Imagining a Universe Without Central Banks
The God Particle has been discovered!
Yesterday, the saints at central banks in China, Europe and the UK said they would perform what could only be a miracle. The world economy wheezes, rattles and shakes because it has been poisoned by too much debt. The central bankers offer a cure — more debt!
“Central banks take action,” is the headline in today’s Financial Times. “Moves to stimulate global economy,” the FT described them.
But what really got our attention was the ‘god particle’ story. Without it, say the scientists who tracked it down, we wouldn’t exist.
Of course, you could say that about a lot of things. Without air, we wouldn’t exist. Or water. Or sunlight.
Could we exist without Homeland Security? Without Twitter? Without rap music?
Apparently so. We did…for many thousands of years. Happily.
Could we exist without a central bank? Many people would reply ‘no’…
Some would say so because they are ignorant. Others would say so because they are just stupid. But any sensible person would admit that human life could exist without a central bank.
The US had no central bank before 1913. It had higher rates of GDP growth back then. It had a stronger currency too — the dollar of 1913 was worth about the same as a dollar of one hundred years earlier. Now, it’s worth about 3 cents…and disappearing fast. On the surface of the argument, it would appear that America’s central bank has actually made things worse. Maybe that is a coincidence; post hoc ergo propter hoc…and all that. But maybe there is a cause and effect relationship. Maybe a central bank CAUSES the economy to produce less wealth…and CAUSES the currency to lose value.
But central bank apologists insist that times have changed. Modern economies can’t exist without them, they claim.
Maybe. All we can say for sure, without benefit of a giant particle collider, or a know-it-all economist, is that the Fed is not the same as the God Particle; the former is a fairly recent innovation…but the latter has always been with us.
The Higgs-Boson particle is very small. And very short-lived. No one has ever actually seen it. However, the scientists who get paid to do this sort of thing assure us that it is a big deal, despite what The Financial Times may think. The FT put the ‘god particle’ below the Libor story yesterday, which perhaps shows that the paper has its priorities wrong…or that finance now IS actually more important than God.
According to the reports, Higgs-Boson is the thing that gives mass to other things. For us, this just raises more questions than it answers. It does not explain why other things need mass…nor why they didn’t have it in the past…nor where Higgs-Boson got it…nor what the recipients plan to do with it. The giving of mass, again…we suppose…based on what we read in the paper…and our experience of actually going to mass in the Catholic church…is what makes the particle godlike.
Which merely deepens the mystery for us. God himself would not seem to require mass. He is not like a block of wood, after all. He is more a part of the spirit world…which sounds a bit like the world Higgs-Boson inhabits.
And while we accept that He can do what he wants, we also feel justified in assuming that He’s not out to get us with some nasty trick…or merely looking out for NUMERO UNO.
Which makes this very different from the Libor story or the central bank story. In the Libor scandal we found Barclay’s bank insiders setting interest rates to suit themselves…rather than letting willing buyers and sellers set rates for themselves. This is, of course, more or less what we’d expected them to be up to…manipulating interest rates, lower, for their own benefit. Both the Chairman of Barclay’s and its chief executive have been forced out as a result.
But wait…isn’t manipulating interest rates lower exactly the subject of the central bank story too? The BoE, the BoC and the ECB are pushing down rates, just like the Barclay boys. They think they have the right. They say it will help stimulate growth.
Could the universe still exist without these interest rate manipulators? We don’t know; but we’d like to find out!
Regards,
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