The years of recovery from the global financial crisis are characterized by the phenomenon of negative effects that point to the detrimentalities of the overall concept on which the monetary policy of the leading central banks in the world is based, with the European Central Bank leading in flaws.
All the shortcomings of the ECB’s movements are noticeable in their results and under the mask of public goods funding, public money instead of funding public goods is diverted to corporate giants, with particular reference to certain industries where the level of risk is extremely high, whose costs grow exponentially, and whose earnings reinforce the position of these lobbies in the creation of public policies of EU member states in partnership with their governments that hire them to carry out public projects.
In the history of the economy, there are innumerable examples of exploiting the poor for the needs of the rich, and now it is systemically, strategically and with the institutional help of the common central bank for countries. As it has been the case ever since the money began to dominate human beings, the story is being based on the belief that bad money is supposed to be transformed into good money, where the bad one is private money, acquired by exploiting the weak and the poor, and it is being fictiously transformed in good public money. In the eye of taxpayers this creates the image how the private money is purified when it is taken by the authorities and becomes public money distributed by the government.
In these circumstances public money is without doubt good since it is being spent in order to finance the common interest. The minds of the people are guided by this myth and it is actually the one of the most rewarding undermining of our power to understand how money circles. In the eye of citizens private money is perceived as dirty result of dishonest actions, while the public money relieves, as, according to what governments are trying to explain, it creates more wealth than private money.
The whole theory is based on the idea that the return on the investment made by the state will be higher than that of private persons, adding that the state can do it by borrowing instead of violently exploiting its taxpayers, basing it on the hope that its return on investment will always be positive. The image of private sector is completely different, starting from the fact that the ideas of an entrepreneur are always being described as selfish, as well as that any business may go bankrupt and therefore the return on those investment may be negative.
The current situation in the Eurozone shows how a change in public expenditure and the consequent change in total income is being used to falsely justify each and every stimulus policy financed by the loan. This is also one of the most harmful misinterpretations of the overall benefits of the increase of the level of consumption, since the money that is supposed to be spent is actually created from nothing, borrowed or redistributed creating drawback on some other budget item, which results in the creation of economic depression and an increase in unemployment. The key problem is the decision to keep Quantitative Easing program unchanged, despite strong growth data in Eurozone countries.
The ECB still injects 60 billion euros monthly into the markets to maintain interest rates low, destroying any anticipation of achieving visible return in the years to come. Besides that the banking crisis is still menacing, while the level of indecisiveness is too high and the European system is far from being restored. Considering the situation on the markets, it is very obvious how companies listed there are now too big and too incoherent for their shareholders to be really concerned in decision-making, so a huge stock market bubble has formed.
Also, big capital gains are no longer on the stock market where central banks inject thousands of billions to boost prices, but before the IPO and even property in private equity transactions. This increases the wealth of the insiders whose money shattered by venture capital is increasing significantly over the past five years, explaining how QE program actually enriches a narrow circle of the powerful elite, leaving the rest of the population deeply in debt. Therefore, the monetary system is currently being based on free credit and literally forcing the citizens to use those credits is actually the crime against humanity.
Thanks to the QE program of the ECB the mass of credit is used to protect the system from bankruptcy, where the weakest link is the banking sector with dubious debts. When this is being combined with multinational corporations that are working on harmful projects supported by the governments, i.e. financed by the public money and the costly social spending in almost half of the Eurozone countries it is not hard to the imagine how hard the situation will be by the end of this decade.
What should be kept in mind is the logical fact that the debt cannot be unlimited since the remuneration capacities of people are limited and since their ability to work fades over time. If the ECB continues to base its activities on an infinite debt, the European population will be enslaved by their credits, and creating any type of slavery that is contrary to human rights means being involved in committing a new kind of crime against humanity.
The proces of making decisions in the ECB is oftenly perceived as a democratic, though it will not change an inconsistent monetary and financial system because of its lack of the regulation and being in command of the price of credit by the authorities will end in devastation. In a system as such under the ECB the member states do not have to have power over the currency, the price of credit, or the control of the economy, while at the same time its goal is to protect human rights of its citizens.
National central banks under the system of the ECB are percieved as more self-directed, while in practice, this autonomy is completely fabricated. Their decisions are essentially made in the interests of governments. By artificially lowering interest rates, central banks smooth the progress of public debt and by financing commercial banks lending to their governments, they pledge to the latter an almost unlimited source of income, despite their already oversize debt. Despite the changes that occur during this process and despite how much growth occurs, this progress is pervasive, since the only long-term outcome of this policy is the creation of debt slavery.
This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018