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My interest in money began at an early age. I
happened to be seven years old, when the new 1965 "tokens" were
first minted. I was not sure why, but I knew there was something going
on here. Several adults grumbled and complained about the new
coins (really tokens because the last real coins were minted in 1964).
Several people I knew began collecting the 1964 and older coins and kept
telling me that I should too because some day they would be worth
something. And so at the tender age of seven, I became a "coin
collector" and a "silver commodities trader." At
the time, my father was on the board of directors at one of the local banks,
so I asked all the tellers at the main branch to "save the silver for
me," and I would trade tokens for them. I did the same with the
lady in the cafeteria at school. So once a day at school and twice a
week at the bank, I would collect a few silver coins.
I didn't know it at the time, but a powerful law of economics was at
work. Thomas Gresham's law states, "Bad money will drive good
money out of circulation," which simply means that people will hoard
good money and spend the bad. This is exactly what happened in the mid
1960's, as I am sure most of you here remember. It didn't take long,
before my take was getting smaller and smaller every week and it finally
dried up. I packed my hoard away and forgot about it.
I graduated from college in 1979 as a Civil Engineer and became a full-time
taxpayer. Ronald Regan was running for office and was saying that he
could "fix inflation." I had just lived through the
wild inflation years during the mid- to late-1970's, but I was in high school
and like most people, I believed that Volker, at the Federal Reserve, was
trying to "fight inflation."
President Jimmy Carter was blaming the inflation on "the Arab Oil Embargo."
Nixon had blamed it on "the wage and price spiral" and even
tried wage and price controls that were a total joke. I was immediately
caught up in the condition know as "income tax bracket creep."
I got a little upset about that, and I began to wonder about a few
things: why does everything have to cost more every year; what is
money; why did they change the money in 1964, 1968 and 1972; what
exactly was the Federal Reserve; and what exactly did Paul Volker do
there? I began researching these questions slowly and asking people who
should have know about them. I got no where fast.
Slowly through reading dozens of books on the subject, from many different
points of view, a light started to glow. I will attempt to share what I
have learned over the past many years. History always makes more sense
when studied along with the financial conditions of the times. It is a
long tale of greed and ruin. But first, like all good stories, let's
back up and start at the beginning. (Well maybe not all the way back,
as I tend to skip up and down the time line.)
A brief history of the Knights of the Temple of King Solomon.
In 476 A.D.,
Rome finally
collapsed and the last of the market economy went with it. The "small
market correction" that followed was called the Middle Ages.
It was a long correction cycle but Rome
was quite a blow off top. The feudal system was the financial order of
the day where society was built around large manors or estates. In this
type of society, there was little need of money. Not much was traded
between manors, illiteracy flourished and money fell out of general use in Western Europe. In Eastern
Europe, the Byzantine emperors continued to mint a standard gold
coin, but elsewhere, any coins that were minted were suspect.
With the Crusades to retake Jerusalem,
during the Middle Ages, money again became important as travel and
interaction with others became necessary. In 1118, the order of Knights
of the Temple of Solomon or the Knights Templar, or simply, Templars
was formed by Papal order for the express purpose of retaking the Holy Lands
and protecting the routes to and from Europe.
The Templars were a new kind of religious order that had never existed in the
Church before. They were warrior-monks who took vows of chastity and
poverty. They became some of the most feared warrior knights of their
time.
Much has been written and speculated concerning the Templars causing many
legends and stories that include: the Search for the Ark of the
Covenant beneath the site of the Temple of Solomon; the Secrets of
Roslyn Chapel in Scotland; and the Lost Treasury of the Order. Whole volumes
of history, on their order alone, have been written, and make for fascinating
reading.
As the order grew, new recruits came from the noble classes, mostly from
second sons, who were not to inherit. The order grew and acquired many
monasteries throughout Europe that served as recruitment stations for more
warrior-monks. Through gifts and captured infidel treasure, they grew
quite wealthy. At their zenith, the order owned over 800 castles in
Europe and collected money for and financed the Crusades. All of their
land holdings funneled money to their headquarters in Palestine.
