Godfrey Bloom, a former Member of the European Parliament and current Honorary President of the Ludwig von Mises Centre, has stated that all banks are broke.
The somewhat controversial former UKIP Party Whip who spent much of his life working as a financial economist further accused central banks of engaging in counterfeiting by printing money out of nothing.
His somewhat short speech at the European Parliament is quoted in full:
“All the banks are broke. Bank Santander, Deutsche Bank, Royal Bank of Scotland… they’re all broke. And why are they broke? It isn’t an act of god. It isn’t some sort of tsunami. They’re broke because we have a system called fractional reserve banking. Which means banks can lend money that they don’t actually have. It’s a criminal scandal and its been going on for too long.
To add to that problem, you have moral hazard, a very significant moral hazard, from the political sphere. Most of the problems start in politics and central banks, which are part of the same political system.
We have counterfeiting, sometimes called “quantitative easing,” but counterfeiting by any other name. The artificial printing of money which if any ordinary person did they’d go to prison for a very long time. And yet governments and central banks do it all the time.
Central banks repress interest rates so we don’t have the real cost of money. And yet we blame the retail banks for manipulating Libor. The sheer effrontery of this is quite astonishing. It’s central banks, it’s central banks that manipulate interest rates, Commissioner.
And plus underneath all this, we talk loosely in a rather cavalier fashion, do we not? About deposit guarantees. So when banks go broke through their own incompetence and chicanery, the taxpayer picks up the tab. It’s theft from the taxpayer!
And until we start sending bankers, and I include central bankers, and politicians to prison for this outrage, it will continue.”
The fiery speech was delivered back in 2013 at a discussion of the European Parliament regarding potential further integration of EU’s banking system. But it remains relevant as it addresses some fundamental aspects of the monetary system.
Bitcoin tries to address some of those aspects, not by sending anyone to prison, but by giving all the choice of using a more object financial system where money is not created from thin air, but by the rules of code and mining hardware, giving issuance a real cost.
Combined with a fixed monetary limit which can’t just be increased, or counterfeited, or manipulated through interest rates, and so on.