Gold Buys Protection Against Central Banks
Central Bank Head Busted for Corruption
The head of the National Bank of Ukraine (NBU) is facing an investigation for abusing power and misusing her office.
Governor Valeriya Gontareva has been the head of the Ukrainian central bank since June of this year.
She is accused of manipulating the local currency, having executed major transactions on the foreign exchange market by buying and selling dollars using the Ukrainian currency.
A Kiev-based court has directed prosecutors to file charges against Gontareva.
From an American point of view, perhaps it is refreshing to see a person in high power being held responsible for possible corruption. But it is hard to know the circumstances here, and we can’t rule out the fact that she is being brought down for political purposes.
This story comes on the heels of another story claiming the NBU gave up most of the gold in its possession.
The U.S. Government’s Involvement
The U.S. government has basically been calling the shots in Ukraine since the democratically elected president was overthrown earlier this year.
U.S. officials incited the overthrow, and we have to believe they are the ones making the key decisions in Kiev.
Perhaps it wasn’t enough for the Obama administration to appoint the first woman to chair the Federal Reserve in the U.S. It also had to make sure Ukraine got its first female central banker. More important than gender, it always has to find someone who will go along with the Establishment.
The removal of most of the gold from Ukraine’s vaults was likely dictated by U.S. officials. Just the same, these currency trades made by Gontareva were probably at the direction of the U.S.
It would not be difficult for the U.S. government to buy itself some allies. It does it almost everywhere else in the world. The U.S. government can supply weapons and money and can therefore call the shots, at least to those who are being paid off.
In the case of Ukraine, it is a war-torn country that is deeply impoverished. Because of this, it probably wouldn't be difficult to buy off the entire Ukrainian government that was probably handpicked by the U.S. anyway.
When the people of Crimea voted to secede from Ukraine and join Russia, it certainly stirred up a lot of controversy. But those recognized that most of the people there did not want to be part of Ukraine mostly thought it was because they shared the Russian culture.
While this is true, we also have to look at the economic side of things. Ukraine is an extremely poor country. It makes Russia look like a land of great prosperity.
If I were living in Ukraine, I would prefer to be part of Russia, too. Who doesn’t want a much higher standard of living?
Regardless of U.S. involvement, if these charges against Gontareva are true, we shouldn’t be at all surprised by them. If anything, the only surprise is that she is being held accountable.
Central banks are a creation of government. They are granted monopoly powers over a country’s money supply, and they are the most powerful entities anywhere, economically speaking.
Central bankers will naturally want to exert power, and sometimes that power will be severely abused. In the case of Ukraine, a war-torn and impoverished country, the conditions are that much more ripe for corruption and abuse of power.
Of course, I must point out the obvious: that central banks are far more dangerous and damaging than what the central bank of Ukraine is being accused of.
Gontareva is being accused of manipulating the currency, but that is mostly what central bankers do.
She is being accused of favoring certain special interests, but that is also what central bankers do.
Central banks exist for two main reasons: to act as a backstop for the big banks and to buy government debt.
If Gontareva is guilty of crimes in Ukraine, then we certainly have to believe Bernanke was even guiltier in 2008 and 2009 when he bailed out major financial institutions and car companies.
And if central bankers are going to get into trouble for currency manipulation, then what about the Fed increasing the monetary base by a multiple of five over the last six years?
What about manipulating interest rates and paying interest on bank reserves?
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Calling Janet Yellen
Perhaps Janet Yellen should come out and show support for her fellow central banker. Maybe Obama should come out and defend her, since his administration was so pivotal in setting up the new Ukrainian government.
Gontareva may have just been following U.S. orders, so we can be sure she will be taken care of by U.S. officials, unless she was defying them in some way we don’t know about.
Can we ever look forward to a day when a U.S. court will bring charges against Janet Yellen or any other member of the Fed for currency manipulation and doling out favors to special interests?
If this court in Kiev is serious about bringing these charges of currency manipulation and favoritism, then there is only one solution: They must abandon central banking and turn to the free market.
It is hard to believe, but the Federal Reserve has only existed for 100 years. The U.S. has a longer history of not having a central bank than of having one.
While there was not a total free market in money or a pure gold standard prior to the Fed’s start in 1913, the economic booms and busts were less wild then.
It has been under the Fed that we have had the Great Depression and the Great Recession of 2008. Fed members could be guilty of all kinds of crimes and corruption, but there is no way any of that could do more harm than the damage done by all the artificial money creation and interest rate manipulation.
If Janet Yellen decided to embezzle $100 million for herself and her family and decided to do nothing else as head of the Fed, then we would all be better off. The same goes for the argument that we should pay politicians $10 million per year each to sit on their hands and do nothing. It would be a drop in the bucket compared to what they spend to “help” us.
But since none of that is going to happen, and since the Fed is going to start creating money out of thin air again, it doesn’t matter whether it is called corruption or not.
What does matter is whether you buy gold and silver to protect yourself from central bank inflation, which is almost certain to continue as long as a central bank exists.
Until next time,
Geoffrey Pike for Wealth Daily
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