Central Banks Can Never Improve on the Market: You Must Protect Yourself
By Daily Bell Staff - February 12, 2016

Mission incomplete: Rajan's overhaul of RBI … In a video conference in mid-2014, Reserve Bank of India (RBI) governor Raghuram Rajan told employees that he wanted to hire talented external candidates and improve the quality of research at the 81-year-old central bank. The proposals, described to Reuters by three officials who heard Rajan speak, would hardly seem out of place in any major institution on the planet. But in the storied halls of the RBI, where staff have to pass comprehensive examinations to join public service and spend decades slowly moving through its ranks, Rajan's ideas were seen by some staff as controversial. – Reuters

If you ever needed an explanation for central bank incompetence, here you have it.

With the monetary systems of entire countries in the hands of a group of unelected bureaucrats, it's clear that this was a doomed experiment from the start.

These are human academics, not gods that hold complete power over our financial futures. They are neither omniscient nor omnipresent, yet they believe that they know exactly what the economy needs.

Every decision made by this institution to fix prices, ratchet down interest rates, or inflate the currency causes chaos in the economy.

The result is tremendous booms and disastrous busts. The most severe ones paralyze economies that only a few days or weeks before had been seen as engines of prosperity.

One can draw direct and indirect lines between the now worldwide facility of central banking and the galloping economic ruin that is overtaking developed and developing economies alike.

More from Reuters:

"Rajan's calls for out-of-the-box thinking were reiterated in a memo last month, seen by Reuters, which urged increased accountability and performance and was described by a half dozen mid-level officials as toughly worded, sparking similar misgivings among some in the bank's rank-and-file.

Such reactions highlight what has probably been one of the hardest fights of his tenure: transforming what many see as a slow-moving and bureaucratic RBI of 17,000 staff into a modern, nimble central bank.

The reality is, a central bank can never actually be modern or nimble. Monetary policy tools are not for fine-tuning. You can't fine-tune anything with a bludgeon.

And theoretically speaking, central banks can NEVER improve on the market because EVERYTHING they do is a price-fix mandated by law.

Thus, monetary policy can only distort. And it really does. When you force people to do something, it may seem to work for a while but in the long term it creates tremendous monetary displacement.

Nonetheless, it seems that one does not question the efficacy of central banking, only the process. It is simply assumed that a better central bank produces a "better" outcome.

The question is – better for whom?

Well-known Washington's Blog recently supplied some potential answers in a provocative article entitled, "Central Banks Are Trojan Horses, Looting Their Host Nations."


Economics professor Richard Werner – who created the concept of quantitative easing – has documented that central banks intentionally impoverish their host countries to justify economic and legal changes which allow looting by foreign interests.

He focuses mainly on the Bank of Japan, which induced a huge bubble and then deflated it – crushing Japan's economy in the process – as a way to promote and justify structural "reforms". The Bank of Japan has used a heavy hand on Japanese economy for many decades, but Japan is stuck in a horrible slump.

The article goes on to inform us that issues applying to the Bank of Japan also affect the European Central Bank, which has "used loans and liquidity as a weapon to loot European nations."

As sovereignty drains away, so does prosperity. Today, we learn "Europe has been stuck in a depression worse than the Great Depression, largely due to the ECB's actions."

The article does not avoid the culpability of the US Federal Reserve, either. It concludes that the main effect of the Fed is to increase income disparities.

The Fed's effort overwhelmingly benefits the wealthiest Americans … and wealthy foreign investors [and] is largely responsible for creating the worst inequality in world history.

This is a crux paragraph between many other accusations. The inevitable outcome, over time, is that "money" flows to a handful of individuals directly connected with central banks.

In an example of how people's viewpoints warp once they have been exposed to the system, the article quotes Alan Greenspan as telling a Citicorp executive, "I have nothing against size. It doesn't bother me at all," when discussing Citicorp's sprawl.

This, too, is a crux insight, for it reveals that even someone as intelligent as Greenspan ends up looking at central banking from the inside out. The result of this vantage point is that such individuals cannot see the entire system as it is.

