The great reset: Central banks or commercial banks?

Those talking of a great reset assume that it will be driven by governments and not markets. But if past failures are to be eliminated, what is the future of banking?

Surely, it is now apparent that central banks are guilty of mismanaging the economy. By slashing interest rates to zero and in some cases to an unnatural minus figure; then flooding financial systems with currency-level credit, followed by rapidly increasing interest rates in an attempt to stem the consequences central banks have bankrupted themselves and much of their entire economies.

Even though hapless economists and money managers are still in thrall to them, central banks have proved themselves to be unfit for their purpose. It is time for a new system based on true productive economic demand for credit without state interference. It is time to consider central banking versus free banking, given that with their losses on quantitative easing central banks are trading while insolvent — a criminal offence in the private sector for which directors would risk being jailed.

This article compares free banking under gold standards without central banks, and today’s fiat currency system which gives central banks the power of debasement. Commercial banking without central banks is the historical norm, and the evils of statist currency management is a more recent development.