‘Monarchs of Money’: How central bankers became the new ruling class
A new short documentary from the CBC titled The Monarchs of Money explains in hair-raising and gut-punching detail how “The world’s central banks have printed unimaginable amounts of money in recent years. Neil Macdonald explores what this means for the global economy and for your financial well-being.”
There’s also an accompanying written report, billed as the first in a series of articles to be collectively titled Power Shift, “on the rise of the central bankers and the global imposition of cheap credit”:
Quietly, without much public fuss or discussion, a new ruling class has risen in the richer nations. These men and women are unelected and tend to shun the publicity hogged by the politicians with whom they co-exist.
They are the world’s central bankers. Every six weeks or so, they gather in Basel, Switzerland, for secret discussions and, to an extent at least, they act in concert. The decisions that emerge from those meetings affect the entire world. And yet the broad public has a dim understanding, if any, of the job they do. In fact, these individuals now wield at least as much influence over the lives of ordinary citizens as prime ministers and presidents.
The tool they have used to change the world so profoundly is one they alone possess: creating money out of thin air. There is an economic term for this: quantitative easing. More colloquially, it’s called printing money. Since the great economic meltdown in 2008, these central bankers have probably saved the world’s economy from collapse, and dragged it into the unknown at the same time. The amounts they have created are so vast as to be almost incomprehensible — trillions of dollars in pounds and euros, among other currencies.
. . . [T]here are two big concerns with what this new central banker elite has done. One is that no one really understands the consequences of pumping such vast amounts of money into the world economy. It’s already distorted the prices of certain assets, and some fear hyperinflation or market crashes are inevitable (the subject of tomorrow’s column). The other is that it’s caused a massive shift in wealth, from savers to borrowers, and is taking money out of the pockets of almost everyone approaching or at retirement age.
. . . Most of that generation grew up believing that if you save and exercise prudence that you will earn at least a modest return on your hard-earned money to keep you comfortable in your old age, perhaps along with a pension. But the money-printing orgy of the last five years looks to have shot that notion to smithereens. Very deliberately, the central bankers have punished savers, pushing interest rates so low that any truly safe investment — and older people are always advised to play it safe — yields a negative return when inflation is factored in.
. . . The plain fact. . . is that central bank- and government-imposed solutions to disasters caused by irresponsible, greedy, foolish behaviour are almost always carried out on the backs of the virtuous.
— Neil Macdonald, “The ‘monarchs of money’ and the war on savers,” CBC News, April 29, 2013
This is brilliant dot-connecting, big-picture journalism of the most valuable sort. Thank you Daniel Gill for the tip!