Answer from ECB

This is the answer from ECB to The Great Fraud of the central banks!:

Dear Mr Onyx,

Thank you for your email of 18 March 2021 and sharing your views and observations with the European Central Bank (ECB).

The coronavirus has had an unexpected and large impact on the global economy. Together with the “shutdown” of national economy, this corresponds from the economic perspective to the combination of a contractionary supply shock and an aligned demand shock. 

Back in the second quarter of quartal 2020, a series of prestigious economic institutes had already forecast a double-digit decline in gross domestic product for Germany, Europe and also globally.

Against this backdrop, governments and central banks have launched unprecedented supported packages of previously unimagined dimensions. This will no doubt be accompanied by significant costs, although Germany can benefit from and live off its previously very sound financial policy. 

Previous bouts of hyperinflation (with monthly inflation rates in excess of 50%) have always been caused by sovereigns assuming excessive volumes of debt over longer periods of time in connection with monetary financing by the central bank. This will certainly not be the case in Europe. By their very nature, the current measures are one-off measures of limited scope and duration, even if they will need to be maintained for a somewhat longer period of time. 

For further information, you may also wish to follow the ECB strategy review via the ECB Listens Portal here:

Yours sincerely,

Public enquiries team 
Internal and External Engagement Division 
Directorate General Communications

Therefore, according to the ECB, there will be no inflation in excess of 50% per month. We can be reassured. I can’t see any other clever conclusion from this short answer.

However, the excessive “money printing”, or as it is now professionally called “quantitative easing” (QE), did not start with the epidemic in 2020, but it started as early as march 2015. A direct consequence of a such monetary policy, which has been going on for six years now and only intensified in 2020, is a very high inflation of assets prices, including the real estate and the devaluation of saver’s savings in banks through inflation and 0% interest rates on deposits. This was overlooked in the answer or is probably the only appropriate comment on this “no comment”. That’s how we roll.

In such a monetary environment, banks do not need savers any more, as the necessary liquidity and bank reserves can be provided directly by the central bank itself. By printing excessive amount of new money. But in practice this also means that the vast majority of money in the banks is no longer tied and can be withdrawn on request. So an ideal environment for a bank run.

Although I know that the central bank does not have any educational tasks, it nevertheless seems to me that they are giving the wrong signals to the younger generation in the sense that money saving is a bad thing and that savers are the first to steal. Steal legally! Young people then understand this as it is necessary to work with money in the same way as with tokens in casinos. Place bets. And right now, most young people, in my opinion, are betting on the crypto market. Admittedly, some will take home a new expensive car, but in the event of a major market crash, many will lose all the savings. This is the weakness of casinos. Winning depends on luck and it can never be a serious saving.

The European Central Bank can imagine that such a monetary policy also helps young people to find housing more easily. It is true that loans are more easily accessible and the interest rate on mortgage loans is low, but such a monetary policy has led to high growth in real estate prices. So they offer cheap loans for very expensive apartments! On the other hand, many young people are not creditworthy at all to buy a home, as they do not have enough money saved for a deposit or have a bad credit rating. In fact, such a monetary policy benefits the wealthiest the most, who can buy second, third, fourth or fifth investment real estate with cheap loans. Whether this is intentional is difficult to judge. In my opinion it is. After all, central bankers are not stupid and can see well what their monetary policy has caused. Actually they knew this in advance, because they are repeating Japan monetary experiment! They see well and know well whom it is taken and who benefits most from such a monetary policy. The fact that interest rates on consumer loans have not dropped significantly, despite the fact that banks now have money practically for free, also speaks in favor of the thesis that this is a deliberate fraud aimed at inflating the value of investments! If they really wanted to stimulate consumption, they would also lower interest rates for consumer loans.

Long term QE is intelligent assets price pumping scheme, but ordinary people are just losing savings and purchasing power because of stealth devaluation and the amount of debt is fast building up. This hardly leads to sustainable long term economic boom. More probable is another bust cycle, even deeper than the last one.

