Six Central Banks of the World Are Destroying Paper Currency

A central bank is an institution that manages a state’s currency, money supply, and interest rates. Central banks also oversee the commercial banking system of their respective countries. Essentially, a central bank is a bank that provides financial and banking services for a country’s government and commercial banking system.

Central banks control the circulation of a country’s currency

Central banks control money supply, interest rates, and inflation through policies like adjusting reserve requirements, open market operations, and changing interest rates. Central banks are responsible for the design, distribution, and circulation of a nation’s banknotes and coins. Many of them participate in foreign exchange markets to influence or peg the value of their domestic currency. Central banks act as a stopgap to prevent bank runs by providing emergency liquidity to commercial banks. They monitor systemic risks and aim to prevent financial crises. Central banks provide banking and financial services like lending, borrowing, and asset management for their national governments.

Central Banks claim to be a better monitor of monetary policy

The idea that central banks could do a better job managing monetary policy than governments originated in the late 17th and early 18th centuries in Europe. Central banking was seen as a way to institute monetary policy that was free from short-term political motives and pressures. Crown heads and elected politicians were seen as more likely to manipulate monetary policy for political gains.

The late 17th century saw the first central bank founded in England

The founding of the Bank of England (1694) and the Banque de France (1800) were early examples of central banks being set up to establish financial stability and manage currency separate from the volatility of political whims. The gold standard helped reinforce discipline and restraint on money creation, building credibility for central banks like De Nederlandsche Bank (1814) and the Reichsbank (1876). The Federal Reserve’s founding in 1913 centralized certain monetary authorities that had previously resided directly with the Treasury or private banks prone to periodic financial crises.

Overall the late 19th and early 20th century saw the major enlightenment, industrialization, and globalization trends solidify thinking that monetary policy was best guided by technocratic central banks—institutions empowered by governments but independent enough to pursue long-run price stability and full employment. This belief persists in most major global central banks’ mandates today. This belief is at the core of what is wrong with the central banking system. The abuse of this privilege is directly causing our currency to be destroyed because of the tremendous loss of buying power. So who are these six major central banks that are at the center of this currency demolition?

The Federal Reserve Bank is the central bank of the United States

The Federal Reserve Bank is the central banking system of the United States. It was established in 1913 with the passage of the Federal Reserve Act, signed into law by President Woodrow Wilson. It is comprised of 12 regional Federal Reserve Banks located around the country with oversight from the national Federal Reserve Board of Governors. This decentralized system tries to balance private regional banking interests with national economic priorities. The Federal Reserve was created to provide stability to the US banking system after several financial panics in the late 19th and early 20th centuries exposed weaknesses in the system at the time. Its main objectives are to promote maximum employment, stable prices, and moderate long-term interest rates in the US economy. It sets key interest rates and conducts monetary policy to meet these macroeconomic objectives.

The Federal Reserve serves critical functions like acting as a bank for the US Government, supervising and regulating banks, maintaining the stability of the financial system, and providing certain financial services to banks, governments, and foreign official institutions. The Federal Reserve is essentially the central bank of the United States, established by Congress in 1913 to have centralized control over US monetary policy, bank supervision/regulation, and help mitigate systemic financial risks. Its structure tries to ensure independence from short-term political pressures.

The European Central Bank (ECB) is the central bank for the Eurozone

The ECB refers to the European Central Bank, which was established in 1998. The ECB is the central bank for the 19 countries in the Eurozone—the member states of the European Union that have adopted the euro as their currency. It was established in 1998 along with the introduction of the Euro, the common currency that replaced previous national currencies like the German Deutsche Mark and French Franc. The ECB is governed by a president and governing council that sets interest rates and monetary policy for the Eurozone with the primary goal of maintaining price stability and the value of the Euro.

Key roles of the ECB include defining and implementing monetary policy for the Eurozone, conducting foreign exchange operations, holding and managing foreign reserves assets, and helping oversee banking/financial system oversight across Eurozone members. The creation of the ECB was a landmark moment in the European integration project, establishing centralized monetary policy and helping coordinate economic growth across EU members. The ECB establishment in 1998 alongside the Euro currency was a major pillar in Europe’s economic and currency integration, giving it similar regional monetary authority that national central banks have within their own countries.