Greenspan's statement does not recognize that today's multinational corporations are artificially enlarged by court judgments regarding intellectual property and corporate personhood and further engorged by central bank credit that flows inordinately to the very largest industrial entities.

It does not recognize that the exaggerated business cycles created by central banking itself steadily expand a very few corporate entities while impoverishing the rest of society.

Beyond this, it does not recognize that the world's imminent peril is no accident. Just as the system itself has been developed to create maximum centralization and control of the few over the many, so it has been DESIGNED to fail.

It is impossible that so many design features incorporated over so many generations could have led us here without malice aforethought.

The system is designed to do exactly what it is doing: Create societies where we starve in the dark while an empowered few drive through our darkened streets in their bombproof limos headed to country estates.

And yet …

Having made these observations we should add that social systems ebb and flow and the Great War between the middle classes and their elite superiors is a constant of human history.

What we make of this life remains ours to choose. Certainly, we can take "human action" to defend ourselves and our families from the worst depredations of modernity.

We can educate ourselves about history and its cyclical triumphs and disasters. We can focus on thinking and then doing in various ways that enhance our quality of life and the pleasure that those around us take in everyday existence.

Conclusion: Central banking was doomed from the start. It doesn't make sense to bet your life's savings that a group of unelected bureaucrats will make prudent decisions over the money supply – especially when it's not even in their best interest to do so. In order to take back control of your financial fate, you need to exchange your central bank-controlled fiat currency for real assets: gold, real estate, etc. Take human action to reinforce our most precious resource: freedom.

You don’t have to play by the rules of the corrupt politicians, manipulative media, and brainwashed peers.

When you subscribe to The Daily Bell, you also get a free guide:

How to Craft a Two Year Plan to Reclaim 3 Specific Freedoms.

This guide will show you exactly how to plan your next two years to build the free life of your dreams. It’s not as hard as you think…

Identify. Plan. Execute.

Yes, deliver THE DAILY BELL to my inbox!


Your $50 Ticket to the “$100 Billion Pot Stock Bonanza”

The $100 billion marijuana industry is dominated by penny stocks…

With legalization sweeping the country, these penny stocks have already begun skyrocketing in price…

Take action TODAY, and you have a once-in-a-generation opportunity to turn a tiny $50 investment into an absolute fortune.

Click here to find out how.

Biggest Currency Reboot in 100 Years?
In less than 3 months, the biggest reboot to the U.S. dollar in 100 years could sweep America.
It has to do with a quiet potential government agreement you’ve never heard about.

  • Philip

    Philip Thanks DB. No wonder I read you every day. A brilliant summation. Add to this taxation enforcement and the ‘justice system’ there’s no place to hide. Living in Vancouver BC taxation on even modest homes has gone up 30% over the past two years and shows no signs of stopping. The productive middle classes are being looted no matter which way they turn. We are in a fascist society called regulatory democracy where government is the main job creator (all unproductive) with indexed pensions and voting changes nothing. Take care of your families first and foremost is what you advocate and it is the only worth while advice. I am increasing the size of my vegetable garden which is quite comforting. Keep up the good work and maybe we will, hopefully, have a peaceful revolution. Thanks to all your bloggers, well maybe not all of them.

    • Thanks. Good luck to you.

    • Marten

      Samething here in Whitehorse Yt, and the size of Government is just monstrous and it is striking fact that as Central Power increases
      Human initiative decreases.

  • alaska3636

    Here is a recent article that wonders why people aren’t injecting themselves with ostensibly useless flu vaccines every year:

    Apparently, it is because, of like, Jenny McCarthy or something and not the total failure of the flu vaccine to prevent an appreciable amount of flu cases.

    For what it’s worth, I don’t get a flu shot because, like, screw that y’all. Freedom.

    • Marten

      The “cure ” of many diseases is unknown to Physicians because they are ignorant of the “Whole”…For the part can never be well unless the “Whole” is well –Plato– Vaccines cure disease, like Bullets cure the War–

    • LawrenceNeal

      Junto be flippant, but the thousands of people severely damaged, the thousands of young children killed, the hundreds of young women dead from HPV injections, show that vaccinations are not only ‘ostensibly useless’, but lethal.

