Can someone explain to me step by step how and why central banks are bad...

youtube.com/watch?v=U71-KsDArFM

>why is printing fiat currency too purchase existing items bad
I can't fathom being this retarded. Value comes from the production of goods. If you use it to increase production, the economy improves. If you use it to buy up property and existing items with no added value, it's a detriment to society. The latter is why we have a boom/bust cycle.

Okay, so now we have to look at some basic Austrian economic concepts to understand the next phase. I'm not shilling for them, but they do get a lot of things right about their framework.

Okay, this might be stuff you already know, but let's go over it anyway. So, the rate of interest that the Federal Reserve sets is, and by extension the rate that commercial banks loan and borrow, correlates with the behavior of how your average joe borrows and saves money.

So, when interest rates are high, you have pay back more money on what you borrow so therefore people are far less likely to be able to or want to borrow money from banks. However, when interest rates are low, people have to pay very little on what they borrow so therefore they are far more willing to borrow money for loans.

So, when interest rates are low, people want to borrow and spend money. When interest rates are high, they want to save their money.

(cont)

Okay, so now that we've gone over that, why does this matter. Well, when a single institution, in this case a private central bank, has a complete monopoly on the rate of borrowing/lending, they can artificially determine the spending/borrowing behavior of businesses and your average joe.

So, let's pretend that we had a society where we didn't have a private central bank with a monopoly on the rate of credit. So, let's say a bunch of businessmen decide to get loans to fund a bunch of projects at the same time. But it turns out that there's enough money in the economy to support all these projects.

Well, some of those business men would go out of business and people would lose their jobs. Then those assets would be put into the hands of new people and the rate of interest would naturally go up as banks would be less likely to be willing to loan and depositors would be wanting to save their money in order protect it and spend it at a later time. Those depositors would be more willing to wait until interest rates were favorable to borrow for business loans or mortgages, etc.

(cont)

However, when you have a central bank artificially dictating the rate of interest, banks and depositors don't get an accurate idea of how much money is available in the economy to fund various projects/loans. All they see is that there is a low rate of interest so they're more inclined to borrow, even if otherwise the rate of interest would be higher without an excess of money being pumped into the economy by the central bank.

So, bubbles will inevitably form where loans are made and jobs created that require a continued flow of additional money being pumped into the economy from the central bank/government treasury fractional reserve method that I mentioned earlier.

So, now that the interest rates have been kept artificially low for such an extended period of time, far more economic resources have been invested into projects that otherwise would never have existed, right? If the rates were based on people's natural behavior, that money and those resources would be invested into other parts of the economy where they would be more needed due to supply and demand of goods and services.

(cont)

So, now we're going to discuss open market operations. As we've discussed, the federal rates determines the rate of interest. But it doesn't just lower it, of course. They can lower it by buying more treasury notes from the Treasury as mentioned earlier. But they can also lower or raise the interest rates by selling or buying existing treasury notes from commercial banks.

So, let's say the central bank wants to lower interest rates another. They can buy existing treasuries notes from commercial banks so those banks will earn money from the sale that increase the total supply of money in the economy.

Vice versa, if the central bank wants to raise the interest rate, they will sell existing treasury securities to commercial bank so the money from that sale gets pulled out of the economy and back into the central bank, thus decreasing the total money in circulation,

(cont)

So why does all this matter? Well, this is the heart of it. If the central bank can determine when the economy contracts and expands, they can determine whether businesses succeed or fail through that. This will also effect the jobs of people who are working on projects that are being funded by loans from commercial banks. Not only that, it effects people's ability to pay their mortgage and even student loan debt.

So, let's say that the central bank keeps interest rates artificially lower for a long period of time. More and more projects/businesses are created through loans from commercial banks and more and more jobs are created into those sectors of the economy. This is all money, resources and manpower that might be used elsewhere or being saved for the future at a better time to use them when people have more money saved up to spend on those products.

(cont)

So now those people with businesses are dependent on the federal reserve to keep interest rates low so that there's enough money in circulation to be able to support the cost of their projects. The same goes for the construction workers, etc, of those projects whose job depends on the continued free flow of credit at a low interest rate, whether he knows it or not.

Meanwhile, the family also depends on an expansionary money supply through low interest rates so that there's enough money that they can earn from their jobs to pay off what they owe for their next mortgage payment.

