karoče, pat bubināt vai dot mājienu par iespēju 'izaicināt' CB autoritāti un... uz redzešanos my dear.

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Man gan šķita, ka Varufaki palaida brīvsolī pirms kaut kādiem publiskiem paziņojumiem. Jo, cik saprotu, viņš reāli visus bija izbesījis (nu jau, iespējams, arī pašu Cipru).

Bet, protams, jebkuras kustības, kuras var iztulkot par labu globālai banku (vai jebkādai citai) sazvērestībai, nāk tikai par labu attiecīgajai sazvērestības teorijai.

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Which of the following is just conspiracy 'theory'? 1) Central banks are independent of democratically elected government control. 2) They enable bank liquidity with fiat currencies. 3) They control the amount of money in circulation (open market operations, quantitive easing etc) and the level of debt (interest rates), as well as ensure the hierarchy of debt relationships (lowest interest rates to the private commercial banks). 4) They allow banks who act in concert to create money from nothing - ex-nihilo if you prefer. 5) They have the structure in place to act in a concerted manner themselves through regular meetings at the BIS in Switzerland.

But granted, Yanis could have jumped/been pushed for other reasons. We will, I guess, never know.

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I could look up the rest of the points, but the first point kinda defines the whole context:

"Central banks are independent of democratically elected government control"

Lots of things are out of -government- control, if you are talking about the executive arm of the state, lead by the PM. Those things are usually controlled to some extent by the other arms of the state, such as the Supreme Court or parliament.

I can't vouch for other central banks, but the Bank of Latvia is governed by its council (8 members), which is led by the president of the bank. All of them are in turn elected by the Parliament of Latvia for a term of six years.

You can argue that a central bank, which is under _direct_ government control is better. However, there are points against that as well, aren't there? At any rate, are the rest of the points in the same key (ie. taking rather a narrow view on definition of things, like "no direct government control"="no control whatsoever"?)

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Well the point is in whose interests are they controlling the money supply? The general interest, or the interest of the financial class (namely the ones at the top of the hierarchy of debt relationships)? I would posit the latter - in fact I am sure of it.

I had a long chat about this with a mate of mine doing PPE at Oxford (he's a very mature student). His stance was that aside from being lenders of last resort (would that we could all have such a service;), they are there merely to keep inflation under control - that was their mandate. Low inflation is, of course, preferable for the lending class as it keeps the value of the money high. However central banks are also responsible for inflationary pressure (of bubble proportions) in certain sectors - most importantly, the housing sector; thus allowing the lending class to.. well clean up at our expense - keep us in debt for most of our working time on the planet and receive interest payments + principal for lending money created ex-nihilo. They simply couldn't do this without central bank largesse... and there is nothing we, the electorate, can do about it.

Re Bank of England independence, the Monetary Policy Committee makes most of the decisions regarding BofE operations (as far as I can discern). It has 9 voting members (all bar one from the international banking class - major US banks, World Bank, IMF etc - at least when I last checked). Five are appointed by the Bank, and four by the Treasury: so the govt has a presence, but.. well do the maths;).

The whole movement to central bank independence has been in motion for a while now - I can lend you a book 'The Political Economy of Monetary Institutions' if you like/I can find it, which outlines how it has proceeded at differing rates in different countries, but the direction has incontrovertibly been away from the public domain. So much so that it barely gets a flicker of attention even amongst the err so-called educated and informed. This group are, in my experience, happy to concede this area as the domain of the expert technocrat, who has no political motive. It is a huge mistake, in my view, and why I bang on about it so much.

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Thank you for the detailed reply.

I am holding my opinion under review when I gather more information.

However, realizing that we are moving on to somewhat other issues, one thing that stood out to me in your reply was: "Low inflation is, of course, preferable for the lending class as it keeps the value of the money high".

Now, that, of course, is true. However, when we consider alternatives I think low inflation is valuable for most other people as well.

For example, I am able to save a little money every month against a rainy day or in order to purchase something expensive and avoid taking credit. If there was high inflation, the value of my work would depreciate quickly, and I could only buy things I can afford at the amount of a single paycheck or two.

Likewise, if I save some money in advance to have some security for when I fall ill or for my old age, once again with high inflation my effort becomes progressively more difficult, the longer I try to plan ahead, the more frugal I am.

So, unless you happen to be so poor that you can't have any savings at all (and in this case I think the problem is the level of renumeration rather than inflation or lack of it), you seem to benefit by lower inflation despite hardly being able to be called "lending class". Although, as soon as you keep your savings in a bank and invest them in any deposits or funds, you ARE in fact part of the lending class.

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True of course. One element that is important to bear in mind though is that the lending class can produce inflationary pressures precisely in those areas which they benefit from (housing for example); thereby ensuring a stable, high revenue stream for themselves. Higher inflation can also inflate debt away - sometimes a necessary tactic when the burden of debt is too great to bear.

To briefly summarize my position: if the lending class were not able to create money as debt ex-nihilo, I would probably not be so bothered by this whole affair, and would rather see it as the endless tussle between creditors and borrowers.

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> if the lending class were not able to create money as debt ex-nihilo,

Forgive my ignorance, but isn't this similar to banks under government control being pushed to print more money (raise inflation)?

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Interesting question :) The difference, I think, is the mechanism used and the sector in which inflation is occurring. In the current state we have now, there is no debt-free printing press. Instead the money is created and loaned as debt into one particular area (bank mortgages dwarf other types of bank loans, at least in the UK). This is, possibly, one reason we have the CPI (not including house prices) and the RPI as a measure of inflation. The aim, by the way (IMHO) isn't necessarily to inflate house prices, but keep the prices high (for obvious reasons). If there is inflation in the sector, it can be controlled by the banking sector, and it is not detrimental to their activities as it creates their main revenue stream.

Re govt. collusion, some commentators in the UK have attributed the Conservative party's recent victory down to their role in re-inflating the housing market through their right to buy (or help to buy - I can't remember) schemes. Property owners (or mortgage holders) feel richer when house prices rise.

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