Central banks tend to have 2 opposing mandates
Keeping inflation low means raising interest rates, keeping employment high means lowering interest rates.
This means in effect it has no mandate, can always point to one or another mandate to justify setting rates anywhere it likes
If the bank has an inflation target of 2%. That doesn't sound very much, but let’s say the central bank could actually hit its target. If you had £100 in year 1, it would be worth approximately 98 pounds in year 2.
By year 20, it would have lost a 1/3 of its value at 66 pounds, or put another way, things would cost
It’s an emptying of your wallet to the central bank vaults.
You can avoid the banks grasp and theft (by theft we mean inflation) and even benefit from it. The
answer is simple, don’t save. Bring your spending forward, even better if you borrow, because your
debt will be eroded away by inflation.
No wonder society doesn't have enough for retirement, abysmal savings rates and a housing bubble.
We are slowly spending ourselves out of prosperity.
Inflation is not inevitable. The problem is how can firms and individuals plan when the central bank is
messing round with prices. It’s a nightmare for business and investment, resulting in fewer jobs for all.
It also causes endless conflict between employers and employees about how much their pay should
increase by each year, quite often building resentment and destabilising the workforce.
The reason itself for the inflation target is laughable – it’s price stability, but if they really wanted price
stability they would set the inflation target to 0, not 2%!
Inflation is not inevitable.
When the government does not have the courage to raise taxes, it taxes by stealth. The
favoured method is printing money. This is part of the cause of our current economic woes.
Government debt is rising at an eye-watering pace. We are slowly spending ourselves out of
Bailouts are a transfer from the poor to the rich. The central bank guarantees deposits, so that people
don’t care how dodgy the organisation they bank with is, leading to moral hazard. Banks also
know they will be bailed out, meaning they are more likely to engage in risky behaviour. This
should be obvious to all given recent events.
A ponzi scheme is where those who partake at the beginning benefit at the cost of those who
partake last. The central bank could never exchange all the pounds for items of similar value. It is a
form of child abuse.
If you set interest rates too high or low, you will have a mismatch of lenders but no borrowers.
This stagnates the economy, as those who would have borrowed money and employed others
will not do so or loans will be harshly rationed.
For a Central bank who cannot even meet their own inflation targets, what hope do they have of ever
getting the interest rate right?
Is it any more moral to dilute the money in your wallet than the farmer to dilute the milk with water?
The Central bank is a monopoly mandated by law(legal tender), would people use the money if they were not forced to?
Although boring he lists almost every problem created by the US federal reserve.
American viewers only sorry
Most of the interesting stuff on the first half.
Movie is slow and boring and covers somethings better covered in "the evolution of money" But is a basic timeline with parallels on the creation of money. The last 35 mins is quite good
The central bank determines what your car, and house payments will be, if you have a job, is is the largest Creditor.
18 mins in, it explains how banking and fractional reserves began
The bank of England was allowed to borrow as much as it wanted, secured by the taxpayers taxes
Plutocracy ... rule by the rich
The central bank caused booms and busts, the very thing they are supposed to prevent.
Depressions always occur in conjuction with a contraction in the money supply.
Once extra money has been put in circulation, it is difficult to pull it out.