The Purpose of Central Banks
💬 We must now either wake up or go mad, and be enslaved by our delusions.
People are confused about the purpose of central banks. Since one of my ancestors created the world’s first “Central Bank” for the Kingdom of Prussia during The Seven Years War, it is perhaps oddly fitting that I am the one to tell you: The purpose of all Central Banks is commodity rigging.
The very first Central Bank was created to restrict the amount of coffee being imported into Prussia. At the time, coffee was an exotic and costly import. Like champagne, which appeared on international markets at about the same time, people weren’t quite sure what it was good for, or if it was good for anything at all.
King Frederick the Great took a dim view of Prussian gold being drained out of his country’s economy to buy coffee beans, and so, needed a means to restrict imports. He established the first Central Bank in world history to do this simple task: restrict the importation of coffee beans to Prussia.
Oh, and make a profit doing so. — They didn’t call him “the Great” for nothing, but it was my unassuming ancestor who figured out the nuts and bolts and institutional bureaucracy to implement these goals: a Central Bank to control commodities — all commodities, not just coffee.
The entire economy of a country could be controlled by one Central Bank. This discovery was to have world-spanning consequences. For one thing, it meant the death of free markets and the rise of “regulated currencies”, because the most important commodities of all, money and credit, could be controlled by a Central Bank, right along with sow bellies and coffee.
