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Nomi Prins joined the Mises Institute together with Jeff Deist where she discussed Prospering in the Age of Artisanal Money and what she views as the threat of central bank power to the financial system.
“She began her discussion highlighting cash and the financial system by stating, “There is an outside group of central bankers… That have not just the ability but the wherewithal and lack of any understanding to decide how much the value of cash is. How much interest you can receive for keeping your cash at a bank – which is nothing. In fact, you actually pay money to banks for the luxury of keeping your money. For example, if you have an account at JPMorgan Chase and have less than $1000 in that account per year, you’re paying $240 a year in order to maintain your money in that account. Ultimately, that is 24% interest that you are paying in order to keep it in a bank – that’s ridiculous but is what has happened in the last ten years.”
Nomi Prins is a bestselling author of All the Presidents’’ Bankers and is currently working on her forthcoming book Artisans of Money, which will explore the coordinated efforts of global central banks since the financial crisis and the application of artisanal money today. Prins’ is a former Managing Director at Goldman Sachs and has worked at various major Wall Street banks before stepping out of the financial world to become an investigative journalist.
“The Federal Reserve has not just been pivotal in making sure that you gain no interest from money that is being kept in a bank, it has also made sure that throughout the world that the phenomenon exists. What that has does is create an artificial financial system that had not existed before the financial crisis.”
“It’s not just the government that is influencing banking policy, it is the private bankers who are directing the policy. Now that we have a renewed sense of power with the central banking system it is adding into that artificial stimulation, artificial subsidization and artificial money which is now our system.”
Nomi Prins then goes into the nexus of how the Federal Reserve came into power and elevated influence its with artisanal money. In her historic explanation she outlines the rise of JPMorgan, Citigroup and other major banks from that era.
She told the crowd at the Mises conference that, “The financial crisis was the beginning of an entirely new financial order. I have labeled them the Artisans of Money because in the last ten years they have manipulated the value of cash, they have manipulated the availability of money to these institutions which has allowed the big banks to continue to speculate. In the wake of the last ten years the Federal Reserve has acquired $4.5 trillion worth of securities, of debt. Since then it has created programs that include quantitative easing, operational quantitative easing and various ways to keep the value of money down and keep “the printing presses going.”
“Mark Carney, who runs the Bank of England, called the practices of quantitative easing an “unconventional measure.” That unconventional measure has created about $20 trillion worth of debt that is sitting on the books of central banks throughout the world and doing absolutely nothing productive for society, for the economy, for small business and for individuals. It has created a system in which the Federal Reserve has required those around the world to behave as it did.”
When posing why the Federal Reserve has been able to get away with such actions in the artisanal money era she pressed, “The reasons that the Federal Reserve has been able to continue this policy is from giving explanations that include the need to promote growth, jobs or fix a problem that is occurring elsewhere in the world. The world has begun to change since following the Fed after the crisis.”
“There has been a shift that has happened since this system has been so artificially pushed by the Federal Reserve. The entire geopolitical system has changed. The entire debt that exists in the world has changed. The global debt to GDP is currently at a multiple of three. That has all happened not because of government policy, not even because of private banks – it completely happened because of the Fed.”
“Global economies have followed because of the cheap manipulations while pushing debt into the future. When and if that future comes, there is a significantly negative element. Whenever that negative reaction arrives it has the ability to detrimentally impact us – and this time not just the banks, stock markets or corporate debt markets. It has the ability to take where we are now, which is much higher than where the first were before, and fall from unprecedented levels.”
When examining outside artisanal money factors from the Federal Reserve she noted, “It is also important to look at the International Monetary Fund’s special drawing rights (SDR) basket of currency that is not just predicated on the dollar but on more security from various currency levels involved. Gold could also be a part of the SDR. When we lost the gold standard in 1971, we basically took outside checks and balances off of the Fed because we took checks and balances off of the dollar. Now there is not external counter to what the Fed can do.”
The bestselling author summarized, “So how do you fight that? I think big banks should be broken up. I think if you made them smaller and less able to take and require this cheap money from the Fed, it would offer less risk. If you made them smaller it would even require less regulation to protect us from them. The banks would have less influence than they have now.”
“There are also ways to look at currency. The entire manipulation of debt, cash and debt impact the dollar. Every time the Fed has moved rates it had an impact on the U.S dollar. Every time the Federal Reserve got G-7 central banks in a room together to push for a policy, they hurt the financial system and created more risk into the future. A lot of that was to protect the U.S dollar, the United States and the Federal Reserve’s overall power.”
“In the meantime what you can do individually is take out cash from these big banks, to have an individual reserve for yourself. All of these banks have a reserve with the Federal Reserve that are not going to you, that are not going into the economy. What you can do is keep some of that for yourself. The other part of this is independent thinking and doing your own research. The information that comes across the news can be viewed somewhat skeptically, which should have us drawn to looking at original sources. What you can do is read across your ideologies, and your politics. What you’ll get is the truth, if you can expand the information you are taking in.”
To catch the full discussion with Nomi Prins on the state of this artisanal money era at the Mises Institute CLICK HERE.
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