  • 2bvictorius

    The only asset worthy of purchase or ownership should be easily transportable by the owner or persons authorized by him. If one is so fearful of catastrophic failures of banks or even of nations that it prevents owning printed currency of any nation, or shares of stocks or bonds, then one should also expect revolution, rebellion, anarchy leading to military law, suspension of all personal liberties, including property rights.
    Farm land, real estate or shopping malls are not portable and easy targets for seizure by the tyrants. and should be avoided as hedges against financial and economic destruction of society.

  • Praetor

    Exactly on point! Let it die. We are being ruled by secular modernity, villains that are liars and thieves. To them people have become economic units, where the boardroom is more important than the coal mine. They have an unnatural ideology. In the natural world balance is a requirement, with these unnatural beings the balance has ben disturbed. Fruitful civilizations thrive, infertile ones decline. When they speak of equality, it comes to mind, ‘in heck everybody is equal’. This Leviathan, in time will go the way of Ceausescu.

    The only thing we can do, become exiles in you’re own land, don’t give in to the barbarians, and remember you cannot beat this wicked system with rugged individualism alone, you will need help from a lot of friends!!!

    • Mots

      This is yet another religious article based on the false god of economic growth. In fact, the world is shifting from exponential (population and wealth) growth into stationary phase and needs a new way (religion) of thinking. The biggest problem in the world is TOO MANY PEOPLE and the assumption that MOAR IS BETTER is completely wrong. Japan is very successful in that its population is headed in the right direction (it needs to decrease about 65% because there are 3 times too many people). The drastic drop in working age people in Japan is accompanied by just a small decrease in “GDP” which is amazing. The statement “but Japan is stuck in a horrible slump” is bullshit.

      • So you are suggesting that human mortality is a policy for prosperity?

        • Mots

          I disagree with your “GDP” religion. Biology is real and the Japanese are much better off with a smaller population and without your “GDP” religion. Your comments “human mortality= etc.” seem like the utterances of a religious zealot….. You need to get with the reality the shift of human civilization from exponential growth to stationary. ….

          • Praetor

            Just remember this. In a genocidal society, you may not be around to enjoy the stagnation. So it doesn’t matter what you agree or disagree with. And you won’t have left anyone behind to even remember you!!!

          • Mots

            Please reconsider your “MOAR is BETTER” religious conviction of exponential growth. The end of exponential growth is real. It is very healthy and useful to GET USED TO this new reality and DEAL WITH IT. This new age of human Stationary Culture will be with us a while. I suggest reviewing quality vs quantity in all aspects. Us Americans have lived with exponential growth for our entire existence and understandably have a hard time even conceiving a stationary culture. Japan on the other hand had many millions of people population 100 to 300 years ago and was steady state for some time, and developed some quality. The future in steady state (no increase in GDP or population or $) can be very wonderful. A focus on quality instead of quantity.

            Regarding genocide or killing, I understand the concern. The people in Japan spend much effort honoring their ancestors, much more than in the US. that is a RESULT of a stationary culture (a non MOAR IS BETTER culture) developed over hundreds of years where the population did NOT appreciably increase. Quality happens when the energy and attention is focused away from MOAR IS BETTER.

          • Praetor

            To bad you’re so limited! Take a step back look at the world and then look at the Universe, and keep telling us there is no room for expansion. And if you think quantity equals less quality, YOU BE WRONG! You are a nihilist!!!!

          • Dolph Longedgreens

            If I am not mistaken GDP is calculated by including government spending. So I doubt you would see it advanced as a measure of economic prosperity on these pages. Familiarize yourself with the site. Maybe check into the history of the Malthusians as well.

      • Praetor

        Well, being the Nihilist you are, genocide would be you’re way of dealing with the worlds problems. And you’re statement proves you know nothing about economics and relate economics to money, which is a false premise. But, that’s ok, believe what you will. The problem rational people have is the Keynesian globalist think like you!!!

