Central Banks: A Threat to Democracy – and our Lifetime

How much power do central banks hold, how do they wield this power, and are they even allowed to exercise political or economic authority?

Recently, Jerome Powell, the Chairman of the U.S. Federal Reserve (FED), stated that he would not resign, even if requested by the future U.S. President, Donald Trump. Regardless of one's opinions on Trump, he was democratically elected. In contrast, the officials of central banks, whether the FED, the European Central Bank (ECB), or other institutions, are not democratically legitimized. Yet central banks and their officials have evolved into centers of power that influence the value of our labor and time by controlling money creation and setting interest rates.

Looking to the Euro-Zone, the Maastricht Treaty of 1992 set clear limits for the ECB (European Central Bank). The ECB, for instance, is not permitted to buy government bonds to finance states and should not interfere in economic policy areas. Additionally, it has no mandate to advocate for climate protection or sustainability. However, in recent years, the ECB has repeatedly purchased government bonds and actively engaged in economic and environmental policy discussions. While it may seem positive for the ECB to advocate for climate protection, this is misleading. The ECB claimed that Bitcoin was harmful to the climate due to its energy consumption—a fundamentally incorrect statement. In reality, Bitcoin promotes the expansion of renewable energy and helps stabilize the power grid, an often-overlooked fact, while the traditional financial system has significant negative environmental impacts.

The ECB's disregard for legal boundaries is both evident and public. Yet, no one challenges this institution, which holds a monopoly on money creation.

Central banks consist of institutions and officials who are not elected by the people, yet engage in illegal state financing, exert unauthorized political influence, and largely stand above the law due to their power. This is not an opinion but an observable fact.

The current FIAT currency system has shown significant weaknesses since its inception. It is based on an uncovered system that U.S. President Richard Nixon established in 1971 when he ended the gold standard to finance the Vietnam War. Many other central banks followed this model of uncovered money creation.

Most people exchange their time for money daily. One of the most important functions of sound money is to transport the value of time and labor into the future without loss. But the FIAT system cannot achieve this, as inflation continuously devalues money, effectively destroying our earned time and labor. “It doesn’t make sense to save money in a currency that someone else can endlessly print out of thin air.”

A prime example of massive monetary expansion is the M3 money supply of the Euro: in 1999, it was around €4.6 trillion, and today it stands at approximately €18.4 trillion. Such an increase in the money supply should align with economic productivity growth, which was obviously not the case during crisis periods like the 2008 financial crisis or the COVID-19 crisis, when vast amounts of new money were printed.

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Absolute Power Isn’t Enough – It Goes Even Further!

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Control over monetary policy is the basis of central bank power. However, many central banks—including the ECB and the FED—are currently working to expand this power, while others, like China’s central bank, have already moved further and serve as a model. Their plan includes introducing Central Bank Digital Currency (CBDC), such as the so-called E-Euro, a digital Euro on a blockchain managed centrally by the ECB.

While many of us already use digital payment methods (online banking, PayPal, credit cards, etc.), CBDCs pose significant risks:

1. Permanence Through Blockchain: All transactions are permanently recorded on the blockchain. This could lead to a central database where the consumption behavior of each individual is recorded and analyzed—an unprecedented surveillance tool. We don’t know today which governments and ideologies will shape our lives in 30 years. Imagine being denied essential cancer treatment in 2050 because the CBDC blockchain shows that you purchased grilled meat in 2030.

2. Programmability of the E-Euro: CBDCs are programmable, meaning the central bank could determine when and how money can be used. For example, the E-Euro could be restricted from being spent on certain items, such as limiting travel spending, or even given an expiration date to encourage consumption and stabilize the job market. While the ECB assures that the E-Euro will not be programmable, recent years have shown that laws can be quickly and quietly amended in times of crisis. The question also arises as to what such a promise from the ECB is worth in the future if they already act above the law today. Additionally, we have just seen how laws can be enacted without discussion if authorities deem it necessary. While we were focused on COVID-19, the Wealth Tax Law—a form of expropriation—was pushed forward, along with the European Asset Register and property tax reform.

