Do Central Banks Really Know What They Are Doing?

Technology is changing the world yet many do not seem to grasp that. At the top of the list is financial people, politicians and ideologues.

Iran, a country that is under the thumb of the United States via sanctions, announced it is dumping the USD and switching to the Yuan. This is a move that comes as no surprise yet is a kick in the you know what to the imperial USG that feels it is still able to force countries to do exactly as it says.

While it does still maintain a great deal of control, that is diminishing with each passing year. The problem for tyranny, no matter where it comes from, is that when there are options, that power is diminished. This is exactly what is starting to take place.


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For decades the central banks of the world has utilized the same playbook. They are facing a multi-decade long deflationary supercycle yet they still believe that Keynesian economics can save them. They print money in hopes (prayer at this point) that inflation will show up. All the while, the velocity of money slows to a crawl and interest rates keep dropping.

The big news for the cryptocurrency world is the idea of digital fiat currencies. These central banks, witnessing the success of cryptocurrencies, are now trying to get into the game themselves. Their belief is that if they offer a digital Yen, USD, or EURO, they will gain even more control. The reality is that the central bank has not been in control, or able to manage anything, for decades.

A central bank cannot stimulate demand. This is something that is lost on those economists who keep espousing stuff from the 1940s. Absent market demand is absent market demand; it cannot be substituted by deficit spending no matter how much they try.

Now, by buying into the idea that digital currencies issued by central banks are the answer, these individuals further push themselves into the land of delusion. The academics at the most prestigious institutions simply cannot wrap their heads around why things are not working as their models show.

The reason why cryptocurrency was successful is that it is not controlled by centralized entities. It offers people an alternative to the native currency they are stuck using based upon geography. Just like Iran basically told the US to f*ck off, individuals are able to do the same with their central banksters. We don't want your currency no more!!!

It is this option that drives a stake into their power. As separatist movements are taking place around the world, governments could be faced with rebellion from different areas. Alberta is already one area where a referendum is being put together to secede. This will create another layer of headaches for those in power.

With so much uncertainty, cryptocurrency can take on an even bigger role. This means that we can see a lot of people turning to the likes of Bitcoin for stability. Now isn't that a kick in the pants: Bitcoin looked upon as stable. That is what will take place if civil unrest starts to take on secession proportions in different parts of the world.


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The U.S. Federal Reserve showed how clueless they really are when they altered their model for interest rates based upon inflation. They went from the 2% to essentially a moving average, pushing it up to possibly 2.5%. When I read this, I laughed out loud. This is akin to a saleperson who never hits bonus finding the level was raised another $10,000 a month. If one is not hitting it, who cares? It could go up another million, it makes no difference. Hence, the Fed might as well said 8% since that is about as likely as a sustained 2.5% is.

For a little over a week now, I asked a simple question: what is the economic impact of technology on monetary policy?

The reason I did this is because I know those clowns at the Fed, and the economists with their advanced degrees have no idea. It is wonderful to be a well paid, ivory tower academic. The problem is real world knowledge tends to be lacking. Hence, we have a bunch of policy makers listening to nothing more than theorists.

In the end, we are seeing the same mistakes made that major corporations did a couple decades back. The newspapers and record companies did not take the threat that was at their doorstep seriously. They could see no way their multi-billion dollar industries were going to be disrupted. Yet that was exactly what happened.

Each day the world of cryptocurrency expands a bit further. As this happens, the options people have expands. It could be ironic that central banks issuing their own digital currency could be exactly what kills what little power they have. As people get use to the technical aspects of things, they will be more open to other options. Suddenly, billions of people could be forced into the digital asset world, something that those involved in crypto were hoping for.

In the end, it could be governments and central banks that end up as the biggest allies for crypto.

When it comes to macro issues, the law of unintended consequences is always in play.


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Yes.. enriching the already rich and taking fat bonuses while doing it.

Yes they know.

