It seems people on the right, expecially in the USA, don't like central banks. I'm out of the loop so redpill me on central banks.
What are they for? What are they bad?
CENTRAL BANK
Jordan Rivera
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Lincoln Brown
Most political issues in the US swap in support base depending on which party is in power. NSA surveillance isn't a big issue to Trump voters anymore and Drone Strikes are now a big problem for lefties. People don't realize that validating unconstitutional behaviors means you'll have to deal with it from the next guy that you appointed.
William Edwards
>(((central banks)))
That's is, literally, all you need to know.
Anthony Kelly
Central Banks give control of money to the government entirely. So with a central bank there is no competing money system and because of this they can do what they want such as printing obscene amounts of money causing inflation and eventually causing the currency too collapse
Brayden Campbell
Yes, I know. But say you genocide all of (((them))), would it still be bad?
Easton Sullivan
actually the federal reserve is a separate entity and the government pays them to print money
Hunter Perry
Blake Perez
RARE
A
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Carter Moore
Why is your flag a bed?
Logan Davis
State owned central banks are not a bad idea. Something like the Federal reserve is shit since it's a private entity and isn't completely under government control
Mason Russell
Qatar
A place where Mudslime overlords cruelly opressed their indian slaves
Asher Brown
A central bank controls inflation so a candy bar doesn't end up costing $100 dollars.
Matthew Parker
Reading comprehension.
Brayden Russell
Like 90% of 'discussion' around central banks revolves around the discussers not understanding how central banks work.
Elijah Robinson
So it's good?
Yeah, that's why I ask. Blease Halb :DDD
Christian Smith
en.wikipedia.org
It's a Jewish scheme intended to make banks richer and people poorer. Central banks don't just print money, they loan it to private banks with (((interest)))
Xavier Murphy
If you want a tl;dr, central banks have potential to be bad, and I have absolutely no idea how it functions in Italy, but the US central bank is an overall good entity. The people on the right in the US who don't like the central bank are a small vocal minority.
Lucas Reyes
>What are they for?
Central Banks are so Jews can completely control Goy.
Why are they bad?
See answer to number 1
Adam Hill
Oy vey Shlomo! Who good be behind this post?
Jace Garcia
A German/Irish Roman Catholic united states university student dual majoring in math and economics.
Jaxon Cruz
...
Austin Young
>Something has the power to be bad, we must annihilate it.
Jayden Richardson
Read: I'm asking about the proper intended role of central banks.
Forget about EU countries for now. What would happen without one in the US? Best/worst case scenario?
Brandon Allen
Nice try, Avi. Central banks remove the power of the government of printing it's own money. It entirely let's a private jewish collective charge the American people interest on every dollar these jews print out of thin air. It also gives them the power to crash the economy if anyone wants to remove them of power. you have a lot to read if you aren't trolling
Michael Reyes
John Hughes
Anthony Edwards
Best/worst case scenarios are not going to be a good indicator of anything. Both scenarios will be fringe events. The largest benefit of a (credible) central bank is stability.
Henry Scott
Makes sense. So what would make a central bank credible?
Cooper Martinez
>Cocks won prick
Though I do agree that guy was being a fag by just going "they're good, goy! They dindu nuffin!" Instead of actually even trying to explain how they work and what their intended purpose is at all after whining about how people don't know and being asked.
David Richardson
youtube.com
Cash, fiat currency and fractional reserves explained for entry level economists
Brayden Morris
To elaborate, direct from the US fed website
"The Congress established the statutory objectives for monetary policy--maximum employment, stable prices, and moderate long-term interest rates--in the Federal Reserve Act"
The reason for a target inflation being consistent is because economic decisions for the future are planned in advance, and expectation is king. If the bank is credible in its targets and makes them known, people can base their decisions accurately. Without being able to control this, there can be (and more than not is) volatility which leads to a plethora of messy shit.
