Central Banks, How The Rich Stay Rich Pt 1

Central Banks, How The Rich Stay Rich Pt 1

Photo From moneyfornothingthemovie.org

Central Banks are typically THE most powerful engines that create economic inequality.

Even the name “central bank” is mostly phony. Their most important function is not banking at all. It is about money creation and distribution, even before it becomes anyone’s income. Wherever central banks exist they are the wellhead of where all money comes from.

These money creation and distribution institutions are given banking functions by governments to obfuscate their purpose, confuse ordinary people and make it easy to loot them, transferring wealth into private hands, (read the rich) or to governments themselves.

If you only remember one thing about money in your life, remember this, what we call “central banks” have as their primary function the production and distribution of money, although on rare occasions, when there is too much money in circulation, it has to vacuum it back in. And none of this is in any way a function of a bank.

All Central Banks have things in common and all have differences. I will pick the US central bank, (the Federal Reserve) because it is in a class by itself the biggest, most important and scamiest of all of them.

At the heart of Central banking is the knowledge that the product that they create (money) and distribute, will determine to a very great degree, (when it comes to money) who gets what, who will win and who will lose.

If publics everywhere knew this, central banks would be perhaps the most controversial institution in every country.

So the first order of business for central bankers everywhere, is to hide or obscure what they really do. One of the ways they accomplish that, is by giving themselves some banking functions so they can call themselves a “bank”, a complex institution, (in their case the more complex the better) so that ostensibly only top professionals can understand what it is that they do.

Public stay away.

The most important function that these institutions give themselves, is as a clearinghouse bank to facilitate money transfers within a country’s banking and financial system and with other banks abroad. While that is a very necessary function pretty much everywhere, it is also pretty non- controversial and has only limited possibilities for the discretionary direction of wealth to one group of people as opposed to another.

But by commingling its function as a clearing bank with the production and distribution of money, these institutions can now call themselves Central Banks.

And the commingling of its functions serves to confuse people as to what their most important function really is. The American central bank is the grand champion of obscuring their function by using misleading nomenclature.

The US Central bank is privately owned, by its own very grudging admission. It was only when Bloomberg sued the Federal Reserve under the Freedom of Information Act, for the scammy “loans” it gave to foreign banks, (after the banking meltdown in 2008) that they were forced to admit that the various Federal Reserve Banks are indeed private institutions.

That happened when the Federal Reserve Banks refused to give Bloomberg the information it sought, because they claimed that as private institutions they did not have to comply with the Freedom of Information Act.

But the Fed still calls its banks Federal Reserve Banks, although they are no more federal than Federal Express and have no reserves whatsoever.

When the Fed gets ready to set interest rates, (a function it gives to itself) which has nothing whatsoever to do with the creation of money, and is only tangentially related to its distribution, it does so through the “Open Market Committee”.

This committee is not “Open”; (in fact it meets in secret) and its meetings have nothing whatsoever to do with markets. But “Open Market Committee” sounds nice and makes people think that this is way too complicated for me to understand.

Public stay away.

While thanks to the Bloomberg lawsuit we now know the Federal Reserve Banks are privately owned, we also know that their owners are banks themselves.

What we don’t know is which banks own the Fed and among those who do, who owns what. Since all of these institutions are private, no one has a right to know this information.

And then among the banks that do own/ control the Fed. who are the people who own/ control the banks?

While there is endless speculation on the Internet about these questions, my experience has been that those tiny few who know, don’t speak and those who speak don’t know.

At the heart of all of this however, is the curious fact that ownership of the Fed is kept so secret AND that it controls both the enormous power of the creation of money and who that money goes to.

Anyone with an interest in the money in their pockets, as well as those who want to know who creates money and once it is created who gets it, and what relationship exists, if any between those who own/ control the Fed with members of their government, should want to know.

Here is Part 2.