Is the ongoing financial crisis positive or negative for central bankers?

[gu3st]

From what I understand money in most of the western countries is backed by nothing but someone’s pledge of debt. The more loans and therefore debt is created the more money there is in circulation. No debt = no money. In other words most western countries have a central bank and practice fractional reserve lending.

Also, the central bank model has been largely based on the original central bank in England: Bank of England, as the original ambitious central bankers (Rothchild’s or whatever) tried to essentially take control of money in most of the world. They ultimately succeeded in doing so in USA as well in 1913 by establishing the Federal Reserve.

As the theory further goes, the Great Depression was not an accident, but was orchestrated by the Federal Reserve as it contracted the money supply (called in existing debts and stopped issuing new loans?).

Bottom line is that by having this monopoly on money, coercively enforced by the government as their partner, they are instituting a hidden tax that is the inflation and exercise the kind of control over the market which as a result has a steady transfer of wealth from the open market actors at large to the central bankers.

Based on all this I am already guessing that the answer to my question is that the crisis is positive for the central bankers, that these are the days that they feast the most, this is when the transfers of wealth are most dramatic. Even worse, the ongoing crisis and a potential crash or a depression is going to help them institute an even more totalitarian regime by offering themselves through the big government as the saviors of the people who suffered a terrible free market failure (nevertheless that their involvement caused it).

But the reason I’m still asking is simply this. If free market is like gravity, something that works the way it does no matter how many people imagine otherwise and which the good economists who understand the gist of it can predict it, then the central bankers, obviously, don’t really have the power over the market. The market may have the power over them. The only reason it seems as if they are in control is because they’ve manipulated the gun holders of the government to enforce their centralized monopoly over the very foundation of the market: money - the means of exchange.

So is there something about this whole crisis that could indicate that the market has done something which actually IS NOT in favor of the central bankers, but instead in favor of the free market and the people themselves? Is there something about the current crisis that actually threatens their power and raises some hopes that out of all this collapse we will see a freer market emerging?

Thanks (and sorry for a rather long post, I had to explain where I’m coming from with regards to my view of the role of central bankers).

[therealjjj77]

From the central banker’s standpoint, this is about collateralizing capital: taking allodial ownership of all capital. From that standpoint this has been a complete success. (Understand that the money means nothing to them. It is simply a tool to further this process.)

They took huge leaps and bounds these last few years toward their ultimate goal. First, they pumped up the perceived value of homes and increased the percentage people owed on their homes. They increased this to the point that it was higher then the true value of their home. Then when everyone was in the game and no one was left to sell a house to, the market drastically dropped the price of homes back to the true value(possibly even below). And so now many Americans owe far more then they own. If the game is about increasing the vested interest the Federal Reserve has in our property, then this was a home run. However, the ones that did 95% of the work in this process(AIG, Fannie Mae, Freddie Mac, etc.) are now the ones taking the loss while the Federal Reserve even makes further gains by purchasing more securities into our government to nationalize these institutions. This gives them even more of a vested interest and control of the strings within our government.

To put the control of all property in the hands of a small few, with us as the managers under the scrutiny of our corporate government, this must be more then they could have dreamed it would come to.

[billott1]

You are absolutely correct in it being an overall positive for the Federal Reserve and its banking cartel. I don’t like the home run analogy. This current “Crisis” is a bases clearing double for the Federal Reserve followed by 2 walks and it is still batting with 1 out. The Federal Reserve is about to wrestle complete control of the largest, wealthiest and most dynamic financial system to ever exist. Once they get the entire financial system under their control then they will control every politician in the entire western world not just the US as they can in months destroy the financial backers of any politican. With that power they can extend it to Anti-Trust and other law enforcement.

Look at the situation now. In the last 3 months Bush, the Treasury and the Fed have taken control of the two government sponsored enterprised, made the purchase of a giant investment bank profitable for the Morgans, bailed out Indy Mac, bought AIG, etc and ALL WITHOUT CONGRESS!!! So CONGRESS is bypassed and the President appoints the courts. So we are left with the Fed controlling the executive. It is scary but when you think about it that is the ultimate goal. The home run in this case.

There is one out though. The Congress is getting nervous but looks too chicken to defund the whole thing. I would not be suprised if the courts shutdown congress.