This video is a follow on to the other videos I’ve done on Inflation, but this time, I’m going to focus on the role of the Central Banks.
The FED, the Central Bank of the US, had said earlier in 2021 that inflation was “transitory”. More recently, they have disavowed this position. But, whatever they might say on the issue, they are not to be trusted. I can assure you, that they are not on working in the best interests of the people. They are not our allies. They are, in fact, our enemies. They are simply engaged in “perception management” and more deception. You might want to look at the videos I’ve done on Central Banking to understand what I mean here.
Gregory Mannarino (Traders Choice) on YouTube often says that the FED is “an inflation creation machine”. And, I would have to agree with him.
Inflation is defined, in classical economics, as an increase in the money supply – to put this in everyday terms, it’s money printing.
Using this classical definition, the FED, along with the other major Central Banks of the world, such as, the Bank of England the (BoE), the European Central Bank (the ECB), the Bank of Japan and the Bank of China, and the rest … all are responsible for the inflation.
Why? Well, because the Central Banks are in charge of monetary policy. They control the money supply.
What about the Governments you might ask? Governments act as managers, setting budgets and spending money – that kind of thing. They approach the Central Banks to get money that they require. An easy way to think of the situation, is to imagine a traditional couple back in the 1950s. The Central Banks are the husbands. The Governments are the wives. The wives are in charge of the daily management of the household. The housewives look after the children, prepare meals, do the house-keeping and budgeting, go out and do the shopping, buy groceries etc. The husband is in charge of the money side of things. His role is to bring the money in.
The Central Banks and the Governments are then partners. They work in partnership with each other, acting in accord with the different roles that are assigned to them. The Governments then, are as responsible as the Central Banks in creating inflation.
The way money is actually created is not straightforward. In fact, it’s rather complicated, so I’m not going to explain it here … besides, Mike Maloney on YouTube does a very good job of showing this operation. I would highly recommend you watching his whole series “the Hidden Secrets of Money”.
Anyway, let’s return to the FED.
Ever since the Financial crisis of 2007 / 2008, the FED has been engaged in fiscal stimulus – an expansionist monetary policy called Quantative Easing (QE). It’s a large-scale asset purchasing programme. But basically, all you need to know is that it’s money printing. Since the onset of the Pandemic, money printing has increased still further. In 2020, the FED increased the money supply by 30%. This is truly incredible. Indeed, it beggars’ b
