Saturday, February 21, 2015

How the T&T Central Bank Expands The Money Supply and Devalues The $TT

In order to obscure the role of the Trinidad & Tobago Central Bank (TTCB) in stealing wealth via legalized counterfeiting the TTCB like other central banks engage in a scheme called "Open Market Operations." 

The term itself is a euphemism as it is neither open nor a market phenomenon; rather its a technique that furthers increased government spending at the expense of the unsuspecting working class.

On one hand, to directly fund government spending the TTCB sells government bonds. On the other hand, the TTCB subsequently buys back government bonds by increasing Commercial Bank balances electronically held at the Central Bank as payment. The money supply therefore expands and causes inflation.

Alternatively; the TTCB expands the money supply by making new money available electronically for loans to commercial banks at the very low repo rate (currently 3.5%). Commercial banks subsequently demand printed banknotes as necessary against its reserve balance at the TTCB.

Source: Trinidad and Tobago Central Bank
The TTCB -a critical arm of the state has a legal monopoly over perpetual money printing that increases the purchasing power of the state by syphoning away the value of money already in circulation. This process is purposely shrouded in vague definitions and descriptions for as long as the counterfeiter is not completely exposed, the state enjoys seemingly unlimited privilege at the expense of other holders of the $TT.

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