Since the Templars had all of these castles throughout Europe, they became
logical places for noblemen to deposit their wealth when they left on crusade
to the Holy Land. After all, when a nobleman left his castle to fight
in the Middle East, he would take his ablest men, and would have to leave his
treasury at home, only lightly guarded. The Templar monasteries became
a natural place to leave money, as they were populated by warrior-monks, who
had sworn a vow of poverty.
To make matters better, the Templars even gave the noblemen a letter or draft
(with a secret code only recognized by other Templars) that they could
present to any Templar castle along the way and withdraw gold coins that were
used in that particular area. This was quite attractive to a nobleman
traveling with a large group to support, but wary of carrying his entire
treasury on the road into uncertain and sometimes hostile territory.
Thus, the Templars due to their unique position at the time became the
defacto bankers of Europe. "Templar drafts, don't leave the
castle without them." Carl Maulden would have been proud.
The Templars even had their own Navy to transport goods, money and men to the
Holy Land. But even though the finance end of the order was growing by
leaps and bounds, the military side of the order was losing ground in the
Holy Land, and finally was forced to retreat to the Island of Cypress.
Right up to the end of the order's official existence, the Templars were
making plans to retake the Middle East mainland.
In the late 1200's, King Phillip IV of France or "Phillip the Fair"
was in dire need of money. He had been at war for a number of years,
and then, like now, wars are expensive to wage. Like the Romans
before, he experimented with reducing the amount of silver in the coins, high
taxes, confiscated the property of all Jews, and then expelled them and even
taxed the Church. All attempts to increase revenue failed
miserably. The main Templar treasure house for the entire order at this
time was in Paris, and Phillip had borrowed heavily from the Templars.
In a well thought out move, Philip moved the Papacy to France, and was
instrumental in seating Pope Clement V in France. Phillip conspired
with Clement and had the Templars rounded up on Friday, the 13th, in 1307,
which is the reason to this day that Friday the 13th is bad luck. They
were arrested on trumped up charges of heresy (the equivalent of being called
a racist today). Somehow, or another, only the head of the order, J.
DeMolay and several of the older Templars were rounded up. Somehow, or
another, the Templars were tipped off, and the entire Templar treasury along
with the Templar Navy sailed the night of the 12th, and was never heard from
again.
DeMolay had just arrived in town a few days before with a wagon train of
silver to deposit in the treasury and battle plans to discuss with the Pope
for the re-invasion of the Holy Lands. DeMolay was fairly certain that
he was untouchable, since not only was he the head of a monastic order, but
also Philip's banker.
Much to DeMolay's regret, Philip was not in a mood to respect either
position. The captured Templars were tortured and questioned for
several months in Philip's prison, after Pope Clement (the Pope in Philip's
pocket) issued a papal bull disbanding the order and declaring their lands
forfeit. Finally, Philip had all the captured Templars executed, and
DeMolay himself was slowly roasted to death over hot coals. (All
bankers should take note.) Thus, ended the first banking empire in
Europe during the Middle Ages.
Much has been written about where the Templar treasure is today. Some
claim that the surviving Templars went to Scotland and fought with Robert the
Bruce for Scottish independence. Some claim other tales of travel to
North American prior to Columbus. The surviving Templars, no doubt,
were not happy with Philip or the Pope for their treachery concerning the
order and their Navy declared guerrilla war upon the French King's
ships. The Naval battle flag of the Templars is quite familiar to all
even today. Who, after all, has not seen the "skull and crossed
thigh bones" on a black background?
Always remember that, "history is written by the victors."
Larry Laborde
Silver Trading Company
www.silvertrading.net
Larry lives in the occupied South with his
wife Puddy and sells precious metals at the Silver Trading Company.
Larry can be contacted at llabord@aol.com.
You can view his web site at www.silvertrading.net.
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