The Ahmadi Religion of Peace & Light

Money is The New “King”

April 2, 2022

  1. Money is King 

Money is the ‘new King’ in a world of capitalist gain but do we sense that economists only seek to blind us with complex models to keep us in the dark and hide the imbalance of wealth accumulation in the hands of a few? So let us try to see the wood for the trees so we can reveal the reality. Today we are facing rising interest rates which threaten to destabilize both asset values and the fiat currencies (those not backed by commodities such as promissory bank notes) in which they are priced. This outcome is feared by the elites who increasingly speculate about currency resets. So far, we have seen cryptocurrencies such as bitcoin, the introduction of central bank digital currencies and the de-dollarized Asian trade being proposed. Are these resets even feasible or validated? Except for a new currency proposed for cross-border trading purposes between Russia, its former soviet bloc states and China, legally none of them can have the status of a currency. Money is physical gold and silver, whilst banknotes and bank credit are exempt from property law. Stolen goods can be seized from innocent parties who have subsequently acquired them, but not currency or banknotes. With this exemption embodied in lex mercatoria (merchant law) a currency replacement is useless. The only replacement for fiat is a currency credibly backed by gold. And that is the legal position! The idea of introducing new currencies is driven by inflation and the consequences of fiat currency sanctions against Russia. In the immediate future we are faced with rising interest rates and a commodity price war between the West and Russia. Therefore there are plans for central bank digital currencies (CBDCs) to give the monetary authorities greater control over their economies. 

  1. Kingdom of the blind 

The problem is today we are all subjects in the kingdoms of the blind, at least in the monetary sense. Whilst some seemingly astute economists can talk up the merits of systems few of us have heard of, no one in charge appears to understand the root of it all, money. This crazy situation is understood by the rhetoric produced by central bankers. The role of money has been mulled over by philosophers and economists from the time we obliged one another in dealings. Over 2,300 years ago, Aristotle pbuh stated: “With regards to a future exchange (if we want nothing at present, in the future we will want something) money is, as it were, our security. For it is necessary that he who brings it should be able to get what he wants.” This was reaffirmed by Jean-Baptiste who said 200 years ago in his famous law which defined the role of money in the division of labour. The only form of money legal from Aristotle’s time until today is metallic. That is gold and silver coin or bullion which can be coined or weighed, the rest is credit. In the form of banknotes, credit is the circulating representation of money, which we call currency. Shockingly, since the end of Bretton Woods in 1971, gold has been removed as the anchor for currency value by promoters of fiat currency, which is now wholly dependent upon faith and credit in their issuers, who have long forgotten the vital role of metallic money. Metallic money was the medium of exchange and the responsible state position was not to replace it, but to standardize it. Surely the state has a fundamental duty to ensure the coinage was good and money’s representation as credit was sound? Inflation is crippling to an earnest saver, whilst Interest rates are a rising cost to a borrower, but for a lender who loses the use of his money, they reflect compensation for a risk the borrower might default. Included in the lender’s calculation must be an allowance for changes in purchasing power. The Fed, which bears responsibility for the world’s reserve currency, now finds itself unable to keep the lid on rising interest rates and against its will is being forced by markets to permit them to rise. All central banks are being pushed into similar decisions. They are uncomfortable with markets forcing their hand, and firmly believe that interest rates are an unnecessary imposition on state finances. Their response to market pressures is to try to enforce more control by redesigning their currencies. 