        • Mots

          1. name calling “being the Nihilist you are” is not helpful and makes a statement about the name caller. By the way, the Japanese dont want more population and it is a choice, so to characterize such as “genocide” says something more about your thinking abilities than about any physical reality.
          2. “you know nothing about economics” a conclusory statement that reveals something about the writer, and ignores the fact that “economics” is not a science, has no predictive value and, according to many good thinkers is mostly but not completely all, bullshit
          3. MY point is that the “economics” theories and religious conviction of MOAR IS BETTER is over. What once worked for an exponentially expanding population (and exponentially expanding oil/cars/houses/$) will no longer work going forward. I suggest that the path to future success is to abandon the exponential “GDP Growth” model and develop something that comports with the new reality of human civilization, perhaps something more based on the (original Adam Smith, not later altered versions of) real goods doctrine.

          • Praetor

            Nihilist is not name calling, it is a definition of a belief. Why worry, we are all going to die anyway, so any future generation is of no concern. You are as are all Nihilists selfish, self absorbed and without human understanding. Nihilists see the world as a collective and that collective is only comprised of a small minority. Those outside the collective must be eliminated, because they are not worthy!!!

  • nailheadtom

    Fed honcho William Dudley admits that they don’t know what they’re doing:

    • Praetor

      How can that be they have all the numbers! Maybe, they just don’t believe in life on this planet.

  • LawrenceNeal

    “With the monetary systems of entire countries in the hands of a group of unelected bureaucrats, it’s clear that this was a doomed experiment from the start.” It was never an experiment, it was a carefully crafted plan “to increase income disparities. The Fed’s effort overwhelmingly benefits the wealthiest Americans … and wealthy foreign investors”. Central Banks create booms and busts, and their crony cliques sell near the top and buy at the bottom, continuously fleecing everyone else. It is a racketeer influenced continuing criminal enterprise.

  • chrisyew

    ZIRP, NIRP, QE and printing money only facilitate more gambling in non productive assets that will continually expand while these assets depend on the real productive assets to produce returns and productive assets will continually shrink as more money flow into easy unproductive assets. The non productive assets will ultimately topple when the foundation of productive assets become too small to support them. In control systems, this is an unstable state and will get out of control. Interest rate is like a damper in a control system to stabilize it. In fact if central banks intervene in the market and provide certain entities with free money, they are actually corrupting the system as these entities are able to get the free money to buy distressed assets. The entities will become the ultimate owners of all assets by the process of boom and bust. QE is stealing money and NIRP is daylight robbery.

  • autonomous

    Central ANYTHING is doomed to failure: banking, business, government, religion, name it. Why does organization tend toward centralization? It makes it possible for one or a very few to tap into the majority of wealth and power.

    America’s founders tried to insulate our government from centralization, and they were successful until the progressives succeeded in marginalizing the constitution. Once a sufficient portion of the populace was convinced they were significantly more advanced than the founders–having been indoctrinated by public education–they were subject to seeing themselves as too advanced to be governed by simple beliefs, but required more sophisticated government. A government of farmers is too simple for industrialists. The modern economy is more complicated. We are no longer country bumpkins, we are city folk now.

    How many bureaucrats would starve to death if they had to grow their own food?

  • “central banks intentionally impoverish their host countries to justify economic and legal changes which allow looting by foreign interests”.

    I would choose to use the term ‘transnational’ or even ‘alien’ rather than ‘foreign’ in the above statement.

    Beneath or within the Idea of CONTROL itself is a key into what we have in effect co-created – because the primary ideas we focus in and identify with, operate as the image or concept of self and serve as foundational to our our world or reflective experience.
    The need for – and meaningful sense derived from – the idea of ‘control’ arises from the identification within self concept over and against that which is not accepted or recognized and embraced within the concept of self.
    The denied or rejected self reflection is often the negative or dissonant feedback to thought that is out of true with who we feel and know our self to be – so there is a conflicted sense in which original nature is conformed, denied or usurped and plundered by self concept via the idea of control which is not truly balanced will, but the act of limitation or ‘intentional impoverishment’ of true presence to prop up a sense of power for the self – which fragments and denatures the victim from the victimizer who ‘gains’ power from the other being induced to ‘lose’ it.
    The complexity of the chain-reactive loop that ensues from the idea of an alien or externally imposed ‘control’ is already our general sense of the human world – and also projects or frames our perception of the non human world – as if it were lots of separate things – that have adapted or been determined by the power of other forces.
    But the effect of asserting an identity of control is a world out of control – even if for a while a form of order can be held that seems to reflect one’s status of being in control, before all sorts of shifts and variables make a sense of having lost it or of a feeling of losing it. The cost of maintaining the illusion of power is the complicity of all that seems to give it to you in actually usurping and using you.