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Bang, I did it again... I just rehived your post!
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They print money in hopes (prayer at this point) that inflation will show up.

My feeling is that inflation, per se, is not the main goal of the Fed and their maga wealthy cronies at this point; although thier insane rate of minting is estimated to have real inflation around 20% at the moment. Nor is it my contention that their actions are coming from a place of misunderstanding. It is obvious that the end game was on all the power brokers' radar since Bush Jr.'s attempt to physically hold the oil reserves of the middle east to salvage the Petro Dollar. Unfortunately for them, Syria seems to have become The Empire's Stalingrad.

If they wanted quick inflation the QEs would have been pumped into the hands of the average consumer like the $1200 covid cheque was done. The steps seem to have been to mint like a banshee, while minimalizing inflation, while amassing assets.

Instead of rushing to inflation they have bailed out the likes of Warren Buffet from their exposure in industries like aviation and given them the monopoly money to turn their wealth into assets which will be there no matter the new economic paradigm.

Their digital minting is not much of a leap from your average ATM card without decentralization. It will be a means to give misguided assurance to the average citizen that they have not missed the boat that thier crypto neighbours travel in and that their taxes can still get tabulated in the new decentralized world so that their central authority benifactor can still build the roads (although at this point just fixing them would do 😎).

Just keeping in mind that the elite are doing everything for their own intended benefit, and not from stupidity or being out of touch, tends to give their actions more meaning to me.

Do you think Bezos cares if it is communist state run capitalism or global city state crypro economics that emerge from this century? Not sure if it is still possible since the 2017 BTC network log jam, but you used to be able to buy amazon gift cards with crypto years ago.

The elite may be self centered in their actions to the point of appearing evil to some; yet considering them stupid is a dangerous assessment to make in my opinion.

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The technical aspect is something people needs to get used to because it's even imperative for the adoption of crypto. The central banks themselves are adopting and in the long run we will see how it goes

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I love the title of this post.
I am also not sure if they are in control of things or are just acting af they are in control.

When they talk about cryptocurrency they definitely don't understand that crypto was invented because we don't want them controlling things anymore.

Cheers!

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You are complete wrong!

:-p

But of course, you are talking apples, and i will be talking oranges.

So, imagine that you are an evil oligarch. You are a psychopath, a narcissist.
What do you want most of all? Control. What 2nd? Pain and suffering on all those who are not in your control.

So, apply this to a central bank.
You make sure that no one can compete with you by buying up any competitors, and if they won't sell, destroy them.

You make the country's laws so that none can compete with you.

And then you play boom-bust destroying all the little ants.
You play inflationary games destroying those little ant's wealth.


As you can see, central banks are getting exactly what they want.
So, do they know what they are doing? I would say yes.

I would say lock them all up, blow up those buildings, and salt the ground.

But that doesn't do anything.

If The US dollar was stable, and paper was still accepted everywhere, very few people would want to switch to something different.

However, the central banks want their digital controlled currencies... and thus they must make people feel enough pain to change/to move.

This gives us a chance to get out. To switch to digital non-controlled currencies.
And thus destroy their control.

I hope that many more people start seeing central banks as the evil they are.

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I’m not sure they know what they’re doing, because they're history, the more I am interested is about the last two Nobel laureates in economics who won a prize for stock market theory based on game theory, which is used in one way in all the crypto consensus algorithms ...

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I think that centrals banks still hold enormous funds which can be uses either to slow brake the decentralized finance or to influence that for their own winnings. In the global scheme of all the banks are like the whales on Hive and they can brake a system if they want to. Still hopefully the decentralization will spread and they won't be able to take a big piece of the pie in order to hold over 51% from the required supply or consensus to control things.

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Central banks are the problem, not a solution, yet since the beginning of our country here in the U.S., we allow them to dictate our lives. Anytime they don't get their way, they create artificial panic resulting in lives ruined and even death in some cases. The decentralization of digital currency is their biggest threat, so you can bet they will oppose it at every turn.

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