Central Banks

[GostHacked]

Banks don't print money. Mints print money.

You don't even need to 'print' money anymore. Electronic credits.

[Pliny]

You don't even need to 'print' money anymore. Electronic credits.

Every credit created for one person is a debit created for another.

I think it is easier to see that if a central bank creates a credit and loans it to the government then the central bank is owed a credit. If it loans it to the commercial banks then the commercial banks owe a credit.

The credits are distributed to the public and the credit is owed by the public to the central bank.

The government extracts the credits from the public out of the GNP, through taxation, and pays the credits back. It uses some of the credits itself and provides services with some of the credits it collects. It tries to collect more taxes than it uses or spends. It doesn't usually pay off the debt to the central bank but only services the loan by paying some of the interest. The central bank is happy to be earning extra credits in interest from it's loans and adds them to their balance sheets.

The commercial banks make credits by charging interest on their loans of credits over and above the interest they pay to the central bank for lending them credits.

Not only are all the credits in existence owned by the central bank but the interest on it's loan of credits is an excellent source of earning even more credits for themselves. If Government needs to borrow more, the central bank just creates some more credits to lend it. That is why you will hear the term that fiat currencies are debt instruments. Electronic credits are also a debt instrument.

The owners of the central banks are content with the system and won't demand their loans back. If they are forced to they may foreclose on the country. That just means they will throw out the current government and put one in that will play the game.

As a citizen of government you get to rent things for awhile but the owners of the central banks basically own everything.

PS: You are not supposed to know this, by the way, so don't say I said it. Best to just keep it a secret amongst ourselves. Besides we live in a great country - who could complain about this arrangement.

Edited August 9, 2009 by Pliny

[Pliny]

central banks good or bad?

ANDREW JACKSON

like I said, bad.

Andrew Jackson - one of my favoritist Presidents.

[Pliny]

the bank already does issue it's own 'currency' representative of government currency.

The central bank does not commercial banks.

[Zachary Young]

Central banks are to blame for inflation and the business cycle.

[Oleg Bach]

Central banks are to blame for inflation and the business cycle.

Canadian banks wanted to merge. It was better than they did not merge..If attacked by hostile forces from the economic vortex of evil...at least they can pretend they are different concerns - realtiy has it we have but one bank. Just don't tell anyone - even those check cashing places for white and black trash are quietly controlled by the central bank...but in the meantime we can continue to pretend that our banks are spread out and there is a difference in them.

[Pliny]

Central banks are to blame for inflation and the business cycle.

I agree with both of these statements. I would be interested in your take on why a central bank is to blame for the business cycle.

[Pliny]

Canadian banks wanted to merge. It was better than they did not merge..If attacked by hostile forces from the economic vortex of evil...at least they can pretend they are different concerns - realtiy has it we have but one bank. Just don't tell anyone - even those check cashing places for white and black trash are quietly controlled by the central bank...but in the meantime we can continue to pretend that our banks are spread out and there is a difference in them.

Of course it is a heavily regulated industry and is basically a cartel that has quashed all competition. I don't understand why there isn't an outcry form the progressives about this fascistic structure???