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| Category: Business |
(requires Adobe Reader)
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| About the Book | |
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It’s no secret that banks have a license to print money. Called counterfeiting in days of yore, it’s now termed printing money from thin air. The result is the same: banks debase the money in your pocket and become wealthy in the process. If you believe this activity is harmless, read this book. It quantifies the enormous losses that money printing inflicts on those who save or use money. Banks not only create inflation; they also confiscate society’s productivity gains. They lend them to privileged clients in the form of credit created from thin air. The story begins with the history of money manipulation and how today’s banking cartels have developed it into an art form. Nobody questions them or what they do. They pretend they help wage earners, but money printing increases prices, not wages. Over time, it curtails consumption and deprives people of the resources they need to be productive. The Federal Reserve fixes this deficiency by depressing interest rates, which entice consumers to augment their incomes by borrowing. The policy worsens the plight of consumers and encourages asset speculators to lever their bets. The book demonstrates that manipulation of money and rates harms wage earners and serves nobody but banks. It explains how, by comparison, unperturbed markets foster productivity and prosperity. Money printing creates a steady transfer from those who work for a living to banks and their privileged clients, who protect their wealth from money debasement. Over time, this process creates the income and wealth inequality we see today. This is no baseless indictment. This book tracks and quantifies the fund flows that substantiate these allegations. Money printing has another side effect even worse than causing inequality, stunted productivity, and financial speculation. It creates a tight link between money in circulation, GDP, and existing debt. If banks fail to print enough money, declining incomes jeopardize the servicing of debts. Defaults then destroy money previously printed. This debt-deflation spiral forces banks to keep printing more and more money just to prevent defaults from subverting the economy. It traps banks in a printing frenzy that is neither reversible nor sustainable: eventually they run out of credit worthy borrowers. Lack of borrowing and growth creates a form of debt sclerosis: incomes stagnate; yields and rates approach zero; debts are being rolled over incessantly; financial speculation allows only banks to keep growing. It’s neither a desirable nor a stable condition. To escape the trap, the only recourse is restructuring of debts. The Great Depression is the most recent example of this painful catharsis. The book explores why societies allow banks to repeat the same destructive process time and again when markets distribute resources more equitably without that manipulation. Instead of fragmented verbal argumentation, this book uses mathematics to guarantee overarching consistency. It interprets all equations thoroughly and clearly. Simple algebra allows the reader to follow every topic. The language is precise but simple and avoids expert jargon. Many insights are new, some counterintuitive, and some possibly controversial.
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| About the Author | |
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DELEF GLOGE retired from ATT Bell Laboratories, where he authored fifty papers and received nineteen patents on electronic and internet technology. He was elected a Fellow of various engineering and scientific organizations. One of his books titled The Curse of the Money Machines popularizes the role and history of banks. |