Capitalism and global economics is fundamentally flawed

We’re made to believe that global finance is a complex issue that we couldn’t possibly understand. I’m going tackle this subject and try to break it down into simple, logical and concise points and make it as compelling and easy to comprehend as possible.

I’ve also linked to some entertaining and interesting resources at the end of this post, especially the embedded video entitled “The Biggest Scam in the History of Mankind”.

After reading this post I wholeheartedly implore you to watch the below embedded video. It will only take you 90 seconds and it demonstrates how our governments, central banks and the financial industry create currency out of thin air (and yes, technically this IS FRAUD) and then proceed to steals it back from us again in the form of income tax.

I’m going to start by questioning whether the ‘right‘ political, social and economic ideologies prevailed at the end of the Russian / American (Communist / Capitalist respectively) cold war at the end of the 1980’s. Personally, I think the war had ended almost 20 years earlier and we had already lost. You see why as you read on.

As someone who has grown up with western values, I ,like most of us with a western education, have been told that Communism is bad. I’ve grown up believing that Communism doesn’t work, that it is fundamentally flawed, corrupt, unfair and even evil.

Whilst I’m not here to advocate Communism I am going to ask you to bear with me whilst I make exactly the same accusations about Capitalism.

News flash: Money no longer exist. The currency that we use today isn’t even worth the paper that it’s printed on. It’s fake. It holds as much intrinsic value as Monopoly money.

Here’s why…

Before the death of the US Gold Standard in 1971 all American dollars were backed by gold and all other currencies were backed by the dollar, hence we could call it money. That meant that, technically, if I had a £10 note, I could walk into any bank and exchange my £10 note for £10 worth of gold.

Money was asset backed and the asset that guaranteed its value was gold. This was something that was referred to as the Gold Standard.

Point of Interest: Humans have always valued gold because it is an inert metal. This means that 10kg of gold 1,000 years ago is still 10kg of the same chemical metal gold compound today. The same cannot be said for wood, a car or any other chemical compound, which is why we place so much trust and value in gold.

Because pre-1971 money was asset backed it was actually like having a certificate for the equivalent value of gold. This meant that it was the banks responsibility to look after our wealth. Whilst thy did that the bank provided us with coin and paper money that was more flexible and convenient to exchange for goods and services. Image carrying gold bars around with you all day. If would be very impracticable and cumbersome.

You can see on the $20 gold certificate below from 1922, that it actually says on the note itself:

“Twenty Dollars in Gold Coin Payable to the Bearer on Demand”.

Click image to enlarge



You will notice that on a 1985 $20 note below that this statement has disappeared, hence why I call it a note and not a certificate. A $20 note or £20 note or a 20 Euro note today is not worth anything, except the value that ‘we’ place on it. For this reason we have allowed ourselves to be deceived by our governments, central banks and financial industry into believing that this ‘currency’ is worth something. It is not. You cannot walk into a bank today and exchange your £10 note for £10 worth of gold.

Click image to enlarge


Let me give you a very simplistic example of why the death of the American Gold Standard was so fundamentally wrong and should have been hailed as corrupt and illegal by all the other world leaders at that time.

We have a finite amount of gold on planet earth. This means that if we collectively agreed to use gold as our representation of wealth, there would only be so much of it that any one person could have. This means that there are self imposed limits to the system, due to the rarity of the commodity we have chosen to use to represent our wealth. In this case, gold.

For the purpose of keeping things simple let’s say that the world has a total of 100 gold bars and each gold bar weighs 1kg. This gives us a total and maximum asset value for our combined wealth of 100kg of gold.

If there were 100 countries on planet earth, in order for us to distribute the wealth equally, every country could have 1 gold bar. Again, to keep it simple let’s assume that each country has 1,000 people. In a world where everyone had the same amount of wealth, each person would be allocated 1g of gold.

Now, if I wanted to acquire more wealth I would have to trade something of value that I had, in the form of either goods or services, with someone else in exchange for their gold. With me so far? Simple right. In order for me to make more money, I have to exchange either my goods or services for more of everyone else’s gold. At no point is there ever any more gold in the system than our original 100kg. If the person who gave me their gold wants to acquire more wealth then they would have to trade their goods or services with someone else for their gold.

In this example, in order for someone else to get richer, someone else would have to get poorer, but no one could ever become richer than 100kg worth of gold. At some point the person with 100kg of gold would need to trade some of it for goods or services, so the likelihood of them actually accumulating 100kg is high improbable.

