Rethinking central banks for economic freedom is a feasible myth

by Jul 6, 2020Thinking outside the bottle0 comments


Paulo Pinto

Alti Wine Exchange founding member

Dear reader,

For this latest take on economic, financial and monetary issues that should be far more discussed (you can read more here), I would like to talk about something that is not so often debated when it comes to economy: myths.

Yuval Noah Harari, author of Sapiens: A brief history of humankind, says that people require myths in order to bind in common cause and function as an extended civilized community.

Among the many that he mentions, banks and central banks are not among them. But banks and the banking system are probably the biggest myth of them all, because most people can’t explain them – hence, having created a myth to make sense of it.

Going to the bank to make a deposit is a myth. A loan is possible because banks are in the business of taking deposits is another myth.

Harari is probably right about the fact that we need stories, and for that reason we are bringing what we hope will be a new myth that will replace the old one someday.

That myth is a Central Bank at the service of people owned by the people, through Social Security, that guarantees pensions and social security instead of banks.

It is a myth that has a different narrative. Banks are not independent entities because they are working as franchises of the central banks, therefore being able to apply the full force of regulation.

Since the end of the 20th century, with Alan Greenspan, and in particular since the crisis of 2007, central banks invented new tools because traditional ones were not working, making the myth of financial and monetary system look like science.

All these new tools are affecting our traditional way of life, or, as Harari would say, are affecting the “narrative”.

(Alan Greenspan, former long-time chairman of the US Federal Reserve)

(Alan Greenspan, former long-time chairman of the US Federal Reserve)

* * *

The new narrative requires that we visit the traditional focus on price stability and the relationship between new central banks’ balance sheet policy and interest rate performance.

Rethinking central banks is the result of the observation of 5 years of zero interest policy, and the financial dimension and impacts of this experiment with no scientific credibility.

It is also the result of the fact that central banks have become suspect enterprises and the acceptance of the fact that the banking system can no longer be fixed and needs to be reshaped so we can have true economic freedom and dignity for all people, in a real sense of community.

Such observation is also a factor that significantly inspired the creation and development of Alti Wine Exchange.

This also reminds that I have argued for this reshaping of the system before. You can find some of my arguments below. Send me an email with your thoughts and I will be happy to address them soon.


Explore More from Our Blog

Ever heard of a wine cocktail?

DEAR READER, I hope some of you learned from the reader letter last week [hyperlink to Week Ten post] and checked your attics! You never know how much wine sits above you, waiting to be uncorked and decanted—on someone else’s dime! Dear Sommelier Ferdinand, I have a...

What on earth is a ‘Wine Decanter’?

DEAR READER, It’s come to my attention that many of you are ill-informed, misinformed, and frankly, uninformed about how wine is to be consumed. Were I only a wine enthusiast, it would be wholly dispiriting. But—wine is my profession, and I’m obligated to recognize...

“What’s My Next Question?” – Benjamin Kaplan

What’s My Next Question? On a random day like today 11 years ago, a legendary Harvard Law professor and lawyer, Benjamin Kaplan, died at 99 years of age. A rich, marked life that left an impact long after his last breathe. Apart from influencing the likes of Ruth...

Wine that Makes You Look Up

Wines that Make You Look Up Can you imagine having a device that magnifies your view and never thinking to look up, never pointing it toward the sky? Until August 25, 1609, nobody had. Enter Galileo Galilee, the man who changed the way we see and interpret all that is...

Should you be swirling your wine before consumption?

DEAR READER, Through all the melodrama of the past few weeks, I’ve neglected to educate the newcomers about the art of winetasting. So, I dug deep into my inbox for this query: Sommelier Ferdinand, I went to a ball last night and wasn’t aware of the proper pre-drink...

Sommelier Ferdinand answers “What’s the point of drinking wine from a hundred years ago?”.

DEAR READER, I’ve heard what you’ve all had to say, and I’ve decided to reach out to Jerry, once again, to bury the hatchet. Who’s to say if he would be open to making amends… but I made the effort, on behalf of all you insightful readers! I’ll keep you all updated on...


DEAR READER, Something unprecedented has happened. My assistant has received an additional letter from Jerry. Remember him—from last week [READ HERE] Well, our beloved wine purist wrote back after reading yesterweek’s column: Sommelier Ferdinand, I don’t care about...

Transcending Time through Wine

On August 11, 1888, The Scientific American published its 658th issue, replete with exciting findings. From “A Study on Whirlwinds,” to “The Distillation