PLEASE NOTE:

MyNews24 is a user-generated section of News24.com. The stories here come from users.

 
An observer
 
Comments: 56
Article views: 2470
 
 
Latest Badges:



 
View all An observer's badges.
 

This article has been selected as an Editor’s Choice report. Articles are selected based on quality of writing, audience response, newsworthiness and originality, and is at the discretion of the MyNews24 editors.

Who owns our money?

06 January 2012, 14:13
I was thinking about money the other today. It's that time of the year, I guess, where we assess our income and expenditure and try to figure out more ways to make money. 

As a kind of visual aid, I drew out one of those wonderful R 100 notes out of my wallet, and imagined my wallet being filled with those blue bills. I stared at it for a few seconds and noticed it was signed by T Mboweni, so I figured that this must be an old bill. Then I looked a little closer and noticed that the "I promise to pay the bearer R 100" that our notes used to have was missing. "Heck", I thought, "this isn't a bill at all, it is just a piece of paper".

You see I grew up believing that a money note was a bill of exchange, a promissory note. That is what I had been taught in economics, and my study of the Reserve Bank Act in the 1970's. Now what I saw was just a piece of paper with pretty pictures and some fancy insignia, Zebra's on the back, and "100" printed all over and the words "ONE HUNDRED RAND" on it.

So being the curious person that I am, I went and did some research. I discovered that the Bills of Exchange Act still existed, and in fact was still representative of a signed instrument in writing ordering another to pay on a certain date, a certain amount of money. I was now more curious about this darn R 100 note in my wallet. Why doesn't it say, "I promise to pay". Is it no longer a Bill of Exchange?

This got me researching a little deeper, and I discovered that money no longer needed to be issued by the Reserve Bank as a Bill of Exchange (a promissory note), as money was now called "fiat" money, or "near money". I found this term quite perculiar. How can something as hard as currency be called "near money". If it's "near money" it can't be money can it?

Anyway, as I already knew, the Reserve Bank was responsible for printing this "near" money. This got me really curious, so I downloaded a copy of the Reserve Bank Act of 1913, and began reading it. It was the usual legal jargon telling me stuff I had learnt a long time ago. 

I had even leant that the Reserve Bank was owned by the government. In other words it was an independent body of wise old people who knew better than us mere mortals who undertook to "protect" us mere mortals against inflation, and the oversupply of money.

"Cool", I thought so I read on further, then it dawned on me that this legal jargon was "double speak". How "independent" was the Reserve Bank? So I began to dig really deep and guess what I discovered? You will not in your wildest dreams guess what I discovered. The Reserve Bank is privately owned. It is not owned by our government. That's right. The Reserve Bank is privately owned, it is quite separate from government. It has private shareholders. Why is this not commonly known or expressed by the media, our schools, our education departments, by the government iteslf? Why is this such a big secret? 

The Reserve Bank Act of 1913 gave the Reserve Bank the right to print money. This got me a bit confused. Why would any government give a privately-owned corporation the right to print money? Why not print the money themselves? This kind of boggled my mind for a while. I imagined a tender process happening in 1913 where different organisations were queuing up to be able to print money. Legal tender. Who would not want this contract? It's got to be a winner. "Give me that contract".

However, no such process took place. A contact was awarded to the South African Reserve Bank (a privately-owned bank), awarding it the right to print money. Doesn't that boggle your mind. No wonder my pretty R 100 note doesn't make any promises. What it represents is "near money", not money, not anything of real value, but a piece of paper or metal that is "legal tender". In other words, when the government wants money because it is in debt because it overspends (called the deficit), it orders the Reserve Bank to print more money. 

In other words, that nice blue R 100 piece of paper represents the debt that the government owes to the privately-owned Reserve Bank of South Africa. I think that this kind of opens a Pandora's box, dont you? It raises a hundred questions in my mind, the main one is, why doesn't the government decide itself how much money should be printed and print the money itself? Why is this function given to a corporate bank? What if their shareholders decide not to print any more money? What would happen to our economy then?

History has shown that a contraction in the money supply leads to depression, so why in the world would the government, give over this right to a private corporation and why do they keep it a secret? 

Disclaimer: All articles and letters published on MyNews24 have been independently written by members of News24's community. The views of users published on News24 are therefore their own and do not necessarily represent the views of News24. News24 editors also reserve the right to edit or delete any and all comments received.
 

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
56 comments
Add your comment
Comment 0 characters remaining

Read more from our Users

Submitted by
Lutgen Landman
Kurtley Beale: A life of scandals

Lets take a look at the rap sheet for Kurtley Beale over the past few years. Read more...

5 comments 990 views
Submitted by
Hennie Potgieter
Are we losing our ability to reas...

Why is it that we can get so hyped about things that do not directly concern us, or that we do not understand? Read more...

20 comments 410 views
Submitted by
Jef Front
Corruption in Southern Cape

Advocate Francois Human has exposed various incidents of corruption, bribery, intimidation, political plots and schemes that makes the Mafia look like amateurs. Read more...

3 comments 125 views
Submitted by
Johnny McIntyre
Sticking your head in the dagga

The war on drugs has been raging on for a few decades to no avail. Drug use, especially cannabis, is at an all time high and continuing to grow as increased enforcement efforts seem to have no effect.  Read more...

26 comments 1722 views
Submitted by
Legens Monspubis
Religion should remain in all sch...

Children should be exposed to all religions , both current and past. It should be taught to them on an even basis and particular emphasis should be placed on its history.  Read more...

142 comments 1102 views
Submitted by
Percy_Makholwa
Mazrui and the South African serv...

As much as Ali Mazrui saw in West Africa, the problem of western appetites without complementing and satiating western technologies, the same comparison could easily be made in urban SA. Read more...

3 comments 173 views

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Magical Massinga

Spend 5 nights at the gorgeous Massinga Beach Lodge in Mozambique and only pay for 4 from R13 220 per person sharing. Includes return flights, accommodation, transfers and romantic turndown. Book now!

Kalahari.com - shop online today

Save up to R1000 on Hisense smartphones!

View the large range of Hisense smartphones. Buy today and save up to R1000!

Deal of the week!

Save R1200 on the Samsung 48” smart full HD LED television now only R8799. Buy now!

Toys 4 for the price of 3

Buy 4 toys and get the cheapest FREE! Offer valid while stocks last. Shop now!

Mind blowing prices – As seen on TV

Get mind blowing prices on 1000’s of products! Shop now.

Save 20% on Nivea beauty products!

Buy any two Nivea beauty products and save 20%. Offer valid while stocks last. Shop now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

 

services

E-mail Alerts The latest headlines in your inbox

RSS feeds News delivered really simply.

Mobile News24 on your mobile or PDA

E-mail Newsletters You choose what you want

News24 on your iPhone Get News24 headlines on your iPhone.

SMS Alerts Get breaking news stories via SMS.

Blogs Your opinion on you, me and everyone.

Calais Website keywords automated by OpenCalais.

 
Interactive Advertising Bureau
 
© 2014 24.com. All rights reserved.
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.