Understanding what propels the World Economy is mandatory to comprehend its Demise

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Banking has existed for a long time. The idea of debt dates back to the ancient world, as evidenced for example by ancient Mesopotamian clay tablets recording interest-bearing loans. Far too many people attribute our financial doom to fractional banking etc. They are actually taking the side of the bankers who want money to retain its purchasing power or rise rather than devalue with economic expansion. Indeed, they are in truth arguing for austerity that is tearing Europe apart at the seams. They honestly do not comprehend what they are supporting. They want money to retain its value, yet they expect profits from investment, trading, and their home to rise in value with wages.You cannot have your cake and eat it simultaneously. What these theories tout is the stuff that Euroland was supposed to create and it is now sending the entire global economy into a major economic decline not seen since the 1930s along with the US law FATCA hunting down Americans globally lie dogs.

Roman Sacred Way

rome-forum-3 Via SacraHere is a picture I took in the Roman Forum. This was the ancient Wall Street of its day known as the Via Sacra (Sacred Road). Cicero (106-43BC) wrote that anytime there was news of a disaster in Asia Minor (modern Turkey), a financial panic would be unleashed in the Roman Forum on this very street. The Via Sacra was the main street of ancient Rome, leading from the top of the Capitoline Hill, through some of the most important religious sites of the Forum (where it is the widest street), to the Colosseum.

Brutus-Eid-Mar-2

Asia Minor was the “emerging market”  into which the Romans invested and lent money no different from today. Cicero tells us that the infamous traitor Brutus (85-42BC) who had lent money to the King of Cappadocia (Turkey) and to the city of Salamis at a 48% rate of interest. Brutus was not defending the people and the Republic when he killed Caesar, but his own greedy power. Brutus’ coinage depicts his own image declaring he killed Caesar proudly for the people on the 15th of March (Ides of March – EID MAR). This is why history repeats because human nature and ideas are always the same.

Roman Banker-The Roman bankers would line the Via Sacra in the more modern days of ancient Rome. Previously, the temple on the Capitoline Hill served both as the bank and the official mint where coins were produced. This was part of a tradition where people were trying to buy redemption with donations to temples. Since the various gods never spent the MONEY, it became a hoard of cash that served as “capitalization” for early forms of bankers where priests who would lend out the MONEY from the Capitoline Hill (capital) for a profit. This profit became known as interest that was literally acquiring an “interest” in the venture for which MONEY was borrowed. Such interest would be in things as planting next season’s crops or a voyage for trade. The second reason religion became involved in some cultures as the producer of MONEY was because supposedly the priests were trustworthy – no doubt like our politicians claim to be honorable today.

Juno-Capitaline-Temple

In the case of Rome, the actual mint was on the Capitoline Hill at the head of the Roman Forum located in the most venerable temple of ancient Rome. Situated on the Capitoline hill this temple was dedicated to Jupiter Optimus Maximus who was the Roman king of the gods also known as Jove and his two companion deities: Juno and MinervaJuno is the Roman goddess of love and marriage and is the equivalent of the Greek goddess Hera.This was a holy trinity or triad so to speak between the three of them – Jupiter, Juno and Minerva. Juno was the Queen of the Gods. Minerva (Etruscan: Menrva) was the Roman goddess of wisdom and sponsor of arts, trade, and strategy. She was born with weapons from the head of Jupiter.

A sacred flock of geese were kept there at the Temple on the Capitoline and in 387BC, there was a marauding Gallic tribe that swept down from the Po River valley and sacked Rome extracting a heavy ransom in gold. Rome is said to have been founded in 753BC when their last Tarquin King was overthrown creating the Roman Republic in 509BC. This was followed by its first Etruscan war fought against the Fidenae (437-426BC). Consequently, the Gallic Invasion was a serious blow and no doubt would provide for good reason to conquer Gaul 300 years later by Julius Caesar.

Juno Moneta

As the legend goes, the Gauls attempted to invade the city quietly, but had frightened the sacred flock of geese that made a lot of noise. This alerted the Romans to the surprise attack giving us the word monere meaning in Latin to warn. The Temple of Juno then became popularly known as the Temple of Juno Moneta. Since this is where the coins were minted, we now arrive at the word “MONEY” that springs from the origin of this legend and place that was an ancient mint. Our terms such as capital flow now arrives from the Latin word currere meaning “to run” or “to flow” and this is where the MONEY flowed from giving us the word “CURRENCY” meaning the flow of MONEY. This is why Juno Moneta is pictured on Roman coins as holding the balance scales in one hand and a cornucopia in the other symbolizing endless bounty or wealth. This is the birth of the terms MONEY and CURRENCY.

During the Roman Republic (509-27BC), there were societates publicanorum, which were organizations of contractors or leaseholders who performed various services for the government – privatization. Participants in such organizations had partes or shares in the venture. This is the origin of corporate shares. This form of financial instrument was mentioned various times by Cicero. In one speech, Cicero mentions “shares that had a very high price at the time.” These shares rose and fell as they do today for the driving force was human emotion. These instruments were tradable, with fluctuating values based on an organization’s success. The societas going work for the government declined during Imperial Rome as most of their services were taken over by direct agents of the state – bureaucracy. Corporate shares thus became private ventures. These shares traded in the temple.