(cont)

So what happens when the Federal Reserve suddenly decides sell treasury notes through open market operations and thus suck money from banks, that would otherwise be used for loans, out of the economy and back into the central bank? Well, the money supply shrinks.

Suddenly, there's not enough money for the businessman to pay for his loan payments to the bank. The construction worker loses his job and his family no longer has enough money to pay for the cost of their mortgage payments, right?

So now the concept of collateral becomes important. Obviously, banks just don't loan out money without some type of asset that they can take back in the event that the borrowers can't pay back the loan.

So, all these people who can't pay back their loans, right... not only do they lose their jobs and their source of income, but they also lose the collateral that they put up in the first place.

So, the family that invested money for years and years into this house, not only doesn't get any of that money back but loses the house entirely to the commercial bank that gave them the mortgage loan.

So, the Federal Reserve pumped up the economy through lower interest rates and an expanding money supply. Then right when people were depending on that flow to continue in order to complete their loans, the rate was raised and the rug pulled out from under them. So not only are they poorer because of how much money they've invested into their houses/projects/businesses, etc, but they've often lost out on the only the real resources/real world assets that they actually had in the form of collateral. See what i'm saying, OP (if you're still there)?

Central Banking is literally Communism. It means you control the economy i.e. people. To do that you need to take away Gold and Silver then you can print fake Money. Jews want war time so they have a reason to control the market.

Then of course, after the common man loses everything he owns through this scheme and the banks now own all of those resources (in the form of money, your home, your assets, etc), the central bank will just start to expand the money supply by lowering the rate of interest again.

So, now the cycle just starts all over again. However, there is another consequence that we need to go back to. While during the contraction period, people's purchasing power might have very temporarily regained some of its value, it doesn't last of course. The raise in interest rates lasts for such a short period of time, only long enough to screw everyone, that it doesn't really benefit the common man in terms of price stability. Plus, the central bank doesn't have to raise the rates that high in order to pull this off, so the temporarily decrease in store prices isn't that significant.

Now that the process has started all over again and low interest rates thus increase the circulation of money through fractional reserve banking loans, prices will continue to skyrocket as our purchasing power decreases even more.

(cont)

Checked fpbp

So, this is a very basic summary of how this works, and maybe some Anons will want to give some details about how it works in practice. There's definitely a lot more that goes into this whole system.

For example, the petrodollar is a massive topic that relates to this that deserves plenty of attention all to itself. Because other countries rely on holding U.S. dollar treasury notes (or at least they used to, that's been slowly changing over the past decade) in order to buy and sell oil, we've been able to export a lot of this inflation abroad to other countries. This is one of the reasons that inflation, while increasing rapidly, hasn't completely gone to hyperinflation levels yet. Although, that very may be coming in the next decade.

Anyway, sorry it took so long to post. I have a severe illness which makes doing basic tasks very difficult, so I have to take my time. If your'e still there, OP, I hope I helped a little. Maybe i'll post a few videos/lectures that explain this better than I can.

And yes, the central banking system is a tenet of Karl Marx and Friedrich Engels' Communist manifesto. I'm sure most people here realize through Antony Sutton and other works that the Bolshevik Revolution was funded by bankers like Jacob Schiff, Max Warburg and Olof Aschberg, among others.

Communism was never about trying to create a utopia for mankind that was someone hijacked by psychopaths like Lenin, Trotsky and Stalin. It was also meant to centralize all power into the hands of the state (which you really can just think of as another corporation that has the power of violence to back it up). When all power is centralized into a single institution, then people have truly becomes slaves.

People forget that the Soviet Union did have a number of private businesses that worked hand in hand with the state. Corporations will continue to consolidate until there's one single corporation running the entire world that's basically just merged with the state, similar to how central banks are both public and private institutions.

Thank you user for taking the time to post this, although awkward to read it does get the gist across quite well. It's a shame that it's so difficult to explain this concept succinctly while also maintaining the proper depth and information that's required because holy fuck Central Banking is clearly a scam to any nation, full stop.

What book is that?

