The Most Dangerous Alternative Financial Media Meme- “Central Banks are Losing Control”
Some commentators insist that central banks are losing control due to the excessive issuance and purchase of debt, giving false hope that the “system” will collapse soon and free markets will reign in the post collapse aftermath.
Dave and I discussed a darker more totalitarian view of central bank intevention that examines how, rather than losing control, they perhaps are gaining more control with pre-bailout tactics like purchasing equity shares in companies and thereby influencing not only equity markets but corporate policies as well.
Buying of equities by central banks is particularly troubling. They can buy control which means they can select the directors and management and thereby set the policies of the company, including financial policies that would require the company to issue bonds that the owning central bank or other central banks could buy with money printed out of thin air. THEN the company can buy back shares with the proceeds of bonds it issued causing the price of the shares to rise and making the directors banks and govt rich, but adding no real value to the economy.
With central banks/governments as owners/customers, companies can operate without concern for profit. Under such a scenario companies don’t have to create value for customers, it only needs to create value to its government customers. Once companies have governmnets as partner/owners they can get special favors (debt write offs) and do favors for governments in return (create special products, give access to customer data).
Boosting asset prices without a corresponding addition of value, does not help the economy, it only enriches those holding the appreciated assets and creates wealth inequality.
As such, a rising stock market becomes detached from the declining health of the economy.
Troika of Government, Central Banks and Media to control markets
Operators of rigged systems don’t lose control, unless they are removed from running it. You dont beat the casino at the casino- The only way you win is if you play by the rules of the casino.
The only way the casino loses is if play out side the casino, the casino is closed down or burns down AND new owners are put in place.
After each collapse the same entities gain more power, they put in more controls, more QE, broader range of assets purchased under new QE, lower interest rates, negative interest rates, new accounting rules, new FDIC guarantees, They make it all seem normal so next time they lose control they can do it again and on a larger scale. Central Banks will continue to look for new assets to buy perhaps including infrastructure bonds, bad student loans, autoloans, corporate bonds, equities good assets, bad assets and derivatives on all of the above.
After each collapse, central banks step in with a quick fix.
What is the benefit of owning physical gold and silver?
The system favors and rewards paper/digital asset ownership. The more people on the grid, the less value off-grid assets like physical gold and silver have. Large profits have been made in paper assets. Physical gold and silver become more valuable in barter situation.
Central Banks put their digital mandated currency on the blockchain so they can tax, track and mandate all transactions. Then “bitcoin” is no longer a decentralized system – Central Bank Blockchain Currency IS centralized.
If you have enjoyed this report, please consider sharing it, buying your precious metals through the Smaulgld affiliates linked to on this site* and subscribing (for free) to Smaulgld.com.
Get Free Updates From Smaulgld.com
Subscribe to Smaulgld.comto receive free gold and silver updates, news and analysis.
Please visit the Smaulgld Store for a large selection of recommended Kindles, books, music, movies and other items.
You can support Smaulgld.com by making all your Amazon purchases through the search widget below and by ordering your gold and silver by clicking on the JM Bullion, BGASC, Bullion Vault, Gold Broker, Golden Eagle Coin, GoldMoney, SD Bullion, Perth and Royal Canadian Mint ads on the site.
DISCLOSURE: Smaulgld provides the content on this site free of charge. If you purchase items though the links on this site, Smaulgld LLC. will be paid a commission. The prices charged are the same as they would be if you were to visit the sites directly. Please do your own research regarding the suitability of making purchases from the merchants featured on this site.
Chart Disclaimer: Information presented here has been obtained from a third party and is presented for information purposes only. Smaulgld can not and does not guarantee the accuracy or timeliness of the data displayed on this site and therefor the data provided should not be used to make actual investment decisions. You should always consult a professional investment adviser before investing in precious metals or any type of investment. You acknowledge that Smaulgld assumes no responsibility for the integrity of data on this site.
The content provided here is for informational purposes only. Making investment decisions based on information published by Smaulgld (SG), or any Internet site, is not a good idea. Accordingly, users agree to hold SG, its owner and affiliates, harmless for all information presented on the site. SG presents no warranties. SG is not responsible for any loss of data, financial loss, interruption in services, claims of libel, damages or loss from the use or inability to access SG, any linked content, or the reliance on any information on the site.
The information contained herein does not constitute investment advice and may be subject to correction, completion and amendment without notice. SG assumes no duty to make any such corrections or updates. As with all investments, there are associated risks and you could lose money investing. Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment. SG disclaims any and all liability relating to any investor reliance on the accuracy of the information contained herein or relating to any omissions or errors and as such disclaims any and all losses that may result.