Central Banks Enrich a Select Few

The message unanimously churned out by politicians, central bankers, and ‘mainstream’ economists is that central banks are there for the ‘greater good’. They provide the economy with sufficient money and credit, and they fight inflation, thereby supporting output and employment growth. What is more, central banks, are supposedly in a position to effectively fend off or at least mitigate financial and economic crises. However, unfortunately, nothing could be further from the truth.

Throughout history, central banks have been created, first and foremost, to fill governments’ coffers. To increase the king’s or elected government’s financial means through an inflationary scheme – usually too elaborate and too treacherous for most people to see through. Central banks are instrumental for putting the ruler — or the ruling class — into a position where they can plunder the people on a grand scale and, by way of redistributing the loot, making a growing number of people financially and socially dependent on it.

To that end, central banks have been assigned the monopoly of money production. This has made it possible to replace commodities, or “natural money” with unbacked paper or fiat money. Central banks provide commercial banks with fiat central bank money, and commercial banks are free to pyramid a multiple of fiat commercial bank money on top of it. This is what monetary experts typically call a “fractional reserve banking system,” which is a genuinely inflationary scheme.

Murray N. Rothbard even speaks of a cartel between the central bank and commercial banks. In practice, the central bank acts as a cartelizing agent: “to cartelize the private commercial banks, and to help them inflate money…

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