March 18th, 2015
in Op Ed
by Shah Gilani, Money Morning
Central bankers aren't stalwart free-market shepherds, though that's how they cloak themselves.
The truth is they're a lot more than just communist wolves in sheep's clothing.
They're emperors of a new global regime that goes by the name "The Owners Club."
Today I'm going to show you what their game really is.
I'm going to show you how they play it, who benefits, and who will end up suffering so much that they'll spark a global revolution...
Free Agents (a.k.a. Central Banks)
Central banks aren't free-market practitioners.
Sure, they profess doing God's work, saving free markets from the excesses they're prone to, but that's utter rubbish or worse.
Central banks are run by central bankers. Central bankers are bankers. Bankers are wolves, not sheep.
It's just an act that central banks are government-affiliated entities shepherding the public from predatory packs of profiteering pimps and panderers. They are the ultimate example of wolves guarding the proverbial henhouse.
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 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, who want to buy votes, buy goodwill, buy the public's perception that they run a good government - don't want to tax their people to pay for the free stuff they give them to buy their loyalty and votes. And they don't have to, because central banks print the money those governments need.
Of course, it's not the government's fault if there's too much money printed and there's 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 iron curtain that's been pulled over the public's eyes...
We've been experiencing deflation, not inflation. Not just here in the United States, but globally.
Why aren't prices rising? Why aren't wages rising? Why is global demand so lackluster?
Because 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 their central bank bailouts. (Okay a few didn't, but they were sacrificial lambs, supposedly to make a point that excess has a price. That's a lie, but now's not the time to retell that story.) Consumers got jack squat.
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. The banks and central banks wouldn't have.
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 do to combat deflation. They're printing money and giving it to banks to heal them.
And because governments can't tax people more when they all have less, and because governments need to roll over their trillions in debts and need to borrow more to run bigger deficits, they wink at the central bankers who magically came up with this thing called quantitative easing, or QE.
QE is just another blanket pulled over the public's eyes. QE is central banks printing money to buy governments' debts. That's the nature of their partnership.
Central banks, which flat-out bailed out insolvent constituent banks, drove down interest rates so that the interest paid by governments on the debts they were rolling over and on new debt issuance, would be dirt cheap, then went Full Monty 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?