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I have £1 you have £9

We go to the market, there are 10 potatoes

You get 9 and I get 1

I go home and print £80 for myself

The next day the market had 10 potatoes, I now get 9 potatoes and the other man gets 1

> Fiat money is leverage and has no value beyond relative

Say I produce fertilizer and you grow potatoes

I make 12 pounds of fertilizer and you make 12 pounds of potatoes

At the end of harvest I trade you 6 pounds of fertilizer for 6 pounds of potatoes

Say a bank used credit notes to represent this, they print £12 to cover the transaction, I loan £6 with my 6 pound of fertilizer as collateral and the farmer does likewise

Very simple

Now say the bank prints another £12 and uses that for itself. Now I can buy 3 potatoes, the farmer can buy 3 pounds of fertilizer and the bank can buy 3 of each and start its own complete operation.

This is interest

> Interest creates what I call red money, it has no productive backing and is merely a way of gaining leverage. We are at the stage where red money accounts for 99% of money in existence. This is money that will never ever be printed

Despite being convoluted as fuck with the likes of derivatives etc. Once you understand how simple the core mechanisms are it's just stupid simple and very obvious as to why it works so well.

What this is and it's conclusion is so blatant that to say it would be an insult to even mediocre intelligence

youtube.com/watch?v=TxcjT8T3EGU

Economic Cycles Before the Fed | Thomas E Woods, Jr.

youtube.com/watch?v=8Kt2De98Bck

The Creature From Jekyll Island | G. Edward Griffin

Also, the stock market is merely a money laundering operation to introduce the leverage gained through usury to the real economy.

> I pay with red money from interest

> I get the black money from the companies productive labour in return

Always find it mad why so many supposedly smart people coom over their own financial destruction.

With stocks the house aways wins

A History of Central Banking and the Enslavement of Mankind by Stephen Mitford Goodson.

Well done to central banking user for laying it out it layman's terms.

Its a question of simple maths.
You lend 1$ to john and 1$ to mark and both ask them to repay 1.5$.
You are the only one creating money and john and mark are the only ones you gave money.
What happens? evident debt.
john and mark can repay you, only if they succed in taking the other's money.
What happens when the inevitably cannot repay fully? the borrow more.
Endless exponential loop of debt is the inevitable consequence of non gold(or silver) based central banking system.
This means they have absolute power through the banks (who are in the end the one with the most control as the central bank generally follows their demand).
They can send the police to recover the debt if you dont comply. They can ruin a state, a company if it does not comply. You want a loan to concurrence mr shekelstein shitty monopoly? Too bad your project is suddenly not viable. You want a countryside home with 5 white kids and a healthy lifestyle? Take a loan and wageslave untill your wife is 30.
Manipulating interest rate, using debt as a blackmail,denying or accepting to loan someone, it gives absolute on everything. The politicians are these men lackeys, and you need to suck a lot of circumcised dicks to be able to get on mr shekelstein's media and get his loan for your campain. And this is just the money aspect, not even talking about the influence one

Also, deflation is natural as we become more productive old money should become more valuable.

When there is neither it means all productive gains are being swallowed by newly created leverage.

When there is inflation it means old and newly created leverage is being swallowed up by the money printers.

This is why in times of hyper inflation you will always see massive financial consolidation.

The house always wins

Shame nations are made of common households anymore and are made of competing houses.

Another thing that should be mentioned is the aspect of insider trading when it comes to this scheme. Let's you're a member of congress or the Council on Foreign Relations, for example, and you the Federal Reserve chairman or one of the governors on the board also belongs to the CFR.

Well, you're going to get a heads up on what the federal reserve is going to do in terms of interest rates before anyone else. In fact, they often will give false signals to the public to manipulate them into selling stocks in a panic or buying them up as they see fit,

So, you know that the Federal Reserve is going to raise interest rates dramatically beforehand. Well, you sell your stocks and wait for the panic during the contraction. Then during that panic, you buy up those same stocks for pennies on the dollar.

This is what Nathan Mayer Rothschild meant by saying that the time to buy is when there is blood on the streets.

We've seen this throughout history with this family. Like how Nathan Mayer Rothschild received advanced word of Napolean's defeat at the Battle of Waterloo, and then began dumping government consols in order to stimulate a financial panic. The public thinking that Napolean had won began to sell everything. Then afterwards during the contraction period, Nathan Mayer Rothschild basically bought up half the British economy. Of course, we already know that they were principle owners (regardless of what families may be above them *cough* black nobility) of the Bank of England at that time.

There are so many ways that they can screw us with this system. Even not taking loans and not playing in the stock market doesn't work because with low interest rates, you can't save enough money to cover the costs of increasing inflation.

They really got our balls in a vicegrip.