Today I launched my essay about the biggest scam in human history, which is the Central Bank buying of corporate bonds. The essay is available on the P2P Foundation website. I am delighted a promoter of radically democratic economic alternatives published the essay, as the scale of the ‘Quantitative Sleazing’ scam is an indicator of how it is hopeless to attempt reform of the monetary system. The multi-millionaires and their relatives in charge of the relevant financial institutions will continue to risk the collapse of monetary systems while enriching themselves and making us poorer through high inflation. You can read the full essay Responding to Inflation From a Pandemic of Quantitative Sleazing – P2P Foundation or browse below the twitter thread I produced to summarise some of the issues arising.
[Search for more or Subscribe]
Don’t blame #Putin or #Covid for your sky-high grocery bill. Blame the elites who collude with the biggest scam in history, involving #CentralBanks and their friends in finance, under the cover of the pandemic. A thread on #QuantitativeSleazing…
Since the start of the pandemic in March 2020, #CentralBanks in the West began pouring trillions into the coffers of large corporations, making their #stockmarket friends rich while making us poorer through high inflation: #QuantitativeSleazing
#CentralBanks should not favour one business over another by giving them easy loans. Helping large & dirty corporations outcompete smaller firms is anti-business, anti-markets, anti-democratic & anti-sustainability. Such #QuantitativeSleazing makes mockery of green promises
By choosing the world’s largest asset manager to manage its buying of #CorporateBonds, The #USFed pumped up the shares of #Blackrock’s investments. Imagine the bullies taking over the school sweet shop and handing the sweets to their friends. But worse, it affects what we can afford to eat.
In my #TEDx talk 10 years ago I said the monetary system is violent to ourselves & nature, so must be reformed, disrupted or escaped. I mentioned #Bitcoin & warned of Facebook issuing a currency to take power. A decade on I discovered it is a lot worse
The whitepaper for #Bitcoin first appeared in the world via the @P2P_Foundation. Did #Satoshi conclude that monetary reform is impossible & disruptive innovation essential? It’s why I publish my essay on #QuantitativeSleazing on their wiki.
Remember when the Left stood up for collective worker needs & the Right stood up for small business? Both are screwed by the pandemic #QuantitativeSleazing scam from Central Banks, yet neither Left or Right responded. Have they?
The power of unaccountable & impoverishing alliances between the state & the largest corporations has a definition in political theory. In what ways is corporate bond buying by Central Banks not a technocratic #FinancialFascism?
For the last 2 years, economics journalists did not warn us how Central Banks have been dishing out cash to large firms, distorting markets & making us poorer. What does that show us about them?
Our problem with mass media & bigtech is not that they are owned by one billionaire who is from a dodgy country or who has one industrial sector interest. Key is that they are all owned & sponsored by people & institutions benefitting from the biggest scam in history – #QuantitativeSleazing
Ineffective critics have asked for more transparency, or for less QE to go to fossil fuel companies. For 2 years they haven’t been shouting the alarm, or resisting with legal action, political pressure, or even direct action. But we still could.
“The Chief Economist of the World Bank illogically puts the blame for inflation on non-monetary policy causes, such as oil prices, while at the same time calling on Central Banks to tackle inflation as if it had a monetary cause. That is tantamount to calling on the mugger to nurse the wounded”
Beyond inflation, you can read about the wider damage caused by corporate bond buying by Central Banks, under the cover of the pandemic, in my essay on the #P2PFoundation
What to do? Don’t be distracted by #ConspiracyTheorists pushing our concern & righteous anger into a dead-end of impotent stress. The current system & its officials are the enemy, not vague ideas on future #CBDC/UBI. The latter is entertaining irrelevance
There is much we can do now. I list 10 action points & conclude: forward this essay to the producers of contrarian analysis on social media, such as Chris Martensen, Dark Horse Podcast, Russell Brand, Rebel Wisdom, Joe Rogan, Empire Files, and Unherd Lockdown TV.
End of the thread.
Retweet any of these via the first in the thread.
