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Categories: General, Guest Blog

Separation of Bank and State

Published on August 24th, 2013 by mark

by Mark Matthews

On July 30, 2013 several hundred entrepreneurs gathered in midtown Manhattan for the “Inside Bitcoins” one-day conference.

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“This country was founded on a separation of church and state,” said Alan Safahi, founder of the bitcoin start-up ZipZap, “I think we should add separation of bank and state.” This line drew an enthusiastic round of applause. - the Wall Street Journal

Over four decades ago, F.A. Hayek made the same proposal but, at the time, it seemed to have little chance of  becoming a reality. He argued for the denationalization of money, an abolition of the government monopoly over the money supply, and the institution of a regime of competitive private issuers of currency. [1]

Hayek wanted to make it increasingly impossible for governments to restrict the international movement of individuals, money and capital, and thereby to safeguard the ability of dissidents to escape oppression. Another reason was stop the recurring bouts of acute inflation and deflation that result in banks foreclosing on family farms and homes. In addition to that, Hayek wanted to bring a full stop to inflation spending that robs the individual of their labor in order to finance unnecessary wars.

In 1987, James Orlin Grabbe put pen to paper and described “The End of Ordinary Money.” In that two part essay JOG quotes from Hayek and foreshadowed the coming of Bitcoin twenty years before it arrives.

A Brief History of Money

Why did kings issue gold coins with their likeness embossed on them? Some might say this was purely narcissistic. However,  Professor David Graeber explains this was done for two main reasons. One reason was a practical matter, the King needed to pay his occupying armies in a foreign land and gold coin was a good way to do that. Secondly, as these coins began to circulate it allowed the King to tax his subjects and maintain control over these new occupied territories.

Ask yourself, is the money we use today so different?

Money has always been the ubiquitous control architecture for every political system. It works best when people under such false authority remain ignorant of how they are being manipulated.

This is true of every a political structure, including the religious variety. In much of monotheism, sin has always been equated with a debt to God. Under the surface of faith the real fiat currency of the church is guilt, and so the fear of hell became every priest’s stock and trade.

The priestly class of the American Empire are those mysterious families who own and operate the Federal Reserve Bank and control the Exchange Stabilization Fund. Leveraging the military might of the United States (and their own huge pools of capital), this unseen hand replaced the gold standard with a digital currency over 40 years ago.

Today every nation of the world now pays for oil in US dollars; however, times are changing. The unseen hand has used the IMF and World Bank to enslave third-world nations with debt, the same way easy-to-obtain credit cards entrap American consumers. It is written, “The rich rule over the poor, and the borrower is slave to the lender.”

When people begin to wake up and ask questions, the control that these political structures have over them begins to weaken. The old system of kings and kingdoms gave way to Republics and Democracies, but as long as monetarism continued so did the oligarchical control. What we are witnessing today is a massive paradigm shift taking place away from fiat currency and this could spell an end for monetarism.

While we don’t think about it, money functions as an artificial intelligence ruling almost every human enterprise, belief and behavior. Money provides control over people, and that is what political structures expect and demand. Indeed, they could not function without their ability to control and manipulate the money supply.

A Look Back at Recent History

In 2008 two significant events took place. A crypto-currency was described in a paper by Satoshi Nakamoto, but at the time this was a non-event. However, what no one failed to notice was the epic failure of the American Empire's money system. The ubiquitous control architecture of the world’s last superpower was in crisis. At least, that is what we were lead to believe.

People thought the sky was falling and they freaked out.

Senators were even told in a closed section of Congress that without a “blank check” bailout there would be martial law in American. President George Bush told the world our financial structure was in such desperate shape that if Congress did not hand over $700 billion to parties unknown, immediately, the whole structure would collapse.

Looking back at this event five years after the fact, we now know that this “blank check” was actually written out for well over 10 times the amount the American people were originally told. The ubiquitous control architecture by which government maintains power over people was effectively handed over to a few banking elites. Was this the result of poor management on the part of our political leaders or was this simply the consolidation of power by true rulers of the world?

What did they do with all that money? No one seems to know, but one thing this is clear, the ubiquitous control architecture is less ubiquitous and the established money system is now facing a crisis of confidence. People are losing their faith in the system and turning to any alternatives they can find.

When we think about Earth without money it seems as alien to us as a world that knows nothing of poverty and warfare. In the Star Trek universe created by Gene Roddenberry, money stopped being a negative force in the world, poverty ended and nations stop waging war against each other. While most people dream of a peaceful world, the concept of doing away with money altogether is too much for most people to comprehend. It is dismissed as a mere entertainment.

Ironically, it is hard to see how humanity can ever rise above our warlike culture unless and until we rise above what passes for money, namely the ubiquitous control architecture of political structures. That means if we want to see world peace, then we have to be the change we want to see in the world. It must start with our money habits. Mankind must learn to vote with their money–but one that is free from political control.

