured a profit.

Thomas Watson ran for President in 1904 as a candidate for the Populist Party. The Populist Party was a short lived party that was created in 1876 by farmers protesting low agriculture prices. The Populists believed that the political system had fallen under the control of the bankers and rich businessmen and acted against the interests of ordinary people. Famous advocates like William Harvey and William Bryant Jennings sought financial reform and advocated to repeal the 1873 Congressional Act that demonitized silver. Despite much popular support, the populists were unable to compete as a third party and their influence began to decline in the 30s. Roosevelt's New Deal spelled the end of the Populist Party.

The money supply is not a simple zero sum game. A trillion dollars worth of newly created dollars has absolutely no effect on the value of the economy if it is sitting aimlessly in a vault somewhere. Contrary to the observations of many, creating money doesn't debase the value of the current money supply if the additional money is not employed. That is what is occuring today as the Federal Reserve's excess NSA remains at near record levels. The banks have plenty of money to loan. They just don't seem to have the right customers. Also, the velocity of money has slowed dramatically. This also has to be taken into account when examining the money supply numbers.

 

 

Here is a totally cool five-hundred dollar Federal Reserve note.

A fool and his money are soon parted.


The greatest crime of the Century occurred in 1963 after Kennedy's death when the government discontinued the practice of printing its own notes (to pay off debt) and began to borrow all money from the private banks. The ultimate result has been the creation of  the largest debt in the history of the planet. No previous government has ever wielded so much power, yet owed so much debt. 

Mercury dimes rule!

Also referred to as the "winged liberty dime," the Mercury dime was struck 1916-1945. The 1916-D Mercury dime is the key date with only 264,000 issued. The 1917-D is the second rarest in this issue.

Some Half dollar porno

I love looking at these Liberty half dollars. Without any rationale, they are one of my favorite money designs. Same with the Ben Franklin fifty cent pieces.

1963 five dollar note

During 1963, two different five dollar notes were manufactured. One is a red seal U.S. note that the U.S. government used to pay its debt. The second note (bottom) is a Federal Reserve $5 dollar note that is used to put the U.S. government into debt. Eventually, the red seal notes that came in different denominations ($1, $2, $5, $20, etc.) were completely discontinued. Currently, only Federal Reserve notes are used for our paper currency. The rules for the usage of Federal Reserve notes also applies to digital money (money that is not currency.) In other words, it is assumed that an electonic dollar is a Federal Reserve note as opposed to a red seal note or silver certificate. (An additional note: it is interesting to see Lincoln's visage on this 1963 red seal. Kennedy was assasinated in 1963. Some have speculated that Lincoln was assassinated by international bankers...Kennedy too, although there seems to be no proof of either claim.