Newsletters : Current Newsletters : 23 January 2012
Thought for the Day

"Give me control of a nation's money and I care not who makes it's laws" — Mayer Amschel Bauer Rothschild

The way to get control of a nation's money is by establishing a Central Bank.

One of the first financial changes implemented in Iraq and Afghanistan when NATO took over was the creation of a central bank. I understand (but have not confirmed) that the rebels in Libya had a Central Bank running within a fortnight of the revolution starting.

The Central Bank then fixes the price of the money it prints through interest rates charged to banks for using this money. This may seem fine but like all price fixing ideas it just will not work. As the world is now finding out it leads inevitably to a boom when the rate is too low followed by the bust as rates are raised.

In a natural economic environment without Central Bank control of the price of money it would find its natural price from time to time and from situation to situation. There is no real price for money to be applied overall which would suit everyone.

The tendency is always to print more money and eventually this gets out of control - as Germany found out in 1923.

We have been watching this play out around the world for the last few years and have experienced it in New Zealand as Michael Cullen eased the Reserve Bank "inflation" guide lines in 2000 and created the extra money flows that made the Helen Clark government look good until, of course, the conditions changed and the bust began in 2007.

The Central Bank concept survives through secrecy and mathematical flim-flam generated by the economics profession to give the illusion control.

Our world wide experiment of using Central Banks is demonstrating that the theory is wrong. And the demo is about to get much worse!

This process is obviously now playing out in Europe and is starting in China as Ambrose explains in the link below.

It will follow (indeed I believe it has started already) in Australia and our overseas customers will all (nearly) be in economic trouble.

The only way to stop this boom/bust trap from continuing to decimate our middle classes is to remove the Central Bank facility and shift to free banking using gold and silver as money.

We could make a start by purchasing gold and silver even if our banks won't.

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Jan 19, 2012, 11:56