Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
If You Don’t Understand Bonds, You Don’t Understand Investing - 25th Aug 19
Gold's Next Move - 25th Aug 19
Fresh Water Crisis Unfolding - 25th Aug 19
Newbie Guide to Currency Pairs in Forex Trading – Review - 25th Aug 19
When A 16-Year-Old Earns $3 Million, You Know It's Not A 'Silly Fad' - 24th Aug 19
The Central Bank Time Machine - 23rd Aug 19
Stock Market August Breakdown Prediction and Analysis - 23rd Aug 19
U.S. To “Drown The World” In Oil - 23rd Aug 19
Modern Monetary Theory Could Destroy America - 23rd Aug 19
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Central Banks' in Tatters- Facts are Stubborn Things Part II

Interest-Rates / Credit Crisis 2008 Apr 14, 2008 - 09:13 AM GMT

By: Joseph_Russo

Interest-Rates Best Financial Markets Analysis ArticleThe ALADDIN'S lamp of Central Banking coming FULL Circle - If one is inclined toward general agreement with the notion that the pinnacle of power in the world is the power to create money, - then one must hastily conclude that; the government-aligned private organizations of central banking cartels, whom fund all of the worlds imperial centers of power, – must then be held as the absolute mightiest of powers, whom preside at the highest seat of omnipotent influence over a vast array of interconnected relationships across the entire global landscape.


If one further accepts the premise that all power tends to corrupt, and that absolute power tends to corrupt with far greater certainty – one is then compelled to make the natural assumption that central banking cartels would inherently possess an inordinately high level of probability in harboring substantial tendency toward hatching steady streams of pervasive intrigue and corruption throughout their tenures.

Harmfully adding to their mystique, central banks often maintain a level of autonomy from the governments to which they contract or have been granted charter in the delivery of their product and service.

The most obvious product and service central banks peddle - are their exclusive charter agreements with select governments in securing that government's official authorization to lend it money, and for acquisition of absolute monopoly franchise in the manufacture and management of the associated country's legal tender system.

Astonishingly, in addition to the grant of such omnipotent monopoly franchise, governments have somehow been compelled to grant central banks broader powers to regularly meddle and tinker with the supplies of money they create, the amount of credit they make available to various entities, the freedom to adjust various terms and rates of interest, and the liberty to directly intervene in their financial markets at will, or upon any perceived necessity to do so.

To briefly digress with regard to the United States, it is somewhat bewildering when one pauses to consider why congress, whom by the legal authority of its constitution possesses the power to coin its own money and regulate its value , would find it compelling instead, to borrow money on the credit of its Nation, under willful contract with a separate entity, to which it is then obligated to pay back with interest.

Clearly, it is necessary for governments to establish a uniform medium of exchange for its citizenry, and also for the purpose of fairly and effectively trading their surpluses with other agreeable nations. Should for whatever reasons beyond our comprehension, governments find it necessary to borrow money at interest from a central bank vs. creating their own - free of usury, so be it. We entrust that such reasons may be of practical necessity, though we are not certain what those reasons might be.

However, it is inarguably NOT a necessity for governments to then grant central banks a much broader set of unchecked elaborate authorities, which embody the express supreme power to impose critical influence on either sovereign or global economic endeavors, or the express authority to execute direct covert interventions amid a sovereign nation's supposedly free financial market.

In light of the culminating malaise in the credit, currency, and financial markets, we thought it may be illuminating to view the collective product of central banks through the prism of their respective fiat currencies in relation to the price of gold.

Adopting a National Currency and Banking System

The ways and means by which various governments do so – is quite illuminating as to the equitable and fiscally prudent manner in which various nations embark upon dealings with neighboring countries, and the manner in which such nations responsibly steward fiduciary prudence over the interests and future destinies of their respective populations.

One would naturally assume, that in order to engender full faith in any given government and the credit worthiness of its treasure, that the medium of exchange, or legal tender such governments elect to adopt, would be comprised of a currency medium that is stable in its value, and possesses a durable, reliable, and sustainable metric of equal weight and measure.

Shockingly, ALL modern-day legal tender manufactured by central banks around the world, have no such stability or metric beyond the decree to which those governments whom endorse its issuance approve, and upon the day-to-day faith and confidence that such currencies will be accepted as legal tender in exchange for goods and services whom its citizenry relies upon for planning their futures, and in providing for the sustenance of their day-to-day survival.

Who's the Boss

Central banks have been carefully positioned to exist as private legal entities, somewhat separate and independent from the governments they serve, and sometimes defined as quasi-government entities so as to in part, avoid plausibility of any partiality relative to specific political influence in setting their autonomous monetary policies.

If one is to rationally assume, that Governments, under which such central banks have been contracted to serve, assuredly have formidable, if not a complete and vigorous oversight control over the central banking entity to which it has awarded such momentous monopoly franchise, - one must inarguably conclude that the private, quasi-governmental separation status of political impartiality, is likely to be revealed a complete farce.

If in truth however, governments do NOT possess any meaningful power and oversight over their respective central banking entities; one must then be compelled to conclude that the central banks themselves, that have the upper hand in command and control of the governments who are deeply indebted, and wholly dependent upon them for survival.

