Topic: Do we Need Central Banks? - page 13. (Read 2997 times)
Thank you for the informative article. I think we need central bank. As all the countries of the world has a central bank and this central bank regulates some functions which is very important for a country.
If we approach this issue from a human point of view, I believe that central banks are a product of modern society, or rather a group of people who want to control the popular masses and are not needed for ordinary people. But the modern world is so arranged that without the presence of controlling bodies in the world there will be chaos, people do not know how to organize themselves. A decentralized financial system within the framework of existing states is not possible.
That local banking is still a centralized one. Though what people want is true freedom, but take also in consideration things like inflation and balance. If there is no central bank there would be chaos in monetary system. Rich will get richer and poor gets poorer, because rich can hold as much money as they want while poor can't do it since they need it for daily expense. Also, no money would produce because how people can trust something that is man made with out convention.
Maybe you personally do not need a central bank, but it is necessary for every state, at least to support the course of national money and develop a common policy of monetary relations in the country and develop a unified approach to banking. Therefore, I believe that central banks are needed and they will continue to exist.
Need not
Because Bitcoin was dug out by hard power, it could not be sent by a fixed organization.
Then the role of the bank for us is only storage or investment, but if it is stored, if Bitcoin cuts prices or raises prices, can we operate in time, and investment, he can guarantee how much our annual interest rate.
Because Bitcoin was dug out by hard power, it could not be sent by a fixed organization.
Then the role of the bank for us is only storage or investment, but if it is stored, if Bitcoin cuts prices or raises prices, can we operate in time, and investment, he can guarantee how much our annual interest rate.
This post belongs to the Economy forum board,not the Bitcoin discussion board.
In the beginning of modern capitalism,central banks were private companies,who have the government`s permission to create paper money.They are created by a bunch of bankers,who were giving loans to governments.
They were created as a some sort of financial monopoly.Later,the private central banks were taken under the government control and became public institutions.Now,we don`t need them,but we can`t destroy them.
In the beginning of modern capitalism,central banks were private companies,who have the government`s permission to create paper money.They are created by a bunch of bankers,who were giving loans to governments.
They were created as a some sort of financial monopoly.Later,the private central banks were taken under the government control and became public institutions.Now,we don`t need them,but we can`t destroy them.
Humanity go in the chaos if we dont have central control unit.
Dont believe to the freedom by some young crypto enthusiast
Dont believe to the freedom by some young crypto enthusiast
Of course Yes. Almost all the countries do have central banks to perform these functions. Central banks are autonomous bodies that work independently keeping economic growth priorities in view.
Well, central banks and fiat currencies are only a pretty new concept to humankind. The economy, as well as the currency, can definitely function without a central bank, as demonstrated by the days where paper currency did not exist and we used gold and silver as main forms of currency.
These are essentially the most basic forms of decentralized currencies, and they certainly worked well to serve their purpose - to store value, and to serve as a medium of exchange in transactions.
It's up to debate whether or not society would function better without a central bank, but all I know is that if I wanted to save my net worth in something, I would not put the majority of it in something which value is based on a central organization's trust, and they essentially can inflate the supply of as much as they want to.
These are essentially the most basic forms of decentralized currencies, and they certainly worked well to serve their purpose - to store value, and to serve as a medium of exchange in transactions.
It's up to debate whether or not society would function better without a central bank, but all I know is that if I wanted to save my net worth in something, I would not put the majority of it in something which value is based on a central organization's trust, and they essentially can inflate the supply of as much as they want to.
Shifting from Central Planning to a Decentralised Economy: Do we Need Central Banks?
by Professor Richard A. Werner, D.Phil. (Oxon)
I. The Central Bank Narrative
For more than the past four decades, public policy discourse, especially when touching on macroeconomic and monetary policy, has been dominated by the views held and actively sponsored by the central banks, particularly in Europe and North-America, as well as Japan.
Their policy narrative has been consistent over time and virtually identical between central banks, which is why I shall refer to it collectively as the ‘central bank narrative’. It has been mirrored in the type of economics that central bankers have supported and that has indeed subsequently become dominant in academia and among the economists selected as the experts of choice in the major newspapers and television channels: the theoreticians advancing neo-classical economics.
This central bank narrative (and hence also the dominant neo-classical economics, also known as ‘mainstream economics’) has at least five major pillars, which I shall list briefly:
The truth of the matter is: We don’t need central banks. Since 97% of the money supply is created by banks, the importance of central banks is far smaller than generally envisaged. Moreover, the kind of money that commercial banks create is not privileged at law. Legally, our money supply is simply private company credit, which can be created by any company, with or without banking license.
Eurozone countries, having given up the right to their own currencies, can still create money and reflate the economy: the government, for instance in Spain, simply needs to stop the issuance of government bonds, and fund the entire public sector borrowing requirement from the domestic banks that create it out of nothing – and can do so at more competitive rates as the bond markets: this policy of Enhanced Debt Management (Werner, 2014b) not only would make it obvious that Spain does not need the ECB, but it would also put the national debt profiteers – the bond underwriting firms such as Goldman Sachs and Morgan Stanley – out of business.
This reality of private money creation also means that we can, without legal obstacles, create a decentralized system of local currencies, without central bank involvement.
