[The Goldsmiths] also discovered that extra profits could be made by “rowing” the economy between easy money and tight money. When they made money easier to borrow, then the amount of money in circulation expanded. Money was plentiful. People took out more loans to expand their businesses. But then the goldsmiths would tighten the money supply. They would make loans more difficult to get.
What would happen? Just what happens today. A certain percentage of people could not repay their previous loans, and could not take out new loans to repay the old ones. Therefore they went bankrupt, and had to sell their assets to the goldsmiths or at auction for pennies on the dollar.
The same thing is still going on today, and today we call this rowing of the economy, up and down, the “Business Cycle,” or more recently in the stock markets, “corrections”.
You can’t blame Darling, though:
[T]he American people elected Republican James Garfield President. Garfield understood how the economy was being manipulated. As a Congressman, he had been chairman of the Appropriations Committee, and was a member of the Banking and Currency Committee. After his inauguration, he slammed the Money Changers publically in 1881:
“Whoever controls the volume of money in any country is absolute master of all industry and commerce... and when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.”
Garfield understood. Within a few weeks of making this statement, on July 2 of 1881, President Garfield was assassinated.
Watch the video here: Part One, Part Two
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