Dollars-A short history

There is a money machine down there somewhere

A link to gratitude at the bottom of this piece.

 United States Money...Federal Reserve Notes...dollars and cents...those things we carry around in our wallets and pocketbooks...those items we take for granted...those things we work hard to accumulate were relatively unknown up until the last decade of the eighteen hundreds.

Prior to this all sorts of so called “money” was backed by private banks, foreign governments and individuals placing value on items exchanged. There was no common currency that could be exchanged and valued equally until the establishment of the nations first bank after the adoption of the constitution in 1789. 

Washington and Hamilton established the first bank but things weren't so easy as the banks charter was only good for 20 years and was voted out only to be reinstated by Madison himself when he was president. Madison, the same man who had argued against a national bank, finally understood its value when faced with the calamity a decentralized system entailed. He was instrumental in starting the second national bank but still had his reservations about its life span so again only gave it a charter for 20 years. In between the lives of the two banks there was a five year span when inflation got completely out of hand.

Squash faces

At the end of the second bank's term the country was thrown back to the vagaries of independent banks that went bust quite regularly. Inflation and counterfeiting were massive problems as was confusion about how to value all the different bank notes floating about. There were 1600 different banks all issuing notes. Finally in 1862 Demand Notes(greenbacks as they were popularly known) were printed but stability was still not to reign.

“During the free banking era banks were short lived compared to today's commercial banks, with an average life span of five years. About half the banks failed and a third went out of business because they could not redeem their notes.” Wikipedia

Break time at the Blue Moon

After the financial panics of 1892 and 1907 the Federal Reserve System was created to regulate the flow of money and credit and to issue currency that would be used nationally. By 1929 the design was standardized and 99% of money exchanged in the US was with reserve notes.

Like most other nations our currency is not backed by anything. We agree to its value and it goes up and down on the open market. “The Fed's monetary powers did not dramatically change for the rest of the 20th century, but in the 1970s it was specifically charged by Congress to effectively promote "the goals of maximum employment, stable prices, and moderate long-term interest rates" as well as given regulatory responsibility over many consumer credit protection laws.” Wikipedia

Unusual mushrooms in my lawn this morning

Today many in our public domain that have not researched the history of our national currency want to go back to the wild wild west days of the way it was. They would prefer an environment where no one knows what anything is worth, nothing is centralized and banks go bust regularly and only stay open an average of 5 years. Personally i think we are far better off with the way it is, even with all its warts.

Little Factoid...the US is 16^th in broadband speeds and pays the most for it. South Korea is fastest followed by Hong Kong, Japan and then Romania.

This morning a friend pointed out cumulonimbus clouds that were just spectacular when we were swimming. i looked them up just now and realized we were most definitely experiencing a natural high.

CLOUD NINE - "The expression 'up on cloud nine' to describe a feeling of euphoric exaltation is based on actual terminology used by the U.S. Weather Bureau.

Clouds are divided into classes and each class is divided into nine types.

'Cloud nine' is the cumulonimbus cloud that you often see building up in the sky in a hot summer afternoon. It may reach 30,000 to 40,000 feet, so if one is up on 'cloud nine,' one is high indeed. "Morris Dictionary of Word and Phrase Origins"

i got a link from an acquaintance to a piece about gratitude in the NY times today and since it is the holidays i thought i would share it with all of you. Hope you have a wonderful Thanksgiving tomorrow. http://www.nytimes.com/2011/11/22/science/a-serving-of-gratitude-brings-healthy-dividends.html?_r=1&emc=eta1

See ya next week