Wednesday, January 28, 2015

Central Bank Wars?

The U.S. is almost alone in its onerous laws, ostensibly about taxes and or money laundering, which are getting so bad various foreign banks have simply decided not to allow U.S. citizens to bank with them. I have often thought this was akin to shooting oneself in the the foot, since a healthy economy depends on trade, but recently I have begun to rethink a little.

Most central banks of the world engage in Keynesian economics, and are essentially doing the same stuff the Fed does, but the Fed can enjoy the global dependence on the dollar whereas foreign central banks cannot. In order for Keynesian machinations to appear to work, the central banks need accomplices, unwitting or otherwise, who borrow money. If people don't want to borrow money, deflation is likely to happen despite all the shenanigans.

So, I wonder if the reason intrusive American laws have led to Americans being largely stuck with their own banking institutions and unable to access foreign banks is that these sort of laws (inadvertently or not) keep most Americans from accessing foreign credit. One would assume the foreign central banks are just as desperate for willing accomplices, and one way to beat the Fed would be to steal its borrowers.

It is not that I think these laws are being made and implemented with an ulterior motive. Rather I think there is probably more people currently engaged in what is essentially a false central bank economy rather than an actual economy. Thus laws that are ludicrous and obviously dangerous to true economic growth proliferate because they help prop up the false economy.

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