The key principle of such decentralization is local autonomy, self-determination, self-responsibility and self-administration. These are in fact the fundamental principles of the co-operative movement, as championed by Hermann Schultze-Delitzsch and Wilhelm Raiffeisen over 150 years ago. This co-operative movement early on realized that a crucial role for co-operatives is in the creation of co-operative banks controlled by the local communities. Sadly, in the UK credit unions are not banks, since they are not allowed to lend to firms in meaningful amounts, and don’t have a banking license. Thus we need to create true community banks.
Lord Action pointed out:
“It is easier to find people fit to govern themselves than people fit to govern others”.
“Towns were the nursery of freedom.”
The German banking system is dominated by 1,500 community banks, which are also the majority of banks in the entire EU. This means that 80% of German banks are not-for-profit, which has strengthened the German economy for the past 200 years. A banking system consisting of many small banks is also far less prone to boom-bust cycles and it creates more jobs per given amount of loan than large banks. Thus community banks also result in a more equal income and wealth distribution.
Local banking is highly popular in Germany, because SMEs get access to finance that would not be serviced by large banks. The community banks provide their services at competitive rates and support their customers also during recessions. With community banks, the wider community gets a bank whose goals are aligned with theirs, banks that pay taxes, banks that support local growth and jobs. At the same time community banks offer customers a place to put their money where it can benefit the local community, not far-flung projects or speculators.
Can we tackle this challenge?
Until the 1970s, there has been much optimism in economics and there have been high expectations that many of the problems of mankind would soon be solved.
Was this a reasonable expectation?
While it has not come true, it was a reasonable expectation. This is because
“Our problems are man-made, therefore they may be solved by man. And man can be as big as he wants. No problem of human destiny is beyond human beings”
John F. Kennedy
by Professor Richard A. Werner, D.Phil. (Oxon)
I. The Central Bank Narrative
For more than the past four decades, public policy discourse, especially when touching on macroeconomic and monetary policy, has been dominated by the views held and actively sponsored by the central banks, particularly in Europe and North-America, as well as Japan.
Their policy narrative has been consistent over time and virtually identical between central banks, which is why I shall refer to it collectively as the ‘central bank narrative’. It has been mirrored in the type of economics that central bankers have supported and that has indeed subsequently become dominant in academia and among the economists selected as the experts of choice in the major newspapers and television channels: the theoreticians advancing neo-classical economics.
This central bank narrative (and hence also the dominant neo-classical economics, also known as ‘mainstream economics’) has at least five major pillars, which I shall list briefly:
The truth of the matter is: We don’t need central banks. Since 97% of the money supply is created by banks, the importance of central banks is far smaller than generally envisaged. Moreover, the kind of money that commercial banks create is not privileged at law. Legally, our money supply is simply private company credit, which can be created by any company, with or without banking license.
Eurozone countries, having given up the right to their own currencies, can still create money and reflate the economy: the government, for instance in Spain, simply needs to stop the issuance of government bonds, and fund the entire public sector borrowing requirement from the domestic banks that create it out of nothing – and can do so at more competitive rates as the bond markets: this policy of Enhanced Debt Management (Werner, 2014b) not only would make it obvious that Spain does not need the ECB, but it would also put the national debt profiteers – the bond underwriting firms such as Goldman Sachs and Morgan Stanley – out of business.
This reality of private money creation also means that we can, without legal obstacles, create a decentralized system of local currencies, without central bank involvement.
The key principle of such decentralization is local autonomy, self-determination, self-responsibility and self-administration. These are in fact the fundamental principles of the co-operative movement, as championed by Hermann Schultze-Delitzsch and Wilhelm Raiffeisen over 150 years ago. This co-operative movement early on realized that a crucial role for co-operatives is in the creation of co-operative banks controlled by the local communities. Sadly, in the UK credit unions are not banks, since they are not allowed to lend to firms in meaningful amounts, and don’t have a banking license. Thus we need to create true community banks.
Lord Action pointed out:
“It is easier to find people fit to govern themselves than people fit to govern others”.
“Towns were the nursery of freedom.”
The German banking system is dominated by 1,500 community banks, which are also the majority of banks in the entire EU. This means that 80% of German banks are not-for-profit, which has strengthened the German economy for the past 200 years. A banking system consisting of many small banks is also far less prone to boom-bust cycles and it creates more jobs per given amount of loan than large banks. Thus community banks also result in a more equal income and wealth distribution.
Local banking is highly popular in Germany, because SMEs get access to finance that would not be serviced by large banks. The community banks provide their services at competitive rates and support their customers also during recessions. With community banks, the wider community gets a bank whose goals are aligned with theirs, banks that pay taxes, banks that support local growth and jobs. At the same time community banks offer customers a place to put their money where it can benefit the local community, not far-flung projects or speculators.
Can we tackle this challenge?
Until the 1970s, there has been much optimism in economics and there have been high expectations that many of the problems of mankind would soon be solved.
Was this a reasonable expectation?
While it has not come true, it was a reasonable expectation. This is because
“Our problems are man-made, therefore they may be solved by man. And man can be as big as he wants. No problem of human destiny is beyond human beings”
John F. Kennedy
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