Bailing out Central Banks

"The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation."

- Vladimir Lenin

Marxists hate the middle class, which they call the bourgeoisie among themselves. The main reason for this is that the existence of a middle class is proof that Marxism is based on a false premise. We aren't all either suppressed or suppressors. Some of us both own the means of production and engage in commerce at a practical level.

The middle class is both labour and capital at the same time. They will remain passive in a struggle between the two, and they must therefore be eliminated so that we can get a nicely divided society that can bring forth a revolution.

An important tool in this endeavour is the creation of a central bank, and Vladimir Lenin was a great proponent of this progressive institution. He saw clearly how it could be used to create a small class of super-rich individuals with everybody else but state functionaries, poor and dispossessed.

Central banks function as a legally sanctioned counterfeiting outfits. They create cheap credit out of nothing, which they hand over to the state and the well connected. The bureaucracy can in this way grow without the constraint that sound money would entail, and the well connected get their hands on cheap credit that they use to buy up assets from the less well connected middle class.

We get a class of super-rich investors, and a large bureaucracy of state functionaries that replace the middle class. This is how we got to where we are at the moment. However, things are going to get worse.

Decades of cheap credit has resulted in losses on central banks' balance sheets. They bought bonds and other interest bearing assets in order to suppress interest rates. Now that interest rates are higher, these assets are less worth. The assets held by central banks are less than the credit they created, which means that there's a lot of money sloshing around that isn't anchored in anything of value.

This will lead to massive out of control price inflation if not rectified, so the bureaucracy has come up with a plan. They will bail out the central banks with tax money. Fake money given to the super-rich is going to be replaced with real money taken from the middle class, precisely as Lenin predicted a hundred years ago.

Vladimir Lenin

By Pavel Semyonovich Zhukov (1870-1942) - [1], Public Domain, Link