Central banking is the elephant in the room.
We all know that it’s there, but very few people are willing to talk about it. Whether you go to the left or you go to the right, no one really wants to talk about central banks, but they should.
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Central banks have been responsible for nearly every economic crisis that has occurred since they were created including the mess we’re in right now with inflation exploding around the world.
Their existence provides a false sense of security and has destroyed many countries through massive inflation, war and revolution. This needs to be addressed because if we are ever going to have any sort of sound money again, then we must abolish central banking and adopt a Bitcoin Standard.
Central banks have a bad track record
Central Banks have been responsible for many economic problems and even more wars, financial crises, and economic depressions.
Here’s a short list of some of the biggest (in terms of impact on the world) disasters that central banks are responsible for:
- The Great Depression in 1929 – The Federal Reserve caused this by raising interest rates too high in 1928-1929 leading to a stock market crash in October 1929; it was then unable to lower them because of political pressures from Wall Street bankers who wanted to keep their profits high; as a result, America suffered through one of its worst economic periods ever until World War II began in 1939 when manufacturing demand increased dramatically; much needed jobs were created which helped boost consumer confidence during this time period.
- World War II – Hitler had been building up his military machine since 1933 when he took power over Germany; however he wasn’t able to actually start invading countries until France fell into German hands after their invasion into Poland on September 1st 1939 (this date is known as “Day One”). After taking over western Europe through military force by June 1940 Hitler then began preparing an assault against Russia but needed more troops first so he stopped trying so hard at invading England instead focusing all resources toward defeating Russia before winter came along with more troops being needed there too because if they hadn’t won Russia today they would’ve lost.
- Covid 19 in 2020 – Central banks around the world printed more money in the last 2 years than in the last 100 years. Something that has never happened before and we are only just starting to see the effects of this with inflation in both the United States and Canada running above 7%. Central banks as a result have started aggressively raising interest rates which will likely crash the stock market and other assets like real estate creating another boom bust cycle.
Central banks are private cartels
Central banks are private cartels. They’re not subject to democratic control, nor do they have the same laws as other corporations.
They can do things like print money out of thin air, which is something no other corporation or government has the right to do.
Central banks are also able to create their own money supply and loan it at interest rates (which they charge in order to profit from their actions).
This is what leads governments into debt—they borrow money from central banks in order to pay for services or purchases that they would otherwise be unable to afford on their own—and results in higher taxes for everyone else later on down the line.
Central banks are generally controlled by other banks
Central banks are not what you think they are. In fact, central banks are generally controlled by other banks. Namely, the Federal Reserve and the Rothschilds have control over all central banks across the world.
This means that most of your money is being controlled by these two immensely wealthy families who don’t even live in America.
The Federal Reserve was created by an act signed into law by Woodrow Wilson on December 23rd 1913 (signed during Christmas time). The Rothschilds own this company which means they can create as much money as they want at any time without anyone knowing about it or having any say in how that money gets spent or invested for profit.
Central banks are agents of the politicians and not of the people.
Central banks are not accountable to the people. They are instead an arm of government, and therefore ultimately controlled by politicians or bureaucrats. In that role, they tend to be far more concerned with keeping themselves in power than maintaining the interests of their constituents.
Central banks are not elected or subject to any form of democratic accountability; they do not have a constituency except insofar as they can influence policy through lobbying or other means.
The Federal Reserve System in America is nominally independent from interference by Congress and presidents since it doesn’t have its own funding, but even so its officials meet regularly with members of Congress and other influential figures (e.g., Alan Greenspan).
Central banks are opaque about their decision-making processes because they don’t want anyone looking over their shoulders—and also because it would expose how little substance there is behind most of those decisions anyway!
Transparency in this way would undermine their authority: if everyone knew how little thought goes into most monetary policy decisions then people might start questioning whether central bankers know what they’re doing at all (or at least question why we should listen).
Central banking is harmful to the economy
Central banks can’t control interest rates, but they can control inflation.
If there is an increase in credit, then the price of goods will increase as there will be more money in circulation chasing the same amount of goods.
This is why we’ve seen in Canada for example real estate prices exploding. People think they’re getting richer but it’s all because central banks have lowered interest rates to emergency levels flooded the economy with money.
This means that we will get inflation, and this has been confirmed by history over and over and over again.
This is the point which makes central banking a danger to economic well-being.
Inflation causes a number of problems to society as a whole:
- It creates uncertainty—because prices are constantly shifting due to inflationary pressures, it becomes difficult for people to predict how much their income will be worth in terms of goods at any given time;
- It discourages savings—whereas before you could count on your money being worth X amount tomorrow (e.g., $100 today = $100 tomorrow), now your savings can lose value is the central bank adds more money to the supply.
- It encourages people’s property rights violations—if I don’t have enough money saved up today but am expecting my paycheck tomorrow at work then I might feel pressured into spending what little cash I do have because otherwise it won’t hold its value through time (due to inflation); thus violating other people’s property rights by taking their stuff without paying for it or asking permission first.”
They are failing miserably at controlling inflation
Just read the news today and you will see these failures in plain sight.
- Central banks: Too big to fail, but failing yet again
- Central bankers have lost sight of inflation
- Record inflation: Which country in Europe has been worst hit and how do they compare?
- How central bankers lost their grip on inflation
- Bank of Canada official says it’s ‘accountable’ for failure to check inflation
- Why did central banks get inflation so wrong?
- Canadians’ inflation worries deepen in blow to central bank
- Charting the Global Economy: Inflation Hits a Record in Europe
- Turkish Inflation Reaches Fastest Since 1998 With Surge Past 73%
- Analysts raise Argentina 2022 inflation forecast to 72.6% -central bank
Legitimizing counterfeit money
The existence of central banks also legitimizes counterfeit money, therefore fueling corruption in public life.
This is especially true in times of war where central bankers will take out loans in exchange for huge fees and interest payments at a later date.
The bankers will then provide politicians with (counterfeit) funds which will then be used to finance wars and bloodshed. Ever since central banking was introduced many countries have gone bankrupt or they’ve been destroyed by war and revolution.
- The Federal Reserve’s Role During WWI
- Central Banking’s Connection To Warfare Is Intimate
- How Central Banks Fund Our Age of Endless War
- The wartime power of central banks
The central bank is a government institution that seeks to control inflation by controlling interest rates and money supply.
However, it has not been successful in doing so because it cannot control interest rates and inflation; it can only try to minimize them through interventionism.
When there is an increase in credit (loans), then you will get inflation which means that prices will rise because there are more goods available than before due to increased investments made by companies trying to make profits off these loans received from banks (which have no reserve).
Central banking benefits large corporations at the expense of everyone else
If you want to understand why central banking benefits big corporations at the expense of everyone else, then the most important thing to know is that central banks are private cartels. They do not answer to the people. Their only masters are politicians, who are in turn controlled by large corporations and other interest groups especially other banks.
Central banks can’t control interest rates because they’re not free market institutions; they’re government-backed entities that set rates based on what politicians want them to be.
Since both parties want low rates in order to create more debt and more inflation (which both increase tax revenue), this means that interest rates will always stay artificially low so long as party A is in power and party B has enough influence over it.
Central banks set up these conditions through monetary policy: raising or lowering interest rates, increasing or decreasing the supply of money available for lending out among banks and consumers alike, expanding or contracting credit availability across different regions of depending on who needs financial help most urgently at any given time – all while maintaining an overall average inflation rate around 2%.
Central Banks are private cartels that work against society’s best interests
They’re not accountable to the people, they’re not accountable to the government, they’re not accountable to anyone—and they are certainly not accountable to the law or the constitution.
Fortunately, there’s an easy way for this cartel-driven system of banking and currency creation to be replaced with one that works according to rules don’t change and a supply that is fixed. A Bitcoin Standard.
As we’ve seen, the central banks are both the problem and the source of all our other problems. They are creating inflation by issuing more money created out of nothing.
Inflation leads to higher prices for goods and services, which in turn leads to a decrease in quality of life for most people.
The central bankers then use this inflationary process to steal wealth from people through taxation (which funds their operations), or by taking out loans at interest from private citizens who need some cash but don’t want to go into debt with a bank account at usurious rates.
As long as there is a central bank, there will be an incentive structure that favors crony capitalism over free markets and consumer choice.
What’s the solution?
A Bitcoin standard.
Bitcoin is the decentralized alternative to the Central banking system described above. It’s a politically neutral, free-market alternative to national central banks, with potentially enormous implications for individual freedom and prosperity.
Want to know more?
I highly recommend the following books that dive deeper into this subject and explain how Bitcoin can replace this mess we have created with central banking.
Check out my Bitcoiner Booklist to learn how Bitcoin is the solution to the failed central banking experiment. I highly recommend The Bitcoin Standard as a great starting point if you are new to all of this.
If you have questions or need more clarification, please leave a comment below or come reach me on Twitter @CraigOnBitcoin.
Have a great day.
Craig
ON BITCOIN is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
