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Monday, 1 January 2001

Smithy - The Wizards of Money

Rights Reserved - Smithy

Rights Reserved - Smithy



This is your Money and Financial Management Series…but with a twist. My name is Smithy, I’m from the land of Oz.

In response to the growth in business and personal finance shows at most media outlets, including so-called public media, such as NPR and PBS, we bring you this new series on money but "with a twist". In this series we will look beyond the latest DOW and NASDAQ ups and downs, and past the hot stock tips, and see just how peculiar and undemocratic our monetary system really is.
The Wizards of Money will take a critical look at the mechanics of the capital and debt markets, who makes the critical decisions that drive them, and how these markets then effect everybody’s lives.

Humans have inherited a monetary system that fueled the industrial revolution, lost its commodity backing during the Vietnam War and now travels by the trillions, over millions of miles in a matter of nano-seconds. Physical currency notes are almost irrelevant having been replaced by a system of bits and bytes accounting in complex networks. While money is just a highly abstract measure and a medium of exchange our lives revolve around it and its disappearance can bring trade to a grinding halt, collapsing whole communities. This ridiculous situation is akin to a carpenter stopping work because he has run out of inches! Or a musician calling it quits because she's run out of decibels!

Today, in part one, we'll examine that most peculiar activity known as "making money"; how money is made and who makes it. We'll explore the mysterious money making process by first exploring the origin, and role of, one of the most secretive bodies in the world, the Federal Reserve System. We will also look at the role of the commercial banking system, and why it is that the money origination process is quite unfair and undemocratic.


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