The Canadian central bank has once again raised interest rates, "Bank of Canada governor sees rates staying high even as prices stabilize and economy retreats" - Just like the FED, central banks are ignoring the facts (falling inflation rates and weakening economy). But why? Central banks are not representatives of the people but only follow the interests of the financial elite - in America, this is already evident due to its legal structure, as the FED is owned by banks and not the government.
In Europe, one could still excuse the ECB's poor decisions with the incompetence of its leader, but the global consensus to make economically senseless decisions suggests that this is part of worldwide efforts to redistribute assets from the general population to the financial elite, as food price inflation and energy prices, like mortgage rate hikes, primarily affect the "common people." When prices began to rise continuously due to the also completely unjustified measures taken in the "pandemic," central bankers did not take small and economically harmless steps to counteract directly; instead, they all claimed in unison that "inflation is transitory“. An interest rate or monetary policy driven by artificial intelligence would not have allowed for high inflation to occur.
FED statements and decisions as outlined by former hedge fund manager Travis Devitt, aka Stockgeek.
We need a world where money is not controlled by an elite. A fixed money supply, such as Bitcoin's maximum limit of 21 million with current inflation below 4%, is a good approach. With the halving in spring 2024, inflation will decrease to below 2 percent. This is a calculable measure that excludes manipulations for redistribution.
However, money supply growth or rather changes in money supply should ideally be linked to the economic performance of a region, specifically the Gross Domestic Product (GDP), as increased production and services create growth, so there can be more money. But if the GDP decreases, the money supply should also be reduced. In that case, there would be no inflation, and we could completely eliminate interest rates!
Because owning money is not an achievement that should be rewarded (with interest) or punished (with wealth tax), but simply a state of being.
Loans would only incur a fee to cover the probability of default (the risk that someone may not be able to repay their loan). Systemic redistribution from the poor to the rich would not be possible. Those who know me are aware that I do not belong to the champagne socialism camp but rather have conservative economic views. However, unlike others, I still have a social conscience.
Decentralized lending protocols that do not charge interest, such as Liquity, already come close to this macroeconomic utopia. Only performance and good investment decisions could increase wealth, rather than money and ownership triggering unearned interest-driven wealth accumulation.
But let's get back to the main topic: The U.S. Federal Reserve (FED) predominantly consists of experts who understand the mechanisms. So, when interest rate hikes are delayed and further rate increases instead of rate cuts are implemented, it is not about appropriate reactions but about implementing monetary policy for foreign objectives. Since central banks also openly admit that both inflation and high interest rates particularly affect the poorer working class, there can be no doubt about their intentions in my opinion.
The only solution we can drive ourselves is to move away from FIAT currencies in bank accounts and utilize cash and cryptocurrencies for our expenses. For investments and store of value, self-financed real estate, gold, equity holdings, and decentralized blockchain-based crypto assets are viable options.
It is a long journey, but we will only reach the goal if we take the first steps.
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