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The injustice of easy money is going mainstream

The Daily Mail reports Interest rates: How keeping them at a record low is a deliberate government ploy to pay off its debts:

A stealth raid by the Bank of England has stripped savers of more than £170billion, a Money Mail investigation can reveal.

By slashing the base rate to a record low of 0.5?per cent and allowing the cost of living to soar for more than four years, the Bank has whittled away the value of cash sitting in High Street accounts through a ‘secret tax’.

And it is not just savers who have effectively had their money pinched. Anyone who has a fixed monthly income, such as pensioners, or has had a tiny pay rise, has also lost out.

campaign constantly against the injustice which is being manufactured by our centrally-planned system of money and bank credit so I am glad that the arguments are going mainstream.

We are in the midst of a great battle between debtors and creditors. Deeply indebted governments are on the side of those in debt. Too many claims on real goods have been created by bank lending so now the central banks are destroying those claims by stealth.

The implications for our society will be profound. I cannot help thinking that the whole enterprise would have already come crashing down if the public could see the tens and hundreds of billions of Pounds – and Dollars and Yen… – as paper in wheelbarrows going to governments’ favoured friends.

Given that the alternative is higher interest rates, sound money and a painful correction, governments and central banks think they are taking the easy way out. We’ll see.

See also:

This article was previously published at SteveBaker.info.

4 comments to The injustice of easy money is going mainstream

  • Gary

    The central banks have embarked on the biggest asset transfer,theft, in the history of the world to save themselves and their commercial banks. Ignorant and malevolent politicians have facilitated this. They are willing to sacrifice the country to save themselves. History will judge this as treason and if there is any justice there will be a reckoning.

  • Paul Marks

    Real savers are being destroyed.

    Borrowing is not from REAL savings – it is from credit bubbles, and the government printing press.

    The banking and financial markets were horribly distorted even before 2008.

    Now things are so debased that it is a wrong to talk about “markets” at all.

    It is all a fraud.

    For example, the elite pretend that the price of gold has gone down even when the supply of gold has seen no great increase – and the DEMAND for gold has seen a great increase.

    The establishment elite are able to pretend this because they (and their Central Banks) having been “selling gold” that DOES NOT EXIST.

    There are no real markets in the financial centres of the West.

    The banking market, the stock markets, the gold (and silver) market.

    All a fraud.

  • Andy V

    You know things are going bad, when the DM takes a pop at a Conservative prime minister. Taxation through inflation should never be a Conservative policy, I expect that from Liberals. DC may well pay a bitter price if inflation gets completely out of control. I think that figure is underdoing it, Simon Rose estimates the figure will be £500bn by 2016, at the current trajectory.

  • Paul Marks

    Carl Menger showed that real money gets its value from people (buyers and sellers) CHOOSEING to value a commodity – this commodity becomes money (not just a medium of exchange – but also a store-of-value).

    Governments take this commodity-money and (over time) breaks (corrupt – undermine) the identity between the currency and the commodity – in the end of the process the money is just “fiat” (not only is it no longer the commodity, gold or whatever the commodity was, it no longer even has a link to it).

    However, the government “fiat” (command-order) still has a (perverted – dark) source of value of its own – FORCE. Government legal tender laws and tax demands – although even if the government collapses its fiat money may still be used for awhile (out of habit and out of a lack of an alternative).

    But what of the “money” of bankers (and other such) their “broad money”.

    This is not a commodity and it is not backed by legal tender laws and tax demands – this “broad money” is NOT money at all, it is CREDIT (a credit BUBBLE – not a store-of-value), and eventually such a bubble (if not backed by the government printing press) must burst – the “broad money” (the credit bubble) must shrink back down towards the “monetary base” (the actual money).

    As for the idea that “government fiat money is at least physical (token notes and coins) so it can be used to finance the Welfare State and so on….” which one sometimes hears from people who oppose banker credit bubbles (but still want wild fiscal policies – and wild monetary policies to back the wild fiscal policies).

    That is just another version of “free lunch economics”.

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