The framers of monetary policy are the sellers of your monetary freedom. This article is a sidequel of Monstrous Policy.
To believe that the central bank creates monetary freedom is like observing fire creates the woods. Central bank is an institution that manages a state’s currency, money supply, and interest rates. Central bank possesses a monopoly on increasing the amount of money in the nation, and usually also prints the national currencywhich usually serves as the nation’s legal tender.Praxeologically speaking, I am asserting that the central banks do not only enjoy the monopoly over money-supply but also inflate the economy to facilitate the principles of imposed order. This process of facilitation begets a society of statism and impudently abhors the potency of methodological individualism. Methodological individualism (MI) is the view that social phenomena can only be understood by examining how they result from the motivations and actions of individual agents, whereas statism is the belief that the state should control either economic or social policy, or both, to some degree. Statism is effectively the opposite of free marketism. As a methodological individualist, I am confident to diagnose that the central banks vociferously suffer from apoplithorismosphobia (fear of deflation) and they are highly responsible for lynching the beauty of catallaxy. Catallaxy is an alternative expression for the word “economy”. Whereas the word economy suggests that people in a community possess a common and congruent set of values and goals, catallaxy suggests that the emergent properties of a market (prices, division of labor, growth, etc.) are the outgrowths of the diverse and disparate goals of the individuals in a community.These central bankers masquerade disinflationism, through their so-called contractionary monetary policy, but are legally infringing upon the subjective theory of monetary value. Many people are unable to realize this real lie with their real eyes, because they have been inured to uncritically accept the monetary measures.
Monetary policy is a very twisting and sweetening economical term, in the pragmatism of banking. Bankers may have succeeded to masquerade wisely, but the honeymoon is costliest in the long-term. Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as increasing the interest rate, or changing the amount of money banks need to keep in the vault (bank reserves), whereas mondustrial policy (a fusion of “monetary policy” and “industrial policy) describes the Fed’s creation of new money during the 2008-2009 financial crisis in order to rescue certain firms, such as Bear Stearns and AIG, and certain markets, such as commercial paper and money-market mutual funds, at the expense of others, by purchasing securities and making loans. It is a recent term contemporarily coined by John Taylor, a Stanford economics professor, former Bush administration treasury undersecretary and developer of the Taylor Rule to guide interest-rate policy. The term describes the Fed’s management under Ben Bernanke’s leadership of the 2008-2009 financial crises, which Taylor views as excessively interventionist. Taylor was also concerned about the future effects of this policy.
This term can also be applied into other economies than USA, irrespective of the status of the economic system. As long as the central banks continue to pagan over the monopolization of money-supply, the financial society of any nation-state will drift away from the beauty of market-based financing. Moreover, Tony James has rightly pointed out the intelligence of market based financing in an article, published by Wall Street Journal, dated March 3, 2014:
And, generally speaking, Keynesian economists and Monetary economists (Chicago school of economics) are “deliberately unconscious” (rational ignorance) of the Austrian school of economics. To elaborate “monetary policy + mondustrial policy = monstrous policy”, I believe that it would be a serious blunder to neglect the fact that monetary inflation birthed by the monetary policy also generates forces which tend toward capital consumption. One of its consequences mainly through mondustrial policy is that it falsifies economic calculation, banking and accounting, thus, producing the phenomenon of illusory and high interest rates. These all beget a monstrous society driven by the animal spirit of the government and central bank(s). To my knowledge, I am ultimately certain that this antagonist of crypto-currency (monstrous policy) is also a form of taxation (legal robbery) without legislation.
In the above chart, I ratiocinate that it does not matter which political party is in power. The rapid expansion of total money supply will continue, due to the existence of central banking and fractional reserve system in India. Therefore, in the long-term, “we are all dead”. The given below chart elaborates that the praxi-interventionism of rational ignorance through political voting and RBI’s monstrous policy have impudently debased the Indian rupee. It is advisable to all the aurophobic central bankers to go back home and read Theory of Money and Credit by Ludwig von Mises. Banking economics is not something to master in college, so think otherwise in the pretense of knowledge.
Conclusively speaking, I strongly feel that banking economics recommends neither inflationary nor deflationary policy. It does not urge the governments to tamper with the market’s choice of a medium of exchange. It establishes only the following truths:
1) By committing itself to an inflationary or deflationary policy, the monstrous policy does not promote the public welfare, the commonweal, or the interests of the whole nation. It merely favors one or several groups of the population at the expense of other groups. Example: Bailing out Air India, United Bank of India, etc.
2) It is impossible to know in advance which group will be favored by a definite inflationary or deflationary measure and to what extent. These effects depend on the whole complex of the market data involved. They also depend largely on the speed of the inflationary or deflationary movements and may be completely reversed with the progress of these movements,
3) At any rate, a monstrous expansion results in malinvestment of capital and overconsumption. It leaves the nation as a whole poorer, not richer. Example: Real estate sector.
4) Continued inflation must finally end in the crack-up boom, the complete breakdown of the currency system. Example: Currency wars.
5) Deflationary policy is costly for the treasury and unpopular with the masses. But inflationary policy is a boon for the treasury and very popular with the ignorant. Practically, the danger of deflation is but slight and the danger of inflation tremendous.