How Central Banks Broke Money with Matthew Mežinskis - WBD702

Matthew Mežinskis is the creator of the Crypto Voices
podcast and Porkopolis Economics website. In this
interview, we discuss the concept of base money, a
comparison of global currency valuations (including
Bitcoin), COVID-19’s impact on the monetary base,
limitations of the current monetary system, government
debt, inflation, political problems, and the need for
change.


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There are quite rightly real concerns over the societal
implications of Central Bank Digital Currencies
particularly in relation to the capacity it will give
governments to erode democratic principles. However, there
are already serious concerns regarding the existing system.
The transmission of monetary policy, that is, the impact of
central bank policy decisions on the economy, is
significant. And yet, these policy decisions are done
behind closed doors.


Around two-thirds of the United States’ monetary base is
digital: equating to 20 trillion dollars. Central banks add
and remove trillions of dollars from the monetary system
through keystrokes and computer strokes, increasing and
reducing the bank reserves by increasingly eye-watering
amounts. The latest changes have removed material liquidity
from the banking system. This has caused interest rates to
rise, which has resulted in banking collapses and a cost of
living crisis.


Some are calling for central banks to be abolished, such as
Javier Milei, the libertarian candidate leading
Argentinia’s presidential polls. However, central banks are
closely entwined to the global economy; there is no easy
way to surgically remove them without causing collateral
damage to the real economy. Yet, if central banks continue
on their current path there will be more currency collapses
and a concentration of value in a narrowing set of global
currencies.


The monetary system is therefore becoming a cartel
controlled by a small elite who are benefiting from this
situation whilst the majority suffer. There is growing
dissatisfaction with this situation and a desire for change
among the general population. Bitcoin can play a role in
such a change: it both offers a more efficient and less
restrictive alternative, but also, educates people as to
the nature of the problem with a centralized monetary
system.





Show notes:
https://www.whatbitcoindid.com/podcast/how-central-banks-broke-money


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