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The “Business” of Central Banking—Usury and Tax Farming
The “Business” of Central Banking—Usury and Tax Farming
Central banking is “a great business to be in, where you print money, and people believe it.”
That’s what the head of New Zealand’s central bank said recently in an unscripted moment of candor.
It led me to wonder about the nature of this strange “business.”
Let me put it into the simplest and most concise terms.
- Central banks create fake money out of thin air and loan it to governments at interest.
- Governments use violence and threats of violence to extract taxes from average citizens to pay the interest on the fake money the central banks created out of thin air.
- Like the mafia, they can deploy violence to ensure there is no competition to their privileged racket.
That’s the unvarnished truth about central banking.
In short, it’s the business of usury and tax farming.
(To me, a more practical modern meaning of usury is “enslaving people with financial trickery.” Central banking clearly fits the bill.)
The central bank is a powerful wealth transfer mechanism that enables governments to harvest the productive efforts of their citizens efficiently and surreptitiously.
The central bank’s currency debasement transfers wealth from savers to those closest to the money printer, namely governments and their cronies.
The central bank’s real mandate is to transfer as much wealth as possible via currency debasement to the political class without causing alarm among the plebs. Ideally, it happens gradually so nobody notices, like a child taking only a little money out of his mother’s purse each day so she doesn’t notice.
However, sometimes their theft spirals out of control, and it’s impossible for the plebs not to notice.
Consider this.
The Federal Reserve—the central bank of the US—has printed more fake money in recent years than it has for its entire existence.
…click on the above link to read the rest of the article…
Supply v Demand-Side Economic & What is Never Discussed
COMMENT: Usury, first the Fed starves we savers for return for 18 years with their zero percent interest rates and gave us two giant stock market crashes in that intervening period.
The lack of return caused us to cannibalize our savings and trillions of savings lost thru the stock market crashes and ditto home equity. Then property taxes explode.
Now even the cost of funds is still at historic lows credit card rates move from 8/9% to 12% in a matter of months.
What are Grandma and Grandpa to do? Knowing what the Feds original charter was is not an answer because they have become the master manipulator for the wealth transfer from the people to their greedy cohorts.
Have followed your public work since well before your legal problems and greatly appreciate your cycle work but the wealth transfer must stop and some jail sentences applied and claw back enacted.
Or is the wealth transfer already accomplished and the taxpayer/consumer left holding the bag?
Martin, thank you for your efforts.
LL
REPLY: I fully agree. This is the battle between Demand v Supply-side Economics. This age of “New Economics” that was ushered in by Marx and Keynes, justified that government had the power to manipulate society to achieve their goals. The idea of raising and lowering interest rates to influence demand has utterly failed. The 800-pound gorilla in the room is the $200 trillion+ of sovereign debt around the world. Demand-Side Economics cannot possibly work when the biggest debtor is government and the raising of interest rates only increases their deficits that come back as tax increases reducing the net wealth of the people and lowering economic growth.
…click on the above link to read the rest of the article…
“Don’t Owe. Won’t Pay.” Everything You’ve Been Told About Debt Is Wrong
“Don’t Owe. Won’t Pay.” Everything You’ve Been Told About Debt Is Wrong
The legitimacy of a given social order rests on the legitimacy of its debts. Even in ancient times this was so. In traditional cultures, debt in a broad sense—gifts to be reciprocated, memories of help rendered, obligations not yet fulfilled—was a glue that held society together. Everybody at one time or another owed something to someone else. Repayment of debt was inseparable from the meeting of social obligations; it resonated with the principles of fairness and gratitude.
If one debt can be nullified, maybe all of them can.
The moral associations of making good on one’s debts are still with us today, informing the logic of austerity as well as the legal code. A good country, or a good person, is supposed to make every effort to repay debts. Accordingly, if a country like Jamaica or Greece, or a municipality like Baltimore or Detroit, has insufficient revenue to make its debt payments, it is morally compelled to privatize public assets, slash pensions and salaries, liquidate natural resources, and cut public services so it can use the savings to pay creditors. Such a prescription takes for granted the legitimacy of its debts.
Today a burgeoning debt resistance movement draws from the realization that many of these debts are not fair. Most obviously unfair are loans involving illegal or deceptive practices—the kind that were rampant in the lead-up to the 2008 financial crisis. From sneaky balloon interest hikes on mortgages, to loans deliberately made to unqualified borrowers, to incomprehensible financial products peddled to local governments that were kept ignorant about their risks, these practices resulted in billions of dollars of extra costs for citizens and public institutions alike.
…click on the above link to read the rest of the article…
