Quote from: Karolus on June 20, 2016, 08:56:55 PM

Have you seen the balance sheet of the Federal Reserve? It's only a few trillion dollars. The Fed literally has less than what Fidelity manages. The global bond market is $100 trillion+. The derivatives market is so big and unregulated that it's unmeasurable but is estimated at $1 quadrillion+. You vastly overestimate the importance of central banks.

The only rates central banks set are on their own deposits and interbank lending. They don't set rates of return on other investments. That's what the vast market does.

The commodities markets have a bigger say on inflation than central banks do. The Bank of Japan is the best example. It's been expanding the money supply for, how long, 15 years? But inflation there has stayed abnormally low.

Is your ideology to force "elites" to acquire precious metals to back the unknown $quadrillion+ in liabilities?

The amounts only reflect what central banks have had to do in the past. Even though the Fed more than doubled its balance sheet after 2008, it has basically been able, so far, to leverage its ability to issue unlimited money (plus its advertised will to do so) to get the markets to do most of the buying and holding of the assets it wants them to. This is what it prefers. Actual money printing on a vast scale would only be a last resort (which it might be contemplating -- note the increase in talk of 'helicopter money' to get inflation going.)

True, central banks can't do all the heavy lifting, but the alliance between central banks, top politicians, and financiers is quite powerful.

Western central banks have always used small but key incentives to get the markets to comply (that is, except the few times they lost control even in the US -- the present time may be a slow case of this.) Short term interest rates (which they control pretty well) are historically kept artificially low to push people to spend money and to acquire riskier assets like stocks and real estate. The gold and silver standards were used to keep the rate of return of gold and silver at zero (ie below even short term interest, and below the inflation caused by asset issuance) to push people out of these assets.

As I said, these are small but key steps. The markets do the rest (at least in 'normal' times.)

The BoJ problem you cite is precisely a case of gentle but chronic loss of control, resulting in economic misery from the stagnation caused by money hoarding -- ultimately a result of the financial bubble, and the distortions that happened while the bubble was inflating. We may be headed there, but we may not be able to stand it for as long as the Japanese have.

But ability of the BoJ and Japanese govt. to fend off big asset drops (and the immediate pain) for all this time is a (small) example of the power of the central authorities. Almost by definition, private market participants dominate the scene during 'good' times -- during 'bad' times the fangs of a state-controlled system are exposed, more and more.

And being exposed in this way is part of why the elites call these times 'bad!'

To the extend that private parties still buy or hold assets, central authorities don't interfere. If they're doing what you want, let them. Why expose your system?

As I mentioned indirectly, the pegging of currency to 'hard money' is just another tool in the authorities' arsenal to profit from a manipulated system. What we need is to ban any manipulation whatsoever.