ORIENTAL REVIEW opens the new historical series. We decided to name it ‘The Episodes’. We are not going to cover the world history with a comprehensive overview. It is beyond our power and competence. We want to relate to our readers few stories, which are not very known or well-forgotten by the general public and specialists. Meanwhile these stories, to our minds, have a direct reference and impact on the contemporary international situation and perhaps can be extrapolated to the future. Because as was taught by Ecclesiastes, ‘What has been will be again, what has been done will be done again; there is nothing new under the sun‘ ( Eccl. 1:9).
As it is generally accepted that in our sinful world whatever anybody speaks up about, he speaks about money, we are inaugurating ‘The Episodes’ with the glimpse into the origin of the ‘old good’ Bank of England. The current economic crisis can not be fully understood without scrutinizing the dark depths of the global financial infrastructure…
Episode 1. Bank of England.
By the end of the 17th century, England appeared on the verge of financial collapse as 50 years of nearly constant war with France had depleted the nation’s economy. Government officials entered into talks with creditors in hopes of gathering the necessary funds to continue their policies, but the interest rates offered by the creditors were very high. And so, at the behest of the government, a private bank with the power to print money came literally out of nowhere.
Such was the birth of the first ever private central bank – the Bank of England. In order to mislead the public, it bore the deceptive name, the Bank of England, but in reality was has never been a public institution. It traded its shares on the market like any other private bank from the moment of its establishment.
Investors, whose names (it is important to note) were never disclosed, were required to put in 1.25 million pounds in gold for the purchase of shares, but in reality only 750,000 pounds were paid. Despite this, the Bank of England was legally registered in 1694 and started its activities with the issuance of interest-bearing loans in amounts much greater than the amount it was supposed to have in reserves.
Today, the Bank of England has served as a model for the privately operated central banks that appear in every country of the world. Private central banks are now so powerful that they will soon control each country’s economy, which will lead to plutocracy – power in the hands of the powerful. Just imagine if we transferred the control of the military to organized crime – get the picture?
Central banks should not be in private hands! A clique of private central banks carries with it a hidden tax. Governments, which lack the political will to raise taxes, instead produce bonds and sell them to the central banks to raise money for government programs. But the bonds are bought with money that the central bank created out of thin air, and the more money is circulated, the less the money in our pockets is worth. The government receives as much money as it wants for its political goals, but the people are paying the price with inflation. The beauty of it is that hardly 10,000 people can figure out the truth hidden behind this cryptic pseudo-economical nonsense.
After the Bank of England was founded, the country experienced an influx of paper money. Prices doubled. An enormous number of loans were issued to fund any and all crazy ideas. For example, one company proposed to dry up the Red Sea in order to retrieve the gold from the supposedly sunken Egyptian army that pursued Moses as he fled leading the Israelites.
By 1698, government debt rose from 1.25 million pounds to 16 million. To pay that off, state taxes increased again and again.
In short, financial capital began to take de facto control over the state.