As war was about to engulf the globe, 23 tons of gold held by the “secret bank that rules the world,” as a respected book calls it, were on the move during March 1938.
The Bank for International Settlement was transferring the gold that belonged to Czechoslovakia’s central bank, to the Nazis, according to a paper by Kubu, E. presented in 1998 at a London Conference on Nazi gold, with the paper titled: Czechoslovak gold reserves and their surrender to Nazi Germany.
That wasn’t the last time the bank that is outside any jurisdiction aided the nazis. London and Washington grew so suspicious of the bank, they moved to dissolve it and, despite protests by John Maynard Keynes, the bank was dissolved.
Shortly after, however, the democrats took power in America. One of the first acts of the then just elected president, Harry S. Truman, was to suspend dissolution, with the decision officially reversed in 1948.
Since then, governors of central banks from China to Russia, America and Britain, Germany and South Africa, effectively the entire world, meet in secret to decide some of the most important matters.
South Africa’s deputy governor of their Central Bank, for example, said in one of these meetings they were told not to refer to cryptocurrencies, but to call them crypto-assets.
Like a chorus they all did so, and that probably tells you all you need to know about this unaccountable and secretive institution where central bankers meet to coordinate global responses outside of the public and outside even of our own governments.
“Central banks are trusted, and that trust is something they have built up over decades and for which there is no substitute right now,” says Agustín Carstens, the current general manager of the Bank of International Settlements (BIS).
That of course ignores the complete lack of trust in the Chinese central bank for example which has devalued their currency by 10% just since April 2018. To say nothing of countries like Venezuela.
There is no substitute, he says, but that too ignores a $250 billion crypto market cap which is almost higher than all the known assets under BIS control. But perhaps “ignore” is too kind a word. Here is this man outright lying to the public. Carstens says:
“Trust is a valuable commodity. It is easily destroyed, but winning it takes time. Money has become established. Young people should use their many talents and skills for innovation, not reinventing money. It’s a fallacy to think money can be created from nothing.”
Carsten worked almost all his life at Mexico’s Central Bank pretty much straight out of university. He knows full well, as does the public because central bankers have now clarified, that fiat money is created out of nothing.
It is actually worse than that. The current system of money creation as explained by England’s Central Bank and that of Switzerland, creates money when one takes out a loan and then that loaned money is destroyed once the loan is paid back.
So far, it is a fairly reasonable system, but what role does a crucial element play: interest? Interest on a loan or mortgage can range from 2% to 30%. So if you take $10,000, and the interest is 30%, you’ll pay back $30,000 in this simplified and illustrative example.
Where does that $20,000 in interest come from? Obviously since virtually all money (90%) is created by commercial banks from nothing when they make loans, that $20,000 comes from nothing too, from other’s loans, but it is actually worse than nothing.
If it was fully nothing, the system would be fairly reasonable for money can respond to economic growth and so on. Yet the considerable interest one must pay on this newly created money means a significant wealth distribution from the many to the very few for no reason.
Even without interest there are policy considerations and there should be public oversight as well as accountability regarding to who banks lend and don’t lend. For say, if they loan $1 billion, they’ve instantly made someone very rich. On the other hand, if they don’t loan a mortgage, they’ve kept someone in rent poverty where money is constantly effectively thrown down the drain.
It is thus preposterous for this old banker to suggest money should not be open to innovation for he himself says: “Money is, so to speak, the oil that makes the machinery work.”
That oil hasn’t been working very well. Asset prices are in a bubble, for example, while wages have been stagnant since the 70s. To say nothing of the 2008 crash caused by money, specifically by bankers mismanaging it.
So thus, since this old man thinks it is worthy to give advice, we’ll leave it to Friedrich August Hayek to give him our advice. In The Denationalization of Money, the towering giant who spent his life studying money and won a Nobel prize for it, says:
“When one studies the history of money one cannot help wondering why people should have put up for so long with governments exercising an exclusive power over 2,000 years that was regularly used to exploit and defraud them.
This can be explained only by the myth (that the government prerogative was necessary) becoming so firmly established that it did not occur even to the professional students of these matters (for a long time including the present writer!) ever to question it. But once the validity of the established doctrine is doubted its foundation is rapidly seen to be fragile…
If we want free enterprise and a market economy to survive (as even the supporters of a so-called ‘mixed economy’ presumably also wish), we have no choice but to replace the governmental currency monopoly and national currency systems by free competition…
The past instability of the market economy is the consequence of the exclusion of the most important regulator of the market mechanism, money, from itself being regulated by the market process… only competition in a free market can take account of all the circumstances which ought to be taken account of…
Money is no exception to the rule that self-interest would be a better motive than benevolence in producing good results…
The older generation of bankers would probably be completely unable even to imagine how the new system would operate and therefore be practically unanimous in rejecting it. But this foreseeable opposition of the established practitioners ought not to deter us.
I am also convinced that if a new generation of young bankers were given the opportunity they would rapidly develop techniques to make the new forms of banking not only safe and profitable but also much more beneficial to the whole community than the existing one.”