The word “corporation” derives from corpus, the Latin word for body, or a “body of people.” By the time of Justinian (reigned 527–565AD), Roman Law recognized a full range of private corporate entities under the names universitas, corpus or collegium. Even government itself organized itself as corporations (the populus Romanus) such as cities and municipalities. There were private associations as sponsors of a religious cult, burial clubs, political groups, and guilds of craftsmen or traders. Such entities commonly had the right to own property and make contracts, to receive gifts and legacies, to sue and be sued, and, in general, to perform legal acts through their representatives. Private associations were granted designated privileges and liberties by the emperor. These corporations carried on business and were the subjects of legal rights enabling a business to survive the death of its founder. This was a invention of ancient Rome. We also find their existence in the Maurya Empire located in ancient India.

AUG-DEMS

Therefore, we have banks and corporations with contracts, interest, and share trading on ancient exchanges. Large sums of money changed hands in Roman times. People purchased real estate, financed trade, and invested in the provinces occupied by the Roman legions. Cicero writes, in Epistulae ad Familiares 5.6 and Epistulae ad Atticum 13.31, respectively: “I have bought that very house for 3.5 million sesterces” and “Gaius Albanius is the nearest neighbor: he bought 1,000 iugera [625 acres] of M. Pilius, as far as I can remember, for 11.5 million sesterces.” One sesterius was about 30 grams at that time –  lot of weight. Four sesterii equaled one silver denarius about 3.8 grams the size of a dime equal to 875,000 denarii. At the time of Augustus (27BC-14AD) a soldier earned about 230 denarii a year. Cicero’s house was a very lot of money or 3804 years of work for a soldier.

ancient-roman-iron-and-carnelian-finger-ring_1_Obviously, Cicero did not pay three and half million sesterces physically. That would have meant packing and carrying some three and half tons of coins through the streets of Rome. When C. Albanius bought an estate from C. Pilius for eleven and half million sesterces, there is no way such transactions took place in tangible coin. Unquestionably, such transactions were paid by documentary transfers authenticated typically with a signature ring. The commonest procedure for large property purchases in this period was the one casually alluded to by Cicero [De Officiis 3.59] “nomina facit, negotium conficit’ . . . provides the credit [or ‘bonds’–nomina], completes the purchase.

These nomina are actually the term “nominal”. The Romans kept account books known as nomen. OriginallyWith time, by the end of the Republic this terms simply meant “debt,” referring to the entries in the creditor’s and the debtor’s account books. Finance fueled the Roman economy at every level. Debt became a standard part of the economy just as consumer credit dominates the modern economy.Pliny the Younger  (61 – c. 113AD )writes, for example, (in Epistulae 3.19): “Perhaps you will ask whether I can raise these three millions without difficulty. Well, nearly all my capital is invested in land, but I have some money out at interest and I can borrow without any trouble.”

There were even credit agencies. As long as a party was a worthy creditor (a bonum nomen) Cicero explained that you could transfer the nomina, of one person selling ot to another. For example, Cicero writes to his financial advisor Atticus (Ad Atticum 12.31): “If I were to sell my claim on Faberius, I don’t doubt my being able to settle for the grounds of Silius even by a ready money payment.” Debt was tradable! Debt became money as it serves today. Essentially, there was an active bond market with credit ratings. A payer transferred a nomen that was owed to him to the seller, which was known as a “delegatio.”

Justinian

The Roman economy was a market economy with a fully developed financial marketplace where nomina were traded – nominal bonds. The Romans therefore created a bond market. The concept of negotiable notes appears to be well understood and was codified within Roman law (The Digest of Justinian XXX.I.44): “A party who bequeaths a note bequeaths the claim and not merely the material on which the writing appears. This is proved by a sale, for when a note is sold, the debt by which it is evidenced is also considered to be sold.” Justinian I (527-565AD) was the famous emperor whose legal code has survived – the law giver.

What about international ancient equivalent of wire transfers? Roman finance actually faced this logistical problem of moving money throughout the Empire.This was known as “permutatio”, which was the transfer of funds from place to place through paper transactions. This is what made Rome’s greatest contribution to the economy and spread economic stability throughout the empire. This was ancient banking that enabled the Roman Empire to expand and everyone wanted to be part of the system.

The publicani were private companies in charge of tax collection in the provinces (as well as many other tasks,  They had a branch in Rome and one in the provinces. They could deposit silver in Rome (or transfer them some nomina) and the tax revenue collected in that province could be free for payment there and the tax revenue magically appeared in Rome without transportation. This is also how the Roman Republic would finance its public spending overseas. Since taxes were collected throughout the provinces, by trading claims on taxes Romans could transfer funds across their empire. this was the very same system that the Knights Templar reestablished.

The degree of sophistication of Roman financial system was the secret to its rise. The Knights Templar fueled the rise from the ashes of the Dark Age as they too facilitated the movement of money throughout Europe handling the donations to the Catholic Church. Money could not move because of security. People would routinely be robbed – hence the term highway robbery.

Philip IV FranceThe US Congress in enacting FATCA is causing the total destruction of the world economy. This is reversing the free flow of capital for investment that creates economic expansion and provided the stability of the Roman Empire. Once Philip IV of France seized the Italian bankers, then the Vatican moving it to France, and then used a Frenchman he made Pope to decree the Knights Templar to be devil worshipers, he seized all the money and destroyed the European economy sending it back into a major economic depression.

Templar-ExecutedThe seizure of the Knights Templar wiped out the ability of European capital to move. Philip IV was after every coin he could find without any concept of the destruction he has wrought. This is what the US Congress has done with FATCA. Global investment is drying up so fast and liquidity remains at 50% of 2007 levels, when we turn down, this will be the worst decline imaginable. Indeed, the greed for taxation is suffocating the world economy and no degree of increasing the money supply will reverse the implosion.