Central Banks Fund Civilization’s Collapse – Aided by their supine Governments
Sat 10:15 am +00:00, 21 Mar 2026
Source: https://www.lewrockwell.com/2026/03/george-f-smith/central-banks-fund-civilizations-collapse/
The Federal Reserve, or the Fed, is the central bank of the United States. Ever wonder why we have it? Only a few people care if it’s still around, and they’re the ones who profit from it. In some cases they profit enormously. The average person doesn’t know about central banks and doesn’t care to know. To the ones at the top of the political – economic heap, this is how they want it.
A central bank such as the Fed comes about through political favors — favors to big bankers and to politicians intent on buying votes and making war. Where you find a country with a central bank, you have laws establishing it. A central bank is not a voluntary agreement among bankers. In practice, it is a sophisticated counterfeiting racket backed by the monopoly force of government. Remember, there would be no Fed without the Federal Reserve Act.
Central banks are often described as inflation fighters. As monopoly producers of money, they are instead the sole source of inflation. The Fed’s definition of inflation as “the rate at which the price of goods and services increases over time,” serves as a cover for their crime of targeting (price) inflation at two percent. It’s policy is to ensure the dollar buys less over time since only the naive believe low prices are good. As a monetary thief, the Fed has been a huge success.
Central banks such as the Fed are said to be responsible for making capitalism work. By making honest price discovery impossible and raging war against savers, they are in fact anti-capitalistic. If you want to kill capitalism and replace it with cronyism and instability turn the market over to central bankers. President Woodrow Wilson did, in late 1913. As Keynes expressed it:
Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. . . As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
Almost every textbook that discusses the history of the the Federal Reserve will say it came about as a solution to the various Panics of the 19th century and the Panic of 1907. What the textbooks don’t discuss is why the Panics came about: the common practice of fractional reserve banking. In simplest terms fractional reserve banking consists of a bank giving two people equal claim to the same monetary unit at the same time. How’s that for honesty? It’s standard operating procedure. With the exception of Austrian School economists, it is noncontroversial.
As central banks were called on to play a major role in funding World War I, European belligerents suspended payment in gold — in other words, they outlawed inflation-resistant money. Doing so prolonged the war and resulted in shocking casualty figures.
In the U.S. the public was strongly discouraged from turning in their paper money for the gold it represented, which allowed Fed “monetary policy” to help fund the war. As historian Ralph Raico writes in Great Wars and Great Leaders: A Libertarian Rebuttal,
The First World War is the turning point of the twentieth century. Had the war not occurred, the Prussian Hohenzollerns would most probably have remained heads of Germany, with their panoply of subordinate kings and nobility in charge of the lesser German states. Whatever gains Hitler might have scored in the Reichstag elections, could he have erected his totalitarian, exterminationist dictatorship in the midst of this powerful aristocratic superstructure? Highly unlikely.
In Russia, Lenin’s few thousand Communist revolutionaries confronted the immense Imperial Russian Army, the largest in the world. For Lenin to have any chance to succeed, that great army had first to be pulverized, which is what the Germans did.
So, a twentieth century without the Great War might well have meant a century without Nazis or Communists. Imagine that.
No Great War, (likely) no Nazis or Communists. No central banks, no Great War.
Always, the US can launch a war because the Fed is on stand-by to help fund it, regardless of economic consequences.
Central bank funding inflates the wars themselves — makes them bloodier and longer — as it prints money for the belligerent governments to spend. Central banking makes war obscenely profitable for some. For the millions killed or wounded during WW I — and the vast death and destruction since then — central banking has metaphorically brought the devil himself to earth. And see this.
Central bank money today is not restricted by anything tangible. Individuals can purchase gold or silver coins but the coins are not money proper. Only central bank digits and paper are money in the sense of serving as a widely-accepted medium of exchange. But its acceptance is an outcome of government fiat, not the free market. Where you find fiat money — whether it’s gold, silver, paper, or digits — you have legal tender laws, not a free market.
People don’t care about monetary issues as long as their money buys things. When it doesn’t then they care, but they rarely understand it. They know they’re being cheated because prices continue to rise, but exactly how is a mystery. Even the gold-loving maestro inferred fractional-reserve banking was a legitimate practice, as he describes credit expansion under the government-controlled gold standard:
Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks). But since it is rarely the case that all depositors want to withdraw all their gold at the same time, the banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security of his deposits). [Emphasis mine]
After he became Fed chairman, Greenspan told his audience:
In the two decades following the abandonment of the gold standard in 1933, the consumer price index in the United States nearly doubled. And, in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, had allowed a persistent overissuance of money.
Counterfeiters tend to do that.
As Vera Smith concluded in her book The Rationale of Central Banking (1936),
A central bank is not a natural product of banking development. It is imposed from outside or comes into being as the result of Government favors. This factor is responsible for marked effects on the whole currency and credit structure which brings it into sharp contrast with what would happen under a system of free banking from which Government protection was absent.
Central banks eat away at civilization, and never forget, it’s the State that makes them possible.
