Central banking, along with fractional reserve banking — two inseparable evils of monetary policies — have been distorting market price signals for the last 50 years.
In 1971, the Nixon Shock corrupted the global monetary system by fracturing the final linkage between gold and the U.S. dollar. Fiat currencies were unleashed, issued and managed by central banks. Over the years, delusional interventionism enabled by politicized narratives to serve a middle class convinced into believing central manipulation is in their best interest, has brought fiat currencies’ purchasing power to its knees.
Today, savers are penalized, while speculators and spenders are rewarded. This tendency to be punished by lowering one’s time preference feels alienating to many. It just doesn’t feel right. Yet, few are capable of putting a finger on why that is, including banking professionals and money managers whose salaries depend on not understanding it.