Forward Thinking

How might we reinvent money so that 1) it has value like gold, and 2) would not be controlled by political structures that could use it to wage war? This two-fold question is one that few people have ever bothered to ask, much less attempted to answer. While others were still trying reform a failing system, a mysterious hacker actually came up with the answer.  From Wikipedia:

Bitcoin (BTC) is a cryptocurrency first described in a 2008 paper by pseudonymous developer Satoshi Nakamoto, who called it a peer-to-peer, electronic cash system. Bitcoin creation and transfer is based on an open source cryptographic protocol and is not managed by any central authority.

Buckminster Fuller once said, “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” This is exactly what Satoshi has done. Calling Bitcoin a "disruptive technology" is an understatement. Money unmoored from any central authority is the new model. As the old money that political structures depend on becomes obsolete so will the political structures themselves.

Don’t worry- this isn’t going to happen overnight, but I believe it is the trend moving forward. While most people don’t think about it very much, we could say money makes us slaves to the system. That may sounds rather negative, and even melodramatic, but when we re-frame the problem in terms of computer technology, solutions begin to emerge and bitcoin is one very positive answer.

What we are seeing unfold is a world in which political structures of control are collapsing. With Bitcoin, pyramids of power are becoming as flat as a pancake. People are reclaiming their power from false authorities, and individuals are taking back their own sovereign birth-rights.

The bailout of Wall Street initiated in September 2008 was premised on the dire prediction that if major counterparties in the massive edifice of derivative contracts were allowed to fall, the whole interlocking house of cards would collapse and take the economy with it. What if we faced the same banking crisis next year or ten years from now? Just look at the yield on 10 year U.S. Treasuries and you can see we are heading for troubled waters.

In such a case, would an alternative currency like Bitcoin be allowed to fill the void?

The short answer is no. As long as we keep using words like “allowed” that answer will always be no, absolutely not. The system wants to keep on living, growing and controlling. As long as we are it’s subjects, it is our master. In order to secure our freedom, we must change our minds and the words we use. Stop asking for permission.

Is Bitcoin Money?

What makes bitcoin so different is that it is not political. If one government were to adopt bitcoin as their national currency, then you might called it political, but in such a case people could simply drop bitcoin for another crypto-currency. That is not to say they would a have a reason to do so, but the point is this: even with official endorsements, Bitcoin would not become just another means of political control.

Simply stated, money provides control over people and that is what political structures require. Therefore, non-political systems of exchange are not money, at least not money as the world has always know it. Perhaps it is more correct to say peer-to-peer systems of exchange that make property conveyance possible outside of any political system are the greatest form of money ever invented.

The Open Money Revolution

Yes, the time has come to demand honest government and that means we must demand honest money. Bitcoin didn’t ask for permission to exist, and in the same way we need not look to any false authority for permission to spend it. Make no mistake about it, open source money is a revolution. The only death will be the false authority of fiat money, and the rebellion is being financed by your spending.

This is an important point, so allow me to repeat it. We need government and we need money, we just don’t need one controlling the other. When money controls government then the oligarchy and corporations have undue influence. When government controls money, then the political system can control the citizens. The idea of a Republic is the idea that people control the government, but in order for this to work we need to separate money and state just like we separate church and state.

Those of you who followed the Occupy Movement will remember one predominant theme that emerged was this idea that we need to get money out of political process. This meme was one that resonated with a lot of people. It was thought that, if we could stop Wall Street from buying our politicians, they might reform themselves and become better representatives of WE THE PEOPLE.

When you think deeply about it, you begin to realize the problem is more fundamental. While it is true that K street lobbies have undue influence in our political system, that is not the root of the problem. The large pools of Capital that sit above government is the root of the problem. With the rise of Bitcoin, people like myself have begun to ask new questions and formulate new solutions. Perhaps we need government, but do we need government issued money?

Talking about removing the money from the political process is one thing, but to separate government from money altogether is something quite different–indeed, it is revolutionary. The separation of church and State is a rather new idea in human history, and most people agree it was a step forward. With the rise of financial instruments that are both autonomous and anonymous, the question must be asked: Are we now ready for the separation of money from the State?

The separation of church and State was very controversial but it brought greater pluralism for all. America had a big role to play in that evolutionary process. After the Magna Carta was signed, men of the Enlightenment were no longer content to be ruled by Kings. Today the old oligarchs that once sat behind the king’s throne are still asserting themselves by appointing bankers into political positions once held by elected officials. What we see today is neo-feudalism where the kings have been replaced by few powerful families, each with large pools of capital. They control the political process because the control the money.

What I’m describing is called “the New World Order” and those invested in this corrupt system are pushing a Globalist agenda that forces working people the world over to comply and submit to its all-powerful will without regard to their individual rights. Yes, people complain about this open conspiracy, but they are at a loss to know what can be done about it. Perhaps the answer is a simple one: stop using State issued money.

If people the world over were to adopt various forms of crypto-currency, this would seriously reduce the power of the Super-State to control them and in time it would also render the oligarchy powerless to control the state. Then, and only then, would free people have a chance to reclaim their government and restore a Constitutional Republic that is both accountable and representative of their the best interests.


 Check Out Mark's Previous Article:  Free Speech, ZeroCoin, and the Fourth Amendment

[1] Hayek, Friedrich A. von, Denationalisation of Money: An Analysis of the Theory and Practice of Concurrent Currencies, The Institute of Economic Affairs, Lancing, 1976.

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