The big picture of monetary policy.

When people analyze central bank policies, they might not focus enough on the big picture.

For example, the business cycles that inflation causes, is often looked at as an unwanted side effect, something that central banks try to avoid, because they are afraid of losing control.

However, the "rinse and repeat" might be intentional.

Remember, central banking has always been a public/private partnership, established to serve the wealthiest and the state.

Not the entrepeneurs, speculators, newly rich, new banks, the millionaires and so on.

The central banks have always, without exception, served the big and old money.

And they might like these cycles.

You see, in the phase with cheap money/low rates/increase of the money supply, relatively smart and industrious people can also accelerate their wealth accumulation using cheap loans as a catalyst.

Which the big money don't like.

When central banks turn the screw and stabilizes the money supply, or as we see now, reduce it sharply, they create a firesale.

Many of those who became wealthy with cheap money go belly up.

When that happens the old and big money buy on the cheap.

An extreme example is from Europe in the 1920s.

It's a story that I've covered in the #Fraudcoinbook.

Under the pretext of "this is the only honourable thing to do" governor Montagu Norman of Bank of England (who designed this scheme with governor Benjamin Strong of the Federal Reserve Banko of New York) fooled other central bank governors in Europe to reduce the money supply in order to get the same value of the currencies against gold as they had before WWI started in 1914.

It created a historic firesale, that the super wealthy benefitted from, because the BoE and the Fed maintained a cheap money policy.

Furthermore, one needs to understand the central banks time perspective.

Their No. 1 question is:

"How long can our current model work?"

Today's model has worked since 1669, when the first central bank was established in Sweden.

It was professionalized in 1914 when the Fed was established as the first real central bank in the US.

As long as the Fed and the US govt could control the escape hatches, which were the following:

- other nations' monetary policy (every country must inflate), and

-gold (only the right people and institutions should have access to it, and the price must be manipulated)

then they were "all good".

Meaning, they could continue for a looooong time.

However, it was necessary to have an eternally increasing degree of centralization, for instance going from a multipolar world order, to a bipolar world order, to a unipolar world order, which has happened all the way since 1914.

And, furthermore, the scheme wouldn't be robust if a new monetary technology suddenly appeared.

Today, the central banks face two problems:

- reversion to a multipolar world order, and

- the advent of #bitcoin

This shortens their time horizon.

The big money that controls the Fed probably now sees that the current system is running out of legs.

The result, IMO, is that they have changed their strategy.

I think the natural thing for them to do is to create an enormous firesale again.

And, in the process, I believe they will try to gobble up as much bitcoin, gold and real estate as possible.

The main risk for them is the following:

The common people, the newly rich, the industruous entrepreneurs and the intellectuals might object.

Because, what this boils down to, is a battle between ideas.

Do people want to be sovereign and free or will they welcome serfdom?

A rebellion spells real trouble for those who control the central banks.

A dedicated minority is enough.

This is the big picture, in my view.

And if I am correct, the details might look very different when you begin to analyze them.

Remember, the central banks aren't technocratic organizations.

They're there to make the wealthiest become even wealthier.