He that would make his own liberty secure, must guard even his enemy; for if he violates this duty he establishes a precedent that will reach himself.
Central BankingThree Inconvenient QuestionsPosted by Chris Leithner on 2nd December 2010 4:59pmIn July, Irish banks – without exception – passed the “stress tests” imposed upon them by European governments and regulators. A mere four months later, these very same banks have brought the Irish Republic to its knees; and a report overnight from Reuters quotes the head of its central bank: “as far as [the Irish government] is concerned, they’re [all] up for sale.”
From 612 ABC Radio with Steve Austin:
Chris Leithner on 612 ABC Brisbane discussing in the first ten minutes: "Quantitative Easing" and what it means; Printing Money out of thin air; Failure of Keynesian Economics; Way to Prosperity: Through savings and production, not debt and consumption; Laws of Economics.
Commonwealth Bank of Australia Ltd (CBA) has announced a $5.66 billion annual profit for 09-10 and the usual suspects are demonising "free markets" and "capitalism" as the cause. The problem with this critique is that free markets don't exist in the banking system. The reason the Commonwealth Bank makes these massive profits is that government provides them with powers that they would not have in a free market. The first and most obvious is the access they have to the most horrific government agency of them all, the Reserve Bank of Australia. The Reserve Bank creates its own deposits out of thin air. It is able to do this because the government has allowed it to. It then lends out these deposits at an interest rate determined by a group of disturbingly secretive government bureaucrats. Then there is government-ordained fractional reserve banking, the government-ordained currency monopoly and more. The point is, don't be fooled by the zealots. Banks make their big profits because of government, not the market.
Let me present a syllogism. 1. Theft is immoral. 2. Inflation is theft. 3. Fractional reserve banking is inflationary. 4. Central banking is government-guaranteed fractional reserve banking. 5. Immorality leads to judgment. Therefore, we should expect. . . ? Economists, other than Murray Rothbard's disciples, never associate the concept of theft with monetary inflation. They speak of theft in terms of reduced efficiency and increased transactions costs, not morality. When it comes to avoiding morality, they are worse than lawyers. A lawyer might appeal to morality if he had a really weak case. This appeal might persuade a jury. An economist would rather lose the argument than appeal to morality. He regards the shame of invoking morality as personally more inefficient than winning the argument by an appeal to morality. Once you appeal to morality, academic economic theory collapses. Economics was the first science to be self-consciously designed to avoid moral questions. |
Search |
||||||||||||||||||||||||||||
