Why Do We Trust People Who Don’t Even Trust Each Other?

Have you ever stopped to reflect on the fact that powerful people need our trust, to accomplish their purposes?

Politicians, and elite bankers, both spring to mind.

Last week I critiqued a speech by one of the world’s most powerful central bankers titled “Rebuilding Trust In Global Banking”.  A primary concern for central bankers, is to rebuild public con-fidence in them, and in their system:

The real economy relies on the financial system. And the financial system depends on trust.

… most fundamentally, there has been a significant loss of trust by the general public in the financial system.

Without our continued trust – or at the least, our meek complicity – people who do the wrong thing, who benefit themselves at the expense of harming others, could not continue getting away with doing the things they do.

So, have you ever stopped to reflect on why we continue to trust people, who clearly do not even trust each other?

From the Daily Bell (emphasis added):

The New Era In Gold Repatriation Will Affect Everything

Mexico to audit its gold holdings at the Bank of England … The Mexican Government Audit Office has issued an official statement, criticizing the Bank of Mexico for not auditing the gold it has supposedly bought and stored at the Bank of England. The auditors ask the Central Bank of Mexico to “make a physical inspection with the counterparty that has the gold under its custody, in order to be able to verify and validate its physical wholeness and compliance with the terms and conditions of dealing with this asset.” – Voice of Russia

…

The move toward auditing gold holdings is getting more pronounced as we can see from this demand by Mexico in the above article excerpt. German officials have asked the US government for gold repatriation and so has Venezuela. Now it’s Mexico’s turn to start the process.

The old era in which central banking trust was ingrained in the system is gone now – and the ramifications are many even though they have not yet been felt. Central banks and bankers rely on joint programs and coordinated currency approaches. Without trust, strategies are difficult to create and programs are hard to implement.

This is not a hypothetical observation. As gold prices have moved up and Western currencies have looked increasingly subject to a currency competition, the pressure on politicians to assure gold reserves has increased. Couple this with the overseas storage of much gold reserves, and the situation becomes combustible.

In the case of Mexico, questions have been raised about the country’s off-shore storage of precious metals and its ability to take possession if necessary. These concerns have been magnified by Germany’s experience. Germany’s Bundesbank intends to repatriate a large portion of gold reserves abroad and by 2020 seeks to have at least 50 percent of its total gold reserves at home.

This amount includes 300 tons from the Federal Reserve – which the US Fed may or may not have available. It is unclear, as the Fed refused to submit to an audit of Germany’s gold.

…

Bill Gross, the Chief Investment Officer of PIMCO (the world’s largest bond fund) has recently said that “Central banks distrust each other”. The pending audit of the Mexican gold reserves is not a singular case of actions that show a high level of mutual distrust among central banks. The latest move of the Bundesbank, which demanded the repatriation of its gold holding from Bank of New York, Bank of England and Banque de France, is another sign of distrust in the world’s financial system.

Clearly, the elite of the global banking system do not even trust each other.

But you are not supposed to notice that.

Their aim is to restore public con-fidence in them, and the system that supports them in the manner to which they have become accustomed.

How are they attempting to do this?

Propaganda.

Comforting and reassuring news announcements. Of new financial regulations (which won’t change bankster behaviour). “Strong” banks (which means, bigger profits).  AAA credit ratings (which the GFC proved to be fraudulent, misleading and deceptive). Planned caps on bankers’ bonuses (which won’t happen, or, will have as many holes as a kitchen colander). Financial transaction “Tobin” taxes (which will raise slush funds for politicians, but not change bankster behaviour). And more.

The choice is yours.

To believe.

Or not.

Just remember the old wisdom, that “actions speak louder than words”:

It is long past time to replace the bankers, and their global banking system.

The only way I can see of doing that, is by making every one of us our own central banker.

Tags: bank of mexico, banking, bundesbank, central banking, gold audit, gold repatriation, public confidence