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Stupid Trilemma


Free Capital Flow

The idea that free capitals maximize profits thus customer satisfaction thus raising standards of living is absolutely correct. Capitals (if allowed to move freely) always move to places where profit is highest. But high profit means low offer. But low offer means high demand. But high demand means a great deal of people with unsatisfied needs. Get the idea?

Point in case. The resurgence of China is attributable to a large degree to capital flowing from the West and into that country. Yes, money did flow into China, but money is not the only form of capital. Know-how, patents, equipment, techniques, people and so on moved into China. To a large degree because of this free flow, China's standard of living began to grow. Sure. Capital movement wasn't the only thing that made the Chinese "economic miracle", the relaxing of communist economic doctrine and even the embrace of limited capitalism helped a great deal. But in the end China would not be what it is today without Western capital.

But if capital does this "flowing" naturally, why do Central Banks need to "manage" it? If the flow of capitals is self-managed (as Austrian Economic teaches), then what is the purpose of trying to control it artificially?

The sole purpose is to keep politicians in their jobs through the manipulation of internal economic conditions which are tied to the specific actions of specific governments. Politician A gave us a booming economy while politician B gave us stagnation. We will vote for A and not for B. This is the kind of thinking fostered by politicians… and it is completely wrong…on purpose. If we would to remove A and B and let capitals flow freely, people would benefit enormously from the increased manufacturing efficiency even if those manufacturing facilities are not located in their country. This would be so because the price of products decreases constantly in a free economy and thus these goods and service become increasingly more affordable! The idea that the only way in which people can have better standards of living is through increased wages is idiotic. Left to their own devices a free market increases standards of living without the need for wage increases.

Thus the idea that having or fostering the free movement of capitals must be achieved through market manipulation of Central Banks is plain idiotic. Free markets do so naturally thus the only reason to have Central Banks "managing" something is to either add or remove barriers… which are artificial and were erected by previous politicians and Central Bankers.

In the end, the concept of achieving the free flow of capital through Central Bank action is utterly nonsensical. Best Central Bankers can do is to abolish any capital flow restriction and then abolish themselves!

Independent Monetary Policy

We have to ask again why is that we actually need and Independent Monetary Policy? In practice an Independent Monetary Policy translates as the capacity to fix interest rates and print money. That's it. Do you actually want this? Are you OK with politicians fixing interest rates and printing money to their hearths' content? Knowing that this will create booms, busts and inflation? Because this is all you are going to get through an "Independent Monetary Policy".

Furthermore, we would like to point out to the fact that all this push for an "Independent Monetary Policy" is relatively new. Up to about the 1800 nobody gave it two thoughts because all fiat money was related to gold and silver. Governments could print but if they would to do so, their coffers would empty of gold and silver dramatically fast. At that time you were able to get gold or silver and simply walk away. Not anymore. You are a prisoner. Your money is no longer yours. Its value has been hijacked by politicians through "Independent Monetary Policy", which in a sense it is correct. Their monetary policy is completely independent from your wellbeing!

Consider this. Up to the 1800's there was no Independent Monetary Policy you could not walk away from yet, the economy kept working without any problems. Hummmm… do you begin to see the issue here? The point is that we do not need nor want an Independent Monetary Policy because it is not only useless but it is deleterious to your wellbeing.


But this is an obscure theoretical problem, right?

If only…

Or would you prefer "not a chance"?

We are talking about your financial and economic wellbeing. We are talking about stuff that affects you every day. We are talking about things that make your life miserable and unbearable. We are talking about conditions that create the rat's race you call your job. Your life, your future and your family's future depend of "obscure theoretical problems" such as these ones. We know that sufficiently advanced technology is indistinguishable from magic. This is not the point. The point is that this is not "advanced technology" and this is most definitively not beyond the reach of the understanding of an average teenager. This is simple and straightforward stuff, yet potent like cyanide (i.e. memory refresher, Hitler and the "black pill").

Oftentimes politicians and economists hide behind these concepts with fancy names and make everything seem so reasonable, so studied, so…scientific. Bullshit!!!

This is the stuff con-artists use every day. The only difference is that it is "legal"; the government, your government uses this stuff every day against you. And incidentally now you have yet another reason why the concept of "legal" is a joke.

Look. This is not complicated. This garbage exists because Central Banks exist which they do because politicians exist. It is the theory that depicts how flawed is their con-game. That's right! Their con game is so deeply flawed that they even have theories to show you the holes!

Yet, people fall for it every time. In the end that's OK because it is their life. Just one thing, why do we have to put up with it?


The so-called Trilemma is actually an artificial limitation that came into existence because of the creation of artificial entities called Central Banks who artificially control the economy in an attempt to bend it to the artificial shape of artificial economic and social theories. In an artificial manner.

We don't need nor want stinking:

  1. Stable Exchange Rates
  2. Free Capital Flow
  3. Independent Monetary Policy

And as usual we come to a usual conclusion which we usually reach. The Trilemma is an artificial artifact which has no solution unless we get rid of governments (this much was acknowledged -and has been demonstrated- by mainstream economics). We remove the state and the Trilemma suddenly disappears! What an elegant solution and demonstration of the utter uselessness of governments supported by the theories of mainstream economics!

Game over.

Unless, this is, you would like continuing playing. In this case we pass since we already know where this leads: more of the same. More booms, more busts, more inflation, more economic and financial crises, more despair and poverty, more stagnation. Happy now? Would you like to keep playing?

Note: please see the Glossary if you are unfamiliar with certain words.

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