It may seem like an oversimplification but essentially this is how global economics functioned under the Bretton Woods system from 1944 – 1971. During that time paper and coin money was backed by its asset value in gold. It was fair, it was simple and it worked.

It stopped working in 1971 when the then President of the United States of America, President Richard Milhous Nixon put an end to the American Dollar Gold Standard and literally gave the US Government and the Federal Reserve license to print money, or currency as it then became.

In my humble opinion, what should have happened at this point was that the rest of the world went “You’re going to do what!?! We’re not going to let you get away with that. Either return to the Gold Standard or we will start trading oil and other commodities in Great British Pounds, the Japanese Yen, the French Franc or the Deutsche Mark.” But sadly, they didn’t and shortly after 1971 the global economy adopted Fiat Money (or Currency as it should be referred to because it has no value and so isn’t technically money).

At this point governments, central banks and the banking and financial industry could literally start printing their own currency. In order for this system to work, unlike the 100kg of gold in the above example, there is no theoretical limit on the amount of currency that can exist within a nation or the global economy. It is unlimited, but as it’s not actually worth anything, the governments, central banks and the financial industry created debt as a method of controlling the distribution of wealth and to ensure that the ‘money’ stayed where it should do. With the banks.

Since 1971 the world has slowly been getting more and more into debt. Banks lend money that they don’t technically have to governments, businesses and individuals. ‘We’ then give the banks their money back, at which point they lend even more money they don’t even have to governments, businesses and individuals, creating an endless spiral of debt creation that the bank owns and that we must all pay back.

Let me quickly go back to my original point. Are you still glad that American won the cold war?

Hypothetically speaking then, would you rather live in a world that conforms to Communist ideals, where everyone has equal access to the wealth reserves and is treated and rewarded equally or would you rather live in a post-1971 Capitalist society like we do today, where banks and the elite get more and more wealthy, whilst the majority simply get poorer and poorer?

What Nixon did in 1971 was to re-write the rule book to ensure that American global financial and economic supremacy existed prior to entering into a cold (financial) war with Russia. The cold war was not won through military force, it was won because the United Stated of America bankrupted Russia. It did this to prove their point, that Communism does not work, but they did it by cheating. As a result we have all been cheated. There method of cheating was to drop the Gold Standard. They did this because Communism represented a fair and just society which threatened the American dream – the unlimited acquisition of personal wealth aka greed.

I’m not knocking Americans, I’m sure 99% of them are just as buggered as the rest of us, I’m just questioning their elite and their leadership.

I would also like to point out that there is nothing wrong, in principle, with Communism. We have just been told that there is something wrong with Communism and America have continued to force their values onto the rest of the world, including their corrupt and unjust economic and financial system.

Finally, throughout documented history, ever, yes, EVERY single fiat backed economy has collapsed within 40-50 years under the pressures of its own debt. In 2015, as I write this now, we are on year 44. Personally I think we’re already on borrowed time and it won’t be long before deflation begins to destabilise the global economy even further. It has already started to happen with the rapid deflation of oil prices over the last couple of months.

The system as it currently stands can no longer continue.

I know it and I’m pretty sure if you got this far into this post that you know it too.

Change is inevitable.

Change is coming.

It will be down to us to decide whether we let the same old thieves run the new system and let them hit the reset switch and start all over again. Or will we choose something different?

If given the opportunity wouldn’t you rather have an economic system that works for everyone and not just the 1% super rich, super elite of today.

If you agree with some or all of the content in this post then please do something to support change. At the very least, like and share this post with as many of your friends on social media as you can. Start looking beyond what we are being told by industry, governments and the media and find out for yourself what’s actually happening to our economies, societies and life on earth.

Please hit play on the video below and watch the next 90 seconds of Mike Maloney explain what I’ve just been talking about. He may not have all the answers, but he makes some very interesting points.

Plays starts automatically from 18 minutes and 54 seconds.

Disclaimer / Caveat: The presenter of this video clip (Mike Maloney) is part of the Hidden Secrets of Money and works for He believes in the value of gold and would obviously like you to buy some from him, so there is an ulterior motive behind what he is telling you. That said, this is not a pushy sales pitch. His explanations, to me, make logical sense and have made me question my own value judgements on our current global economy.

You can view the entire series below:

Additional Reading:

Both of the above books are recent publications and paint a relevant and detailed picture of the financial and economic state of our world today. I highly recommend them to you. They are both also available as audio books from Audible.


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