CBDCs open up unprecedented possibilities for control and regulation of the individual. This technology enables mass and individual control, which ultimately serves only a select few and is cloaked in causes like anti-terrorism, anti-money laundering, and social justice, or, as in China, in terms of positive political ideology. To believe that such an ultimate instrument of power, once available, would not be used, seems naive. No tool has ever been invented only to remain unused.

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The Central Banks Are Afraid

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Power tends to corrupt, especially within monopoly institutions that are not democratically legitimized. Central banks therefore fear progress and alternatives that could challenge their position of power rather than the will of the people. This is why central banks like the ECB, FED, and, recently, the Swiss National Bank have increasingly spoken out critically against Bitcoin. The arguments against Bitcoin, however, are rebuttable and are entirely wrong and often intentionally misleading.

For example, the ECB commissioned an analysis designed specifically to portray Bitcoin negatively. The study was biased from the outset, and the findings predictably aligned with this predetermined conclusion. Taxpayer money was spent on this.

Additionally, the ECB regularly releases articles by its two “experts,” Ulrich Bindseil and Jürgen Schaaf, who claimed in a November 2020 Bitcoin analysis titled “Bitcoin’s Last Stand” that “Bitcoin, due to technical deficiencies and lack of legal applications, was on its way to insignificance.” In another analysis in October 2024 titled “The Distributional Consequences of Bitcoin,” they argued that “the rising Bitcoin price could lead to unequal wealth distributions, as early buyers might benefit at the expense of future buyers.”

Both analyses are demonstrably and fundamentally flawed. The truth is that FIAT currency, in particular, is used for illegal transactions and that the FIAT system itself creates unequal wealth distribution by benefiting those close to the source of money creation over others. They also conveniently omit that it’s common in any market that early investors, if successful, earn more than later ones, as is the case with stocks, and that they themselves advised people not to invest in Bitcoin early on.

I could write an entire article solely on the central banks’ fight against crypto, but it can also be summarized briefly: The only reason central banks fight against Bitcoin (and crypto) is to preserve and expand their power. People and states using FIAT currency and CBDCs can be controlled by central banks. Those using Bitcoin cannot. Sometimes the simplest explanations are the truest.

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Bitcoin and the VOW Ecosystem: Pathways to Financial Freedom and Self-Determination

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It is essential to adhere to rules and democratic principles that foster communal coexistence. But there is no reason to accept total control by an institution that is not democratically legitimized and often acts in the interests of the few against the good of the people. Bitcoin and crypto offer an alternative—a way to break free from this system and regain financial freedom and self-determination.

Alongside Bitcoin, a new, even more comprehensive and mass-accessible alternative to the traditional financial system has emerged: the VOW Ecosystem. This decentralized, blockchain-based system uses a digital voucher (coupon) accepted as payment by some of the world’s largest brands, retailers, airlines, and hotels, and is utilized as cashback. Its adoption is continuously rising due to its clear advantages over the FIAT system.

The VOW Ecosystem provides a unique opportunity to protect wealth from inflation, build purchasing power through deflation, and consume independently of traditional financial systems.

As a liquidity provider in the VOW Ecosystem (investor), you can safeguard your assets from inflation while growing your wealth through the deflationary nature of the VOW token. The decentralized concept ensures that you retain complete control over your capital, while also generating passive income far beyond what the traditional financial system can offer.

Furthermore, the VOW Ecosystem enables the creation of a distribution network to generate additional income without costs.

I am available for a personal conversation to provide you with detailed insights and practical guidance on how to make the most of the VOW Ecosystem's benefits. Feel free to book a Zoom call here: https://calendly.com/cashflow-call/60min?

- No Costs – No Financial Advice –

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