The obvious question is then, why do we want a central bank to have a target inflation above 0. For one, wanting maximum employment is related to the "Phillips Curve" which theoretically states that higher employment necessarily leads to inflation, a tradeoff (of course, times such as 'stagflation' in the US go against this). There is empirical evidence both suggesting for and against this relationship. From the FED's website,
"Over time, a higher inflation rate would reduce the public's ability to make accurate longer-term economic and financial decisions. On the other hand, a lower inflation rate would be associated with an elevated probability of falling into deflation, which means prices and perhaps wages, on average, are falling--a phenomenon associated with very weak economic conditions. Having at least a small level of inflation makes it less likely that the economy will experience harmful deflation if economic conditions weaken. The FOMC implements monetary policy to help maintain an inflation rate of 2 percent over the medium term. "
Robert Cox
In simplest terms, exactly what you think would make something credible. It says something, and it comes to fruition. Here's a section (picture) from the conclusion of a paper which surveyed central bankers on the issue, found here
Liam Nguyen
Well my friend, before central banking there were no central banks. No shit. So it was called free banking.
So when you have free banking what tends to happen is you have gold as your currency, and when you have gold in your bank account then the bank will give you a paper note which is like a receipt for your gold.
So then you can go and use that paper note like it's really gold, because other banks will accept it. What they do is they go to the issuing bank and withdraw the gold and put it in their vaults.
So this is fine. But it fucked up. It fucked up because governments needed to borrow shitloads of money so they could fight wars. So the banks ended up issuing more money (ie more receipts) than they had gold. So they were practicing fractional reserve lending. They might have 100 tonnes of gold in their vaults but they had issued receipts for 1000 tonnes. Shit like that.
Ok, so this would go on, money would flow into the economy and everyone thought they were getting rich, but it was just the banks issuing more receipts than they had gold, ie they were printing money.
Sooner or later people realise that bank X has practically no gold left and they are going to go bust any day. Their loans went bad. Whatever happened, they are broke. So there is a bank run as everyone tries to withdraw their gold from what little is left. They withdraw from bank X then they deposit into bank Y. This exacerbates the problem for bank X and they inevitably folds.
But, this is actually a good thing. Because it means that banks that perform fractional reserve lending inevitably fold. Which is the market forces regulating against continual expansion of the money supply.
But, things didn't stay that way because the solution to all these private banks going bust is to have.... a central bank. The central bank can issue money to the private banks, so the private really can't go bust from a bank run because the central bank is backing the whole system.
Ethan Cox
So central banking is something that allows fractional reserve lending to continue unabated.
But then you still get problems with central banking, because, you have to realise, fractional reserve lending alone mathematically cannot continue forever, so then you had Quantitative Easing, you have ZERP (zero interest rate policy) and so on.
All this just doubles down and continues the expansion of the money supply.
Just like banks issuing 10x more receipts than they have in reserve, 100x... it just needs to keep growing all the time otherwise the bubble of monetary expansion, the bubble of credit growth, will collapse.
That's why we have this economic slumps like America has been in for a while.
The real economy is trying to fight the manipulation, but the financial system, driven by the central bank, is fighting the real economy.
By creating all the new money it means that investment horizons become very short term. It means that bad businesses which create little value can be perpetuated. And it means that asset prices are massively propped up.
If you want to know why houses are so expensive, take a look at central banking.
Bank with free banking, you could have fractional reserve lending for a while, and this could lead to a short term boom as extra money entered the system, but eventually the bank would fail, the damage would be relatively small and contained, and people would go on with their lives. Now the bubble is enormous and the only plan it to keep inflating it so that the pop doesn't come. But it will come and the bigger it gets the bigger the fall is going to be.
Josiah Wilson
And if you want to know how china could have trade surplus with the USA for so many years and become rich because of it? It's because the US financial system was creating money with fractional reserve lending during all that time. And this is why jobs transferred between countries. Labor force displacement.
If you have sound money then you cannot have a trade deficit for an extended period of time without exhausting your capital reserves.
Joseph Howard
What power would they have without the federal government?
Gabriel Johnson
yes and that is also why they push mass immigration because their fractional banking is an ever growing pyramid scheme that requires more people taking more loans every year so that the loans created can repay the interest rate. at the moment the interest rate is actually negative because they are in such dire need of more loan takers.