The Bank of Japan Act of 1882 established the Bank of Japan (BOJ)

The Bank of Japan (BOJ) is the central bank of Japan. The Bank of Japan was modeled after the Belgian, French, and German central banks to help modernize Japan’s banking system during the Meiji Restoration period in the late 19th century. It was founded as a joint-stock company in 1882 and opened for business in October of that year, making it one of the oldest central banks in the world. The BOJ’s tasks included managing the nation’s money supply, setting interest rates, controlling currency issuance, facilitating loans to the government, and acting as a lender of last resort.

In 1942, the Bank of Japan Act was rewritten to give the bank greater autonomy and the ability to more directly impact monetary policy aligned with government directives. Post-WWII, the Bank of Japan gained increased independence and policymaking powers after laws in 1942 and later in 1997 defined price stability as the central bank’s primary objective. The Bank of Japan has the third largest central bank balance sheet after the Fed and the ECB.

The Bank of England (BOE) is the world’s 8th oldest central bank

The Bank of England is the United Kingdom’s central bank. It was established in 1694 to act as the English Government’s banker and debt manager. The BOE was founded in 1694 under a Royal Charter from King William III and Queen Mary II. Its original purpose was to raise funds to help rebuild the English navy and manage government debt accrued from warring with France. The Bank of England acted as the government’s banker and bond issuer. It also managed gold reserves and introduced the first standardized banknotes.

Over the centuries, the Bank of England gradually assumed increased responsibilities for monetary policy and bringing stability to the British financial system during crises. It has been fully nationalized since 1946, with independence over monetary policy objectives, including inflation targeting, set by parliament. The BOE remains one of the most influential global central banks today.

The People’s Bank of China unified China’s financial system in 1948

The People’s Bank of China (PBOC) is China’s central bank. It oversees China’s financial system, regulates currency, and implements monetary policy. It is China’s first central bank since the Communist Party took power. Before the PBOC’s founding, China’s financial system was fragmented across provinces without a unified central bank. When the PBOC was established in 1948 it was mainly intended to issue currency, regulate finance, unify banking, and provide economic governance for the country. This helped consolidate control under the Communist Party’s rule.

Over the decades, the PBOC gradually took on more traditional central banking roles now similar to institutions like the US Federal Reserve or European Central Bank. While China calls itself socialist, the PBOC functions in many ways as a major modern central bank—managing monetary policy, interest rates, currency exchanges, and overall financial stability in China. Over seventy-plus years the PBOC has evolved into the powerful central financial authority it represents today.

The Swiss National Bank (SNB) became fully operational in 1907

The Swiss National Bank (SNB) is the central bank of Switzerland. The SNB was formally established in 1907, though its origins trace back to the Swiss Bank Corporation founded in 1852. It was founded after a federal law created the national bank in 1905 to help regulate Switzerland’s monetary policy and currency across semi-independent regional central banks. Before the SNB’s founding, there was no centralized national monetary authority or uniform national currency across Switzerland’s decentralized cantonal banking system.

The newly established Swiss National Bank began fully operating in 1907 with the authority to act as a lender of last resort, establish foreign exchange policy, regulate money supply, and bring uniformity and stability to Swiss banking. It issued Switzerland’s new national currency the Swiss franc as a harmonized banknote system across the country. The SNB is widely regarded as the most stable central bank globally. The Swiss franc’s stability, limited Swiss inflation, and the country’s sustained banking oversight have garnered the SNB an elite reputation for prudence and financial stewardship.

World Central Banks finance global debt which now stands at over $310 trillion

In summary, central banks help finance government debt globally. Central banks engage in quantitative easing programs where they purchase domestic government bonds using money they digitally create. This provides governments with a ready buyer for bonds at lower yields. By keeping interest rates low for extended periods, central banks reduce borrowing costs for governments rolling over existing debt or taking on new debt. Central banks create market bubbles by monetary expansion and then burst bubbles by monetary contraction. Central banks today are not limited by a gold standard. Unlimited money and debt are being created and there is a belief that this behavior will not have drastic ramifications. That belief is wrong.

Central banks create inflation which is in essence the devaluation of our paper currency. Central banks have overstepped their original boundaries and charters. The enormous global debt and currency devaluation is a direct result of what our central bankers and politicians have done. We can thank the global central bankers and our government politicians for the currency devaluation we continue to see and the global debt crisis that is on the way. The is no amount of printed money or new debt that can stop what is on the way for our US dollar better known as the Federal Reserve Note. The recklessness and corruption of governments and central banks have put the entire global financial system at risk.

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