Sunday, July 31, 2016

Central Banks' Total Mismanagement 
Of The World
GoldSwitzerland's Egon von Greyerz sees central banks as leading the world into a black hole with no idea of what disaster they have created .. "Central banks have led the world on a course that could only have one result. And sadly, I believe that we are now very near the beginning of a disaster that will have a bigger impact on mankind than any war, disease or depression that the world has ever experienced. But this extremely serious adjustment to the progression of the world and mankind is not the end of the world as long as there is no major nuclear war. It will change our lives for quite a considerable time but human beings are infinitely adjustable even if the transition will be difficult. Family and friends will be more important than ever. Some physical gold and silver will be the best money to own instead of worthless paper currency. Because precious metals will in the next few years reflect the total mismanagement of the world economy by central banks in their final and failed attempt to save the financial system. This will lead gold and silver prices to levels which will be difficult to imagine today."
LINK HERE to the essay

1 comment:

Anonymous said...

Mad money: parallels with the 1970s Current monetary policies and arrangements are immoral as well as ineffective
Hayek got it right

What had gone wrong? Hayek put his finger on it:

“Money is not a tool of policy that can achieve particular foreseeable results by control of its quantity. But it should be part of the self-steering mechanism by which individuals are constantly induced to adjust such activities to circumstances on which they have information only through the abstract signals of prices”. (Denationalisation of Money, IEA, 1976)

Of course there are big differences between the two periods. Then, policies searched for growth but produced inflation; now, policies aiming at growth produce stagnation.

But they have much in common. Just as in the 1970s, today also, monetary policies are undermining money itself – as a crucial social institution. Current policies help governments by providing zero borrowing cost. They facilitate the growth of the State. They do nothing to help individuals, SMEs, or any other businesses plan their futures. Don’t be fooled by talk of reform; current arrangements suit governments well. As we have seen in the past nine years, they have no intention of changing them in a serious way.

Up to the financial crisis, these policies also helped senior bankers. They turned once great institutions into machines for skimming the cream off successive asset price booms and busts and currency fluctuations from which they – the senior executives – could extract profit. But since 2010 not even the bankers are happy.

Now the rest of us will live in fear of officially sponsored theft – “oh, of course we are taking your money from you in your interests, you do understand that, don’t you?”.

“We just have to threaten to take money from you in order to make you spend it now. On the other hand, we might also give you a huge amount of money – on condition you spend it now. We shall also suggest things you might spend it on and things we don’t approve of. No, we cannot say whether we shall take it back later. Just do as you are told and be good, children.”
Monetary mandarins try to manipulate people

The underlying issue with most of the bankers and economists Martin Wolf interviewed is that, just like their Keynesian predecessors in the 1970s, they are trying to manipulate people through policy levers to do what they, the monetary mandarins, want. They think they know what is in the people’s interests. But people are not like that. They rebel, as they did in the Brexit vote. The monetary mechanism seizes up. This is because they, the mandarins, are using a bad concept of money.