  1. The desire to redesign currencies 

No one could be more ill-equipped to design a new currency than self-seeking governments. They try to evolve currencies away from being determined by its users towards increasing state control. CBDCs are intended to be the equivalent replacement of cash with two key differences: “The central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank liability [i.e. cash], and we will have the technology to enforce that. Those two issues are extremely important and are a huge difference to what cash is.” Augustin Carstens – BIS General Manager But as a replacement for banknotes, a CBDC cannot share the legal status of cash today. Does he intend that the banks fundamentally change the laws to gain more control? Money, that is gold and silver, and currency in the form of banknotes and representative coins have a different legal status from all other property. If the true owner of money which has been stolen finds it is in the hands of the thief, he may recover it. But if the thief has purchased things in the shop and the shopkeeper takes it honestly in the way of trade and without knowing it has been stolen, he may retain it against the original owner from whom it was stolen. That is to say the right to the property in the currency passes onto the shopkeeper. This single exception extends to substitutes such as banknotes, cheques exchanged for money, currency, or credit, assimilated to money. In accordance with merchant law, It is the body of trading principles which evolved from the middle-ages along with trade as a system of custom and best practice in Europe. In this legal respect, money, currency, and credit are different from, say, stolen artworks or precious stones, which on proof of original ownership can be recovered decades later. The families robbed of their possessions by the Nazis are still reclaiming their property but have no claim on the stolen cash and bank deposits. The position of a CBDC appears to imply it would operate differently to that of cash & deposit currency to allow a central bank to control ownership and direct its use, as the quote above from Carstens suggests. The idea that a CBDC as a legal replacement for cash seems to fall down on this key point which the General Manager of the BIS appears to ignore. This is proved by commercial bankers who are unable to deal with payment fraud. If a bank customer finds his bank account emptied by someone who has access, it is a criminal act. But the property right to the bank deposit has passed with the stolen money whilst the bank with a valid instruction to transfer balances in good faith has no legal means of recovery. A CBDC does not appear to be a currency in this legal sense, because the right of ownership is subject to conditions imposed by another party — a central bank. In layman’s terms, banknotes are documents unconditionally entitling the bearer. Therefore, a CBDC cannot be currency in law, the term given exclusively to money or credit. Which, incidentally, applies in all post-barter laws from the time of Aristotle onwards. It is feasible, laws may be passed to change the status of a CBDC, just as it is possible a law can be passed to force everyone to wear a hat. But how can that new law benefit society when its intent is to undermine the whole basis of trade? It represents credit and nothing else. As Carstens points out, cash, by which he means banknotes, is a liability of a central bank. To this we can add bank accounts, which are credit given by a commercial bank to its depositors. And a commercial bank’s reserves held at a central bank are the liability of the central bank with the same status as the central bank’s banknotes. Almost everyone also ignores the opinions of commercial bankers at the prospect of having their business taken from them by the state. We should remember that in America, host to the world’s reserve currency, the largest contributors to the politicians’ coffers are the banks. That alone should ensure the enabling legislation will never get off the ground in America and therefore for every other major currency which regards the dollar as its reserve currency. If merchant law is taken away from currency, the right to currency or bank credit may well be reclaimed as property stolen from a previous owner. We already see a precedent with cryptocurrencies which are commonly seized by governments who suspect they represent the proceeds of or have been used to facilitate a crime. The US Asset Forfeiture Policy Manual (2021) states that “most crypto currencies have a blockchain… Using open source or subscription analytical tools, cryptocurrency transactions can be often traced through their blockchains.” In other words, a US resident having purchased it in all innocence can have his cryptocurrency seized. The problem the authorities have is accessing wallets to recover cryptocurrencies. This is normally targeted at suspected criminals, rather than later down the transaction chain. But the legal distinction of non-currency property seems to be clear, at least so far as the US Department of Justice is concerned: crypto and CBDCs are not currencies exempt from seizure under merchant law. The attempts at finding alternatives to money are intrinsically based on avoiding the discipline of a gold exchange standard. Deceptively, cryptocurrencies have set themselves up as a better medium of exchange, claiming to be in tune with our technological times. Instead, they lack the crucial merchant law exemption and so cannot replace metallic money. Cryptocurrencies are liable to collapse entirely if metallic money is reintroduced to back existing currencies. Surely with the right justification, politicians and financiers could simply delete zeros from the accounts of suspected dissidents in a dystopian ‘Brave New World’ scenario? It might seem more convenient to us but ultimately who is the beneficiary to such a financial network? Meanwhile, the situation for inflating fiat (banknotes) is becoming increasingly precarious. Sanctions against Russia are driving up fuel, commodity and food prices, the last of these threatening starvation. More currency will be printed in an attempt to avert the gathering crisis but how long before the bubble bursts? Interest rates are rising out of control with market forces dictating the scenario. The historical precedent is increasingly pointing to a collapse of market assets driven by rising interest rates which will take fiat currencies down with them. As they say in Amerika ‘In God we trust’ but why does this statement appear on the dollar bill, a promissory note with no intrinsic value? How do they esteem their Creator and what are these national values truly based on? As it was said by Prophet Mohammed pbuh in the book of Tirmidhi, ‘The last hour will not come until trust becomes a means of profit.”

 

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