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Are Central Bankers AWARE of the ‘implications’ of their policies?

August 8, 2012

From WHERE do Central Bankers derive their ‘money units’?

Few people on this planet understand the mysterious operations of a Central Bank. To discover the inner workings of these institutions is difficult due to the opaque nature of the policymaker’s words and actions. Today, money units are no longer material units (gold/silver/paper) but mostly virtual ‘digits’. These ‘digits’ are created within the computer screens of a Central Bank’s computer…making our ‘money’ virtual and immaterial. If the electrical power to a Central Bank computer fails or is disrupted, then all ‘money units’ disappear for a time. As of today, some 96% of all money transactions in Western markets are virtual transactions (observed within one’s computer screen). Some 70% of all stock transactions are now executed via high frequency computers. Trading and investing is now a VIRTUAL experience.

I usually ASSUME that those who occupy positions of high authority are AWARE and CONSCIOUS of their actions. But is this a valid ASSUMPTION? Is Mervyn King, Mario Draghi, and Ben Bernanke AWARE that they are creating MONEY ‘out of nothing’? Are they AWARE that our ‘money units’ are immaterial UNITS of consciousness. Are they AWARE that they are ‘counterfeiting’ their own national currencies with their QE policies?
Do they understand the implications of ‘money units’ which now derive from their thinking and have NO material existence? Is it possible that they are ACTING on false ASSUMPTIONS that are not reality (a deception)? What do you think? Do they understand the current NATURE of the ‘money units’ that they create? Let’s give some thought to the idea of QE (quantitative easing).

It is obvious, to me, that QE is a form of official ‘counterfeiting’. Money units are being created (arbitrarily) without any simultaneous WEALTH being created. Basically, QE is an operation where Central Bankers increase their own accounts to allow them to purchase assets with money units that did not exist (in spacetime). If you and I could do this we could purchase unlimited quantities of goods and services with no labor and/or work effort. We could increase our checking account by typing in ‘numbers’ (called dollars, pounds, euros) and then use these money units to purchase whatever we desired.

Would this behavior be viewed by our peers as ‘proper’ , ‘moral’, and ‘lawful’? I don’t think so! Historically, money units are supposed to represent NEW material wealth being created for the markets. Creating new money units with no new WEALTH being created does not improve anyone’s real economic well-being. This suggests, to me, that Central Banks have resorted to official ‘counterfeiting’…with a new innocuous NAME…called QE.

My missives ASSUME that our CENTRAL BANKERS  are AWARE of what they are doing and then DOING their QE to manipulate the global markets purposefully. In other words, these policymakers KNOW what they are doing and still desire to ‘counterfeit’ their national currencies to accomplish their internal goals and objectives. Is this a valid ASSUMPTION?

What is QE in reality? Isn’t it creating new ‘money units’ OUT OF THIN AIR and then using these new ‘money units’ to purchase existing ASSETS? Let’s think about this process that we call QE. What is it? Most pundits seem to lack an understanding of the operational details of this policy. Watch these videos for more  understanding!

WWW.FT.COM/QE  (notice that QE is now accomplished via the computer by typing in new numbers which increase the banking account of the Central Bank). This YouTube video reveals the digital nature of QE today:  QE is now a computer operation…implemented by the trading desk at the Central Bank. The key decision makers (who initiate this policy) are Bernanke, Draghi, and King for Western economies. Notice that new money is now computer generated at the Central Bank trading desks.

If Ben Bernanke and his FOMC committee decide to implement a QE3 policy in the near future, all that needs to be done is to notify the trading DESK at the New York Federal Reserve Bank that the Fed’s System Open Market Account (SOMA) be increased by ‘x’ amount.  This decision than results in NEW money units (dollars, pounds, euros) emerging miraculously ‘out of nothing’. Ron Paul calls this ‘creating’ money out of thin air. Press the MONEY button (after Ben, Mario, or Mervyn give the ORDER)! This seems like official ‘counterfeiting’ to me!

 Let’s REFLECT on what the Central Banks are now doing to create NEW MONEY UNITS. What happens is that ‘digits’ emerge within the COMPUTER screen and enter the checking ACCOUNT of the BANK. These ‘digits’ then become official money or legal tender. Who gets these virtual ‘digits’? You and I don’t get these new ‘digits’. We have to work and labor for our ‘digits’. Central Banks, however, just create these ‘digits’ by fiat (via their consciousness) and then SEND these virtual ‘digits’ to their DEALER bank friends…who then transfer ownership in their existing assets to the Central Bank for these NEW ‘digits’ (now official money and legal tender).
What a game of monopoly for the favorite friends of the Central Bank. All this is intended to manipulate ‘interest rates’ and ‘prices’ and ‘stocks’ within the general marketplace. Is this suppose to build CONFIDENCE within the consumer and investment community?  How can this process be viewed as Capitalism? How can it be viewed as LEGAL (under our Constitution)?
Why not just create ‘digits’ for everyone (say all Americans who have computer banking accounts) to spend and invest as they choose? This could be done simply by increasing the Central Banks digital account (by $trillions) and then sending out a direct deposit to all Americans via the computer. Ben Bernanke and his FOMC committee have created ‘$trillions’ of dollar digits for his TBTF recipients. Why not create some official ‘digits’ for the average working American?

Let’s conclude with these questions:  What is ‘money’ if it is NO THING? Does a NO THING money unit have any meaning for a Capitalistic economy? If ‘money’ is NOTHING then what is VALUE? What meaning do PRICES have if goods and services are denominated in NOTHING? Why have any ‘money’ if MONEY is NOTHING? If ‘money’ is NOTHING then isn’t it totally SUBJECTIVE? Who should administer a NOTHING money unit? Here are some historical money items which have been viewed as real proxies for VALUE? All of these are real physical THINGS. Notice the difference!

Is Capitalism ending? Can our Capitalistic System survive with ‘imaginary’, ‘fiat’, ‘no thing’ MONEY? Personally, I don’t think so! Give this missive some thought as you think about current events. WWW.USDEBTCLOCK.ORG  (notice that total National, State, and Local Deficits now equal $1.8 trillion, our National Debt is almost $16 trillion). If our money units are now ‘no thing’ units, then are not all our Debts and Unfunded Obligations just imaginary numbers within our computer screens? What meaning derives from this System of ours?
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