Read the essay, including those things you can do: Responding to Inflation From a Pandemic of Quantitative Sleazing – P2P Foundation
Addendum 27th March 2022
After my essay came out on P2PFoundation I was sent an essay by Dr Fabio Vighi of Cardiff University that addresses the same topic. He goes much further than I do, to argue that the financial mess caused and patched up by Central Bank corporate bond buying was the original reason for the pandemic policy of lockdowns. Importantly he identifies an August 2019 BIS working paper and Blackrock paper that both made recommendations to Central Banks to ‘go direct’ in delivering money into the economy. Crucially the BIS argued that central bank lending “can replace commercial banks in providing loans to firms” and Blackrock argued “An unprecedented response is needed when monetary policy is exhausted and fiscal policy alone is not enough. That response will likely involve ‘going direct’”: “finding ways to get central bank money directly in the hands of public and private sector spenders.” These influential opinions help to explain why the ECB, Fed and BoE were so fast at the start of the pandemic to launch corporate bond buying at the start of the pandemic. For instance, the ECB announced its entirely novel corporate bond buying on March 18th 2020, the day after the lockdown came into force in France and 2 days after the President announced it. Given that there had been no prior example of pandemic lockdowns in the Western world, and that lockdowns were not the official policy tool of either Western governments, nor were they recommended by the WHO’s International Health Regulation as responses to pandemics, there was no possibility that Central Bankers had substantial anticipation of lockdowns or the time to model their economic effects, design new policy interventions and then model the effects of those. Not unless there was a conspiracy, as Dr Vighi suggests, or a set of policies the Central Banks were planning to do in any case, where they used the lockdown announcements as the opportunity to launch them. Even without concluding a conspiracy, the timing proves that Central Banks were not simply responding to a crisis and already had these policy measures ready. That alone suggests they are working in an unaccountable and undemocratic way that implements the interests of the largest financial institutions of the world to the detriment of every business that is not large enough to benefit from Quantitative Sleaze and every citizen who does not work in finance.
Two aspects of Dr Vighi’s analysis of the economics I disagree with. The Autumn 2019 Quantitative Easing was of the previous variety and did not represent ‘going direct’ in the way that corporate bond buying enables, which started in March 2020. Therefore, it is not possible to conclude Autumn 2019 monetary policies demonstrated anticipation of the pandemic policy responses. Second, Dr Vighi’s argument that lockdowns were necessary to avoid hyperinflation from the corporate bond buying programme appears problematic to me. First, the lockdowns would only be temporary, and therefore not stop inflation for long. Second, the lockdowns involved people and corporations receiving payments from government to maintain employment, incomes and purchasing power, while the desire and ability to consume declined, therefore creating an imbalance between spending power and available products and services – conditions ripe for inflation. Monetary economists will be producing papers for the coming years on the role of lockdowns on all aspects of economics, including inflation, and some might conclude Dr Vighi is correct in the initial anti-inflationary effect. However, the effect would only be short term, if at all.
In addition, I was sent this video (below) from Roger Hamilton on Blackrock’s Aladdin system for the analysis of financial assets/instruments and the execution of trades. The video describes the package of AI algorithms that comprise the Aladdin platform as a ‘robot’, which adds to the dramatic effect. On reflection, it is correct to do so, because it helps us understand how the Aladdin system is being permitted to become a force-unto-itself, driven by the profit maximisation aims of its programmers. What Aladdin enables is a vast reach of calculation and decision making that would be impossible by human analysts and traders. Therefore, it can shape markets, not just respond to them. In addition, other financial institutions can gain access to its information streams and calculations in ways that would not be possible for human analysts and traders, thereby influencing the market even more. Personifying Aladdin, as this video does, also helps us to understand how the financial and real economies of the world, and therefore our own lives, are now being shaped by decisions made by computer code that seeks to extract value from each of us. Might Aladdin’s algorithms punish companies that do not join the rush towards rising prices and cutting wages? Although the situation is bad enough already, I wonder what could happen if Blackrock/Aladdin work with enterprises that seek to influence market sentiments, and market directions, to further maximise its profits.
I wonder if anyone in any political party anywhere in the world has got any substantive analysis and proposals on what to do about this situation. I wonder what happened to Occupy Wall Street. I wonder if the folks at Anonymous have heard of Blackrock and Aladdin.
Comments welcome below.
1 thought on “Don’t blame Putin or Covid for your sky-high grocery bill”
Read the article today, Jem. Thanks for such a detailed and lucid explanation of the current global financial problem. The gathering storm reminds me, all too much, of the runnup to 2008 GFC. Also, heartily agree with your recommendation about crypto-currency. I will post appropriate comments and link at FB and urge others to take note of your analysis.