To understand why we have a Central Bank better known as The Federal Reserve, we have to go back 700 years to the pilgrimage of the richest person who ever lived, Mansa Musa.
If you don’t know who Mansa Musa was, here are the highlights: Mansa Musa is the person who literally put Africa on the map (for Europeans in the modern era). Mansa Musa is the reason why Africa was known as The Gold Coast.
Mansa is another word for king.
Elon Musk, Jeff Bezos, and Bernard Arnaud have Billions of dollars and we know this because their wealth can be quantified through the stock market and the value of their stock holdings in it.
But Mansa Musa controlled unfathomable amounts of gold mines-worth Trillions of dollars by todays valuation. With the recent market drop, the price of gold is skyrocketing due to investors flocking to it. Investors want to have SOME gold as a hedge against inflation.
Now imagine owning vast gold mines! That’s who Mansa Musa was.
As the story goes, Mansa Musa made a pilgrimage from West Africa to Saudi Arabia. His entourage was something the world has never seen before or since.
Musa’s entourage had over 12,000 people and several camels in it. Each of those attendants and camels transported some of his gold. It is believed that Musa’s caravan travelled with 20Tons of gold – or about $1.5Bill as traveling money. But he didn’t bring all of that gold along just to flex, he gave away a huge portion along his journey, traded, and built structures along the way.
Musa gave out so much money in gold that he caused inflation and devalued currency along his route for 10 years.
Now fast forward to the early 1900’s.
Financier JP Morgan once bailed out the United States by giving it a personal loan.
You heard that correctly, 1 person bailed out the United States, by himself, through a personal loan.
After which, Morgan who was tired of the boom/bust cycles of the financial systems called a meeting on Jekyll Island and helped to set up what we now call the Central Bank (or Federal Reserve).
The Federal Reserve has a dual mandate to keep inflation down (the Mansa Musa example) and to keep the dollar strong through policies that lessons boom/bust cycles (JP Morgan example).
Now you know the origins of the creature from Jekyll Island.
-Monk
We spend 12 – 20 years in school learning about every subject, except for money. Then we spend the rest of our lives trying to figure out how to make money or how to grow the money we have.
My approach to financial literacy is to teach it in a way that makes the complexities of finance so simple that your investing actions become instinctive.
To the youth, young adults, and the mothers who raise them,
Financial Literacy: Monk Says… Learn the Game
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