    The first movement of and imposed ‘control’ is to pull back from or push away the unwanted feelings of self-dissonance – which are thus immediately transferred or ‘projected’ to the ‘otherness’ that is then felt and distrusted as oppositional or as an adversary to be withheld from or denied. This segregated sense of self justifies it power from the lack of power and worth seen in the ‘other’, and believes that without its control, all would turn to chaos.
    The reverse is true – excepting the narrative of the surface persona depicts a deeply distorted and filtered version of chaos, that could be at best called ‘well adjusted’. For the original dissonance is not only still active, but greatly compounded and densified by layers of denial conditionings that surface as distressing, frightening and disgusting images of humanity – which are simply blanked or screened off – in yet further limiting of consciousness in the idea of control.

    I sketch these reflections because from the ‘inside view’ we each. like Bernanke, respond only to the original meanings ascribed to perceived and believed forms of the world because we do not recognize ourself definitions in our reflection. We assume an elitism of judgement upon it as an otherness to be controlled, and where we are in the role of power, we embody those judgements (of conditioned meanings) in action.

    The unrecognized insanity of denial persists until the outer reflection is embraced to give feedback of inner aspects of denied self.
    The principle devices by which truth is hidden in plain sight are guilted self-division through to self-hatred that hides in unowned or denied fear. This has its counterpart in the lack of empathy to, or even noticing of, the fear in others, and the reactive protective urge to shift to blaming so as to assert ‘righteousness’ relative to perceived evils.

    In all this I didn’t really touch on what ‘control’ usurps except to use the phrase ‘truly balanced will’. This has to be experienced and recognized. It cannot be fitted in the framing of the sense of control – but it is the quality of aligning in and flowing with. And the opening to such joy in life – as it is to move in clear and whole purpose – inevitably brings up anything that is dissonant to that alignment – and this is not a call for ‘control’ over the outer forms so much as the pausing of reacting thus while attending to a true discernment of what is going on and how it serves purpose.
    Re-learning what comes naturally has to re-train from unnatural habit patterns before recognizing that the qualities being held in focus and embodied align the timing of relationships and communications. Trying to add this on top of a control mentality will at worst, align the sense of almost god-like power to manifest outcomes. Why ‘worst’? – because this will crash and burn and hurt very deeply … which may serve as a wake up call of a true willingness of balanced receptivity from ground zero.
    Truly balanced will is more of a dance – more of a creative outcome from a genuine willingness to engage. It may seem firm, it may seem flexible – but is not really strategic in the sense of being defined by a problem.

  • alohajim

    The system has impoverished the people to the point where most people have nothing. From there it’s been an easy road to tax the rest of us into oblivion as the folks who have nothing are easily convinced that taxing anyone who is perceived as having more than them is a good thing. The brainwashing and the unquestioning belief in outright lies is what keeps this entire structure together. The people are gladly wrapping chains around their own necks, feeling good about it, and have no clue whatsoever as to what is going on and why things are the way they are. Here in Hawaii my property tax goes up by double digits every year and something like one in three people work for governments. Homelessness is rampant and governments and banks are seen as providing the solution instead of being the root of the problem. Grunts drive BMW’s and belief in governments at any level is not only very high, it’s off the charts. It doesn’t seem likely that people will wake up in spite of efforts of many individuals and groups like DB who are trying. How do you tell someone that everything they were taught and know in their hearts to be true are lies? You can’t really fault the people as everything in our lives from birth to death is set up to teach, perpetuate, and enforce lies. Only those who naturally tend to question things, or those with a counter culture bent have any chance of understanding what is going on and who owns and controls the planet. It’s so sad that people actually believe that governments serve the people and our votes make a difference. The only solution is to opt out, go John Galt, starve the system, and be the best human being you can.