The big bang of the ECB’s decision to flood the money markets with more than 1 trillion euros in order “to prevent deflation and revive the euro economy”, shows a profound change in the distribution of economic tasks between governments and central banks.
According to the German “Bundesbank” Act, the Central Bank is indeed called upon “to support the Government in economic policy”, but the bank is theoretically completely independent. It is only committed to monetary stability and could therefore also take measures that are not in line with or even contrary to the policy of the ruling Government. The independence of monetary sovereignty was seen as a key concern when the “Bundesbank” was established – just as if it were a fourth neutral power in the state. Thus, it should be prevented that – a s was the case during Hjalmar Schacht’s time – the Central Bank could be misused as a subsidiary organ of the Government. It should merely ensure, by guaranteeing monetary stability, the citizens’ confidence in their currency, in their savings and their pensions.
This focus on ensuring the monetary value and an independent “Bundesbank” at the same time was unique compared to all other central banks – borne out of the German past bad experience.
This was different with the Fed (Federal Reserve Bank). It is independent of the government insofar as it is owned by private banks, which also propose the Central Bank Chief, who must then be appointed by the US president. The particular interest of the Fed is therefore not monetary stability in general, but follows the interests of its owners. This became obvious e.g. in 2008, when the Fed had to save many banks and insurance companies in the United States which had ruined themselves by gambling, by starting the money-press to neutralize the banks’ debts.
At the same time, the Fed is also regarded at the spearhead of US monetary policy, which is directed by the financial industry. Since the dollar has become the world’s reserve currency at more than 70% and since Nixon had repealed the convertibility of the dollar into gold as well as the state’s liability for the currency in 1971, dollars were augmented without any inhibition to gain, thus debt domination was achieved over 200 countries in the world – this way creating the dollar empire, which also controls most satellites currencies, among them the Euro.
The “Bundesbank”, however, because of its focus on monetary stability, did not fit into this system and was a nuisance mainly in Europe, because the other euro-countries were not tied to the leach of currency stability of their central banks. Conversely, they were able to impose their debts wishes on their central banks. Thus, the German Mark was an anchor of stability for Europe, whereas the devaluation of the other national currencies even more devalued by debt, such as the Italian Lira, French Francs or Spanish Peseta, became visible in relation to the D-Mark. In other words, the other European currencies were depreciated against the D-Mark, a situation which drove the international capital out of the soft currencies into the strong D-Mark. This made the D-Mark become a stronger world reserve currency at the expense of the dollar and revealed the other European currencies as secondary soft currencies.
No wonder that not only the United States but also all European countries wanted to break the dominance of the “Bundesbank”. The Euro project, with the ECB in particular, was meant to neutralize the “Bundesbank”.
Theoretically, the ECB must also serve monetary stability, but in practice it has been increasingly reversed the polarity towards the political wishes of the Euro-member majority. Increasingly it was also subjected to the wishes of the US high finance and the Fed, particularly since the former Goldman Sachs employee Draghi took command. This was evident in 2008, when the ECB as well as the Fed, had to finance bailouts for European banks that had ruined themselves by gambling. As the German representative in the Governing Council with only one of 27 votes had not more weight than Malta, thus he could not stop the desire for debt relief by the debt-ridden banks and South European countries. Therefore, unfortunately with the consent of Germany, the unrecoverable debts of the ruined banks and Southerners were transferred into the bailout Rescue packages – practically speaking on the European taxpayers backs – and at the same time enabled the over-indebted banks and countries to further credit taking out of the bailout packages and the target lending.
In the first crisis Greece’s debt amounted to 180 billion, of which 100 billion were waived. In the bailout Greece received additional loans of 240 billion euros only after promising to carry out certain reforms without corresponding benefits, so that the debts are now up to 320 billion. Greece will never be able to repay these debts and is even incapable of paying the normal interests.
Although actually under ECB statutes public financing is excluded and also a further liability for the debt-ridden euro-countries by the healthy countries was excluded by the Lisbon Treaty, the ECB has broken both barriers with the consent of all euro-governments. Because most euro countries cannot or do not want to take austerity measures for political reasons, the ECB went on to open public financement by flooding the financial markets as announced in January 2015. It buys junk securities or bonds of severly indebted countries from the banks, for which no one will give credit any longer. Especially for over-indebted countries the increasing debts are still financed this way.
The argument of the ECB, one must prevent deflation, is just a pretext and theoretically incorrect:
Analogous to the private sector, the problem with low debt is with the debtor, but in case of over-indebtedness, it becomes a problem of the creditor and the debtor can then blackmail its creditors with the threat of insolvency. That’s how Greece is acting just now:
Now the question is just how long the ECB still can postpone the rehabilitation corrections of over-indebted countries, which have been made necessary by the money flooding:
The money flooding of the ECB is therefore
A drug addict must perish and will not be cured if the withdrawal of the drug is not demanded. Likewise, a sound currency, a healthy financial system, a competitive economy and a solid economic growth are only possible if the money flooding, zero interest and acceptance of liability for the unsound countries by the solid countries are stopped.
The ECB under political pressure has decided to give up the stability of the Euro in favour of an unproven economic stimulus. Because the debt maker states have the majority on the ECB Executive Board, the market forces (for example interest rate increase, bubble explosion or other) must finally end the flood of money and force a currency reform.
This is exactly what has been announced by the former Fed Chairman Alan Greenspan, that from the collapse of the dollar and Euro will arise the new world currency unit “Euro-dollar” with the new financial centre BIS (Bank for International Settlements, Geneva). To this end, the US high finance acquired the shares of the BIS in time in order to be capable of privately governing the next world monetary system – as it did our old one – and of abusing it to enrich themselves again.1
How can we protect ourselves privately against this development?
1 see more detailed: Hamer, E.: “Der Weltgeld-Betrug”, 4th edition 2012 and id., “Was tun, wenn der Crash kommt?”, 1st edition 2001, 10th edition 2008
(Translation Current Concerns)
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