In this frightening scenario, desperate governments who are in perpetual dire need of money and credit to finance their operations, and to provide reasonable opportunities for their citizenry - must naturally bow in total subordination to the central banks will at every measure and turn of events.

We suspect it is in part, for this very reason of extreme and dangerous vulnerability, that that the framers of the American Constitution issued congress the power to coin money - regulate its value, and to fix its standard weights and measures.

The Founders Original Intent

For all of the fair and noble wisdom to which the framers' valiantly labored in providing constitutional safeguards and provision to protect against such dangers, at this present moment in time, one has no other choice but to rationally conclude, that since Hamilton succeeded in defeating Jefferson and Madison in passing a string of policies associated with his rather ambitious and intriguing assumption act , which set the stage for the first central bank of America; This particularly regrettable brand of evil has prevailed against the greater good, inherent in the founders' original wisdom.

In the years following Hamilton's economic architecture of intrigue, there were numerous episodes of strident dissent, which led to banking wars, upheavals in trade and commerce, the legal tender act of 1862, and ultimately, to a series of constitutional legal tender cases heard by the Supreme Court.

In the first of such cases in 1870, the Supreme Court held that paper-money violated the United States Constitution. Two subsequent cases were heard in 1871 and 1874, which regrettably reversed Hepburn v. Griswold in 1870.

In 1886, George Bancroft , an eminent philosophical historian of the ages, prepared a brilliant 40-page essay on Judicial Power and Unconstitutional Legislation in response to the legal tender cases reversing the Supreme Courts original findings.

Introduction

Good money must have an intrinsic value. The United States of America cannot make its shadow legal tender for debts payable in money without ultimately bringing upon their foreign commerce and their home industry a catastrophe, which will be the more overwhelming the longer the day of wrath puts off its coming. Our federal constitution was designed to end forever the emission of bills of credit as legal tender in payment of debts, alike by the individual states and the United States ; and it will have that effect, if it is rightly interpreted and firmly enforced.

Bancroft's Complete 40-page Essay AN ABSOLUTE MUST-READ CROWN OF GENIUS

To set the subject in the clearest light, it will be proper to trace the history of American bills of credit until they were abolished by Massachusetts and Connecticut; to revive the memory of the great struggle for their suppression by the separate colonies or states to the end of 1786; and to ascertain what decision on paper money was made by the constitutional convention, and accepted, one by one, by every state. It will then be the time to examine the new interpretation of the constitution by the present court; and ask after the defenses of the people against the revolution with which they are threatened.

Fractious tidbits OLD and NEW:

RECENT HEADLINE

Fed Weighs Its Options in Easing Crunch

“The internal discussions are part of a continuing effort at the Fed, similar to what is under way at foreign central banks, to determine its options if the credit crunch becomes even more severe. Fed officials believe the availability of such options largely eliminates the risk of exhausting its stockpile of Treasury bonds and thus losing its ability to backstop the financial system, as some on Wall Street fear.”

   
   

RECENT HEADLINE

Chavez Muses About Buying IMF Gold

"Look at how the U.S. Empire must be in unimpeded decline, that the International Monetary Fund ... is selling its crown jewels," Chavez said during a speech at a military parade. "The International Monetary Fund is selling what gold it has left to be able to pay salaries," Chavez said. "We could give a loan to the Monetary Fund. ... We could buy some gold bars. ... I think they're selling gold cheap." Chavez spoke as the IMF and World Bank were holding weekend discussions in Washington . One proposal on the agenda would trim 15 percent of the IMF's staff and sell about US$11 billion (euro7 billion) in the institutions' vast gold reserves. A vociferous critic of the U.S. government, Chavez also has long opposed the policies of the IMF and the World Bank. He called the IMF "the financial arm of the empire."

Conclusion

No doubt this too, is indeed a most interesting time in which we live. We are by no means suitably equipped to offer any speculation of merit, as to how such a vexing set of entanglements may begin to equitably become unraveled amid the complex daisy chain to which they so fragilely cling.

Perhaps at some future flashpoint of enlightenment, our species will be collectively compelled to appoint such endeavor, to a council of universally embraced and globally renowned scholars of varied notable disciplines. Their universal mandate may perhaps consist of extracting, and equitably interpreting from the archives of world history, all of the learned wisdom of ages.

ith equitable dissemination of such knowledge, their task would be to transcend all partialities, and apply such wisdom with an astute, incorruptible collaboration, to form a universally equitable framework of resolutions, designed to bring an end, once and for all, to the centuries of world violence, envy, hatred, greed, and injustice, to which humankind ignorantly insists upon perpetuating from one generation to the next, since the time of antiquity.

Trade Better / Invest Smarter...

By Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology
Email Author

Copyright © 2008 Elliott Wave Technology. All Rights Reserved.
Joseph Russo, presently the Publisher and Chief Market analyst for Elliott Wave Technology, has been studying Elliott Wave Theory, and the Technical Analysis of Financial Markets since 1991 and currently maintains active member status in the "Market Technicians Association." Joe continues to expand his body of knowledge through the MTA's accredited CMT program.

Joseph Russo Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules