Friday, December 2, 2022

Central Bank Monopoly

Most of us have played the monopoly game at some point, and have won or been bankrupted. It is a game of winner-takes-all and the loser walking away with nothing.

The trick is to acquire ownership of assets and making other players pay to use those assets, thereby moving money into your own hands.

At some point other players need to borrow money to pay their dues which puts them ever closer to losing the game. Players who buy assets may also choose to borrow money, at a calculated risk.

The background player in this game is the bank that supplies the money for the whole exercise and mirrors the role of the central bank in contemporary society.

Right now, the central banks of this world are rapidly increasing interest rates to borrowers, which are a whole bunch of commercial and investment banks, that in turn increase their interest rates payable by the consumers of loans issued by the banks.

The idea is to make it more risky to take out loans for new enterprises to cool down the economy and decrease price inflation.

The victims of this process are those that have large repayable loans and who can literally be forced to move out on the street as their loan repayment amounts increase, leaving them unable to meet their obligations.

So, they become victims of a central bank policy to discourage folks to buy things on credit/get loans, etc. And in the process being forced to use credit to survive in many cases.

This monopoly game in the real world has now become deadly serious for an increasing number of people, and those who have hoarded the assets and are milking the rest for what it is worth may be in for a nasty surprise if the other players decide to flip the monopoly game board upside down.

The basis for a civilized society is agreement on the rules between the players. If that is not present, civilization descends into a free-for-all might-is-right.

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