Q&A: CENTRAL BANKING? —“Hey Curt, I wanted to know if you believe in Central b

Q&A: CENTRAL BANKING?

—“Hey Curt, I wanted to know if you believe in Central banking, or should we end the fed?”—

Fiat money=shares in the economy. Just as big business requires shares to compete, so do countries. competition is not possible w/o them, because access to credit is such a competitive advantage.

However, it’s not necessary to distribute ‘shares’ (liquidity) through the financial system, which lacks sufficient incentives to get money into consumer hands where it can be disposed of to reduce debt and increase spending. Instead, Liquidity should be given to consumers(taxpayers), not the fin sector.

The technical issue is ‘multiplier’ caused by layers of credit money created by each dollar of fiat money. Therefore it will take some experimentation before we know how to manage liquidity via consumers as we have via interest rates.

I have been saying that ‘this will occur’ because governments will have no choice soon but to seek another model now that we are fairly certain (a) that monetary policy is a very limited lever, and (b) that fiscal policy is a very limited lever, and (c) the only actoinable lever is direct redistribution to consumers, (d) who will often decrease debt,just as often as they increase spending, and (e) this will cause the gradual elimination of the financial sector, and an increase in dependency upon redistribution of shares for the citizenry.

And this is why everyone is afraid of doing much about it. The current system is bad. But incrementally adopting the only technical method we have of exiting the bad system is risky.