Investors Beware of Central Banks Bearing Austerity

thedailybell.com / By Staff Report / February  6, 2013

IMF: Central banks must be responsible for financial stability … Financial stability should become a core central banking objective alongside monetary policy, although potential conflicts between the two functions might require some institutional redesign, the International Monetary Fund (IMF) said. The IMF noted in a study that although central banks had delivered low inflation, they had failed to prevent the devastating global financial crisis of 2008–2009. As a result, the IMF said new tools were needed to prevent excessive risk-taking, and that central banks may be best-placed to take on these tasks, although monetary policy should stay primarily focused on price and output stability. – Star Online

Dominant Social Theme: Central banks need to reduce the supply of money.

Free-Market Analysis: We were struck by a modest report (excerpt above) in the Star Online because it shows us once more that when it comes to monetary control, the International Monetary Fund is a big booster of central banking.

The IMF and the world’s current monopoly-model central banks work hand-in-glove; this is simply an unfortunate fact.

The powers-that-be set up a financial and economic system after World War II to keep the rest of the world, especially the developing world, in a kind of penury. The poverty is to be lifted only as the IMF and Bank for International Settlements (BIS) decide to do so.

Japan was flooded with cheap money in the 1980s and the Japanese exported and purchased US Treasury bonds – further funding the US deficit. China was flooded with cheap money and purchased US Treasury bonds, funding the US deficit. And like Japan, China benefited from torrents of currency, which enriched not just state coffers but also the pockets of the people.

The next target, as best we can figure, is Africa. Africa is to be consolidated and turned into a neo-Chinese/Japanese play. Africans will be exposed to cheap money and its benefits. The world will learn once more that central bankers are a kind and generous professional group – dedicated to alleviating poverty in the world’s most difficult regions.

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