Maybe central banks expect that now all of a sudden every little bank saver will become overnight an investment banker and closely monitor central bank moves, interests on government bonds, do stock analyzes and monitor graphs of various indexes and move money between different investments. Or entrust the savings to various funds or asset managers, which of course they take care of themselves in the first place and usually make a lower return than an ordinary index fund (ETF) with a minimum management fee. And usually such a small investor is the first victim of market crash, as he or she withdraws too late or sells at a loss at the wrong time.

The very idea of ​​stealthy stealing savers in banks in order to make the richest even much richer is in my opinion financial genocide, which must get its place in history books!

On the one hand, I may even be trying to understand how central banks want to increase consumption and thus inflation with such monetary policy measures, but the effect may be just the opposite and inflation will rise for other reasons. Namely, today everyone can notice how fast real estate are becoming more expensive, how the prices of US shares in particular are growing, how the price of gold has risen, and the prices of various speculative cryptocurrencies in general. As I once wrote, even “ordinary” people want to get rich, not just spend and buy a new kitchen, a new TV or a new car every couple of years, which causes the so-called “money velocity” and contributes to an increase in officially calculated inflation.

So an environment of zero interest rates and easily accessible money because of excessive money printing is actually one big advertisement for investment, not for consumption!

If you think about it, in such an environment you are not going to buy a new car, a new kitchen or a new TV, but you are investing all available money, or even better you are going to a bank for the highest possible loan, with the lowest possible true fixed interest rate, buy with this money investment real estate and become a landlord. But all of these, with high credit for the next 30 years, will be poor consumers for the next 30 years, as they won’t have much of a salary left to be able to spend and buy things they may actually don’t need. This, in turn, is the nightmare of consumer capitalism. Consumers, who can’t or don’t want to spend. Given that many people with such a long-term loan are not even aware of how long period is 30 years and what all happens during that time.

Such monetary policy by central banks has, as has been said, led to a sharp rise in assets prices and this is due to money printing, not economic growth. Many of these assets now have unrealistic, highly inflated value. However, this problem of unrealistic investment valuation can be solved in two ways. Either all these bubbles burst and the owners of these investments lose a lot of (fictitious) money, or is such a high valuation justified by high inflation, because in this case money loses on value. Given that this time the central bankers seem to have turned against ordinary people and the middle class so that the rich can be significantly richer, I am personally more inclined to the possibility of high inflation, where people will lose even more savings in the next few years at banks, and the purchasing power of wages and pensions will also fall significantly further. However, the middle class will practically disappear, as the middle class will only be people with very high debts. But erasing middle class is self destructive for the economy.

All in all, in my opinion, this situation is also a kind of a financial communism, where the central banks have taken over the role of central committees in communism, as now all the spotlight is on them and everyone is closely monitoring their decisions. This is simply because the central banks have interfered with their moves (asset purchases) so much on the financial markets. Market corrections are no longer possible if central banks are buying everything. When no one wants to buy an old apartment in Ljubljana for 3000 €/m2, the central bank will buy it with printed money within the asset purchase program. The central bank, by definition, never runs out of money because it can print as much as it wants! In a normal economic environment, corrections occur and corrections are part of self-regulation. This has now been abolished. But this is not free lunch! As a result, the purchasing power of money, wages and pensions is becoming increasingly devalued and people will be able to afford less and less, and central banks balance sheets will become bigger and bigger…

At the end of this process central bank will own everything including radioactive toxic wastes?

In my opinion, they have imposed a huge burden and responsibility on themselves completely unnecessarily, because now practically everyone expects to be rescued by the central bank. Only at the expense of whom? At the expense of savers at commercial banks? At the expense of older people, who saved money all their lives to have something when they will no longer be able to work? At the expense of those who can not manage unforeseen costs of a few 100 euros without credit?

Yes, I know the excuse. The world’s central banks are just following what the US Federal Reserve is doing and US Federal Reserve is doing what Bank of Japan did. But this doesn’t reduces their responsibility. If I follow a serial killer and do exactly the same thing he does, I am no less a cruel serial killer! I’m just copycat.

I’ve seen a few frauds in my life, but this one is the most intelligent and the largest in terms of scope, as it is practically a global fraud.

In my opinion, the authors of this fraud definitely deserve their dishonorable place in history! Central banks should inspire confidence, not be a source of a major financial fraud, and being a central banker is, among other things, a great responsibility, as their decisions have a strong impact not only on the economy but can also jeopardize people’s life savings, pensions and much more. Stealing should be called stealing regardless of who is thief.

When I sent them a slightly nicer packaged reply, the ECB replied as follows:

Dear Mr Onyx,

Thank you for reverting to us with your email of 25 May 2021 and for sharing your views and observations with the European Central Bank (ECB).

We would like to inform you that your concerns have, indeed, also been addressed to the ECB by other members of the public and the ECB is taking a close look at these topics. In this regard, the ECB President Lagarde has launched the ECB strategy review, including a public consultation among stakeholders, academics, financial sector representatives, civil society organisations as well as private persons. A first summary report has been published and is accessible on the ECB website here.

You may further wish to follow the decisions and information on the review of ECB monetary policy strategy through the ECB Listens Portal.

Yours sincerely,

Internal and External Engagement Division
Directorate General Communications
Tel: +49 69 1344 1300

Further controversy with the ECB makes no sense.

With some bad luck, it can easily happen to central bankers that at the end of this financial operation (manipulation), everyone will hate them. First, savers at banks who have already lose money through inflation and 0% interest rates. At some point, it may happen that due to a too high inflation, central banks will be forced to sharply raise interest rates, which will immediately cause major problems for all those who have mortgages with a variable interest rate. Many around the world will lose their homes and houses due to their inability to repay their debts. Many zombie companies, that are only kept alive by a loose monetary policy, will fail. This is likely to be followed by a severe recession and the collapse of stock markets. At the same time many countries will find themselves in trouble, because they will no longer be able to repay high debts due to high interest rates. And the system works so that debts are paid by new loans! However, the debt of countries, expressed in GDP, will increase sharply due to the recession and lower economic activity, and consequently the fall in GDP. How to save the banks they know by now. By printing new enormous amount of money and thereby further devaluing currencies. And people around the world will stand in long lines in front of the banks to get their worthless paper money. Just like in Japan 1997. In short, the circle of people who will eventually hate central bankers could be very, very large!

If this black scenario really comes true, the blame this time will be solely on the side of the central banks and their monetary policy. For a number of years, all warnings were overheard and ignored. Oh, and eurozone (and probably even EU) will be just a past history.

The world financial and monetary system is not like a nuclear power plant, where exist very precise mathematical and physical models and can be regulated very precisely by negative feedback loops. Central banks certainly do not have such models, and such precise regulation of this system is unfortunately not possible. Therefore, there is no guarantee that this attempt will not end like a financial Chernobyl. A global financial meltdown. We hope they know what they are doing and most of all we hope that luck will be on their side. And they will need a lot of luck, because they are working against some basic principles of justice and moral gudelines.

It doesn’t mean anything yet just because I have very bad feeling about this. But I have no imagination how can this end as anything else as a new global financial and economic disaster of biblical proportions! They have never solved problems of financial crisis 2008. They have just exploited financial crisis for a new global financial fraud abusing extreme monetary measures (0% interest rates, excessive money printing) for many years and all the problems just got much bigger. There is currently a death calm, but Covid-19 was in my opinion iceberg for this Titanic called Global financial and economic system. Cracking is heard and orchestra is playing like never before. But this ship seems to sink…

When we adopted the euro in 2006, some of us were happy that it would no longer be so easy to print money, and we handed over money management to someone who could responsibly handle it. History clearly has a sense of irony. Once in Belgrade, now they are printing excesive amount of money in Frankfurt am Main – Germany.

Christine Lagarde (ECB): “We Should Be Happier to Have a Job Than to Have Our Savings Protected.”

Dr. Onyx (WTF): “Fine. But why not nationalize all private property too and install communism, where we will all have work (not just jobs!) and be happy like in North Korea? This doesn’t sound so stupid after all, does it?”

Thou shalt not steal! Stealing peoples savings is theft!

Translated by google translate. Stupid google translation repared by me.

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