Business

Traps of the Central Bank and We, the Revenue Units

“Unfortunately, no one can be told what the Matrix is. You have to see for yourself.” ~Morpheus in the movie Matrix

The Oxford English Dictionary defines “cheating” as “legal trickery, trickery, abuse of legal forms; the use of subterfuge and deceit in debate or action; subtlety, sophistry, trickery.” You don’t need to read any further than “legal trickery” to understand the overlooked impact central banks have on us revenue units. But perhaps more worrying is where central banks seem to be heading.

A quick review of the role of central banking with respect to currency informs us that a global monetary system dominates and controls all other systems in the world. Much like the 800-pound gorilla in the living room, this fact becomes impossible to ignore once you see it.

Just as it is impossible to fully understand the planet earth without realizing the role of the solar system that contains it, it is also impossible to fully understand money apart from the monetary system.

The global monetary system is a network of 17 central banks around the world, of which the Federal Reserve Bank is the US. Central banks are the only banks capable of issuing currency (a private product we pay for to use), issued through “fractional reserve”. bank”, loaned into existence, and repaid with interest. This formula, called the “expansion multiplier” in the Federal Reserve pamphlet, Modern Mechanics of Money, multiply the profits of the system builders and their cronies.

Currency leaks from the government level to commercial and local banks when a country’s government borrows money from its central bank. When a business pays off a business loan plus interest (also known as debt service), it passes the bank loan charges on to its customers as increases in the price of goods and services. Over time, what started out as “simple” interest becomes “compound” interest, which, in turn, drives prices up at an ever-faster rate.

As a result, we income units must work more and more and pay more for the same basic goods and services that people in the 1950s and 1960s paid far less for. This exponential increase in the cost of living has become evident in the real estate and insurance industries.

once in power further power is needed to stay in existence.

The 2008 economic crisis put the Fed to the test. It used the desperate measure of dumping trillions of newly issued money into a failing monetary system through a series of quantitative easing (QE) to “stimulate” the economy as well as its position of power. His monetary strategy merrily steered most Americans down the yellow brick road of semblance of recovery and wealth.

However, like the Wizard of Oz, appearances are often deceiving. In reality, the excess of newly issued currency contributed to a deeper devaluation of the dollar (now worth less than 3 cents). Going forward, the Fed would have to keep up with what QE had started. To continue to ensure liquidity in the market, increasing amounts of currency would have to be injected into the system.

Here it is where it gets interesting. By all accounts, in order to maintain ongoing liquidity, the Fed’s tactics have advanced to aggressively buy government assets, company shares, and “toxic” real estate, contributing to double-digit rise in the stock market. Increasingly drastic measures provide a type of expansion that puts the economy at risk of being swallowed whole by the financial sector. Think: increased concentration of power.

This is why:

“So central banks have a problem here, now they are ‘forced’ to buy assets to avoid market declines, but one should ask ‘who will they sell to eventually?’ The answer, of course, is ‘no one’ because there is no one big enough to take these assets off their books.” Bill Holter, central banks will destroy their own currency by doing what they do… creating currency and credit. From here, the faster you run, the faster the Boogeyman catches you!, April 22, 2017

The Federal Reserve has the legal authority to endlessly buy assets, for which it can then drive up prices that virtually no one can bid on. Higher costs of living due to higher inflation do not translate into a rebounding economy, contrary to popular opinion, and especially for the majority of Americans without assets.

As long as someone gets a paycheck, they seem to care little about the system that produces it., an entrenched system that owns and controls the ability to create an unlimited supply of money (new credit). Also, if central banks decide to transition to blockchain technology, as discussed in my recent February and April blogs, it would not be a decentralized application, like Bitcoin is. Instead, blockchain technology would simply enhance the already centralized system of central banking.

With each successive economic downturn, the Federal Reserve doubles down on minimizing the economic impact on society. Downplaying the economic impact is tantamount to the Federal Reserve taking more and more control of the situation to maintain its power, and in an attempt to counter the continued exponential loss of value in all fiat currencies. The role of the central bank is like a snowball that gets bigger as it rolls downhill; I wonder if anyone sees what I see.

“Only the little secrets need to be protected. The big ones are kept secret by public disbelief.” ~Marshall McLuhan, author

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