THE ECONOMY: "THE TRUTH BEHIND CENTRAL BANKS' MACHINATIONS"

Wednesday, March 18, 2015

The Economy: “The Truth Behind Central Banks' Machinations”

“The Truth Behind Central Banks' Machinations”

by Shah Gilani  

“Central bankers aren't stalwart free-market shepherds, although that's how they cloak themselves. The truth is they're more like wolves… communist wolves in sheep's clothing. Today I'm going to show you what their game really is. Then I'm going to show you how we'll fight back…

The Central Bankers' Real Game: Central banks aren't free-market enthusiasts. Sure, they may profess doing "God's work," saving free markets from the excesses to which they're prone. But that's utter rubbish – or worse. Central banks are run by central bankers. Central bankers are bankers, and bankers are wolves, not shepherds. It's just not true that central banks are public-spirited entities shepherding the public from predatory packs of profiteering pimps and panderers. In fact, they are the ultimate example of wolves guarding the proverbial henhouse. Here's why.

Every central bank has a mandate. It is to serve and protect banks and bankers who leverage themselves and lend in excess in order to reap greater profits – and too often need bailing out before they collapse. Central banks don't lend to companies or people. They only lend to banks. That's what they exist to do. What's amazing is how central banks are able to lend to banks. They have their governments' green light to simply print money and give it to their bank "constituents."

Sure, sometimes it looks like there are government forces controlling central banks, but the fact that the U.S. Congress still cannot audit the Federal Reserve (despite a strong desire to do so on the part of many leading legislators) – shows how that's all part of the grand facade for the sake of fooling the public. Central banks can print money and give it to banks because they have a standing deal with the governments that are supposed to somehow control them.

Here's the Deal: Governments – meaning the people in power, who want to stay in power – don't want to tax their citizens to pay for the all the stuff they give them to buy their loyalty and votes. And they don't have to, because central banks print the money governments need.

Of course, it's not the government's fault if there's too much money printed and it leads to inflation. That's the fault of central banks printing too much money. Bad bankers!

Of course, it's not the government's fault if there's not enough money printed and there's deflation. That's the fault of central banks not printing enough money. Bad bankers!

Here's a look right through that wool that's been pulled over the public's eyes.

An Alternative to Being Led Astray: Bankers' extraordinary greed caused the credit crisis and the Great Recession. All the too-big-to-fail banks that were either literally insolvent or technically insolvent got bailed out by their central banks. Okay, one – Lehman Brothers – didn't, but it was the sacrificial lamb, offered up to make a point that excess has a price.

If left to its devices the free market would have taken out a bunch of big banks. That would have been really bad, but we could have survived. But we don't have free markets, so all the big banks were saved by their central banks. And to combat deflation, the central banks are doing what they're supposed to: they print money and giving it to banks to heal them.

Governments can't increase taxes on people when they are earning less, but governments need to roll over their trillions in debts and borrow more to fund ever-bigger deficits. So they wink at the central bankers who came up with a new strategy called quantitative easing, or QE. QE is just another blanket pulled over the public's eyes. In this case, central banks print money to buy government debt. That's the nature of their partnership.

Central banks bailed out insolvent banks, and drove down interest rates so governments could refinance and issue more debt cheaply. They then went full bore with QE to justify buying government debt to keep interest rates low to, you guessed it, fight off deflation.

That's not a free market. That's central planning. That's communism. But it's communism for the rich. Because the rich own the assets whose prices are rising, they're getting richer – a lot richer. It's happening all over the world. The divide between rich and poor is expanding exponentially.

Central banks are now not just lapdogs for their bank constituents. Their racket is serving, protecting, and enriching the Owners Club of asset-rich one-percenters everywhere. And that's not going to lead to a revolution eventually?”

- http://www.marketoracle.co.uk/Article49869.html
Posted by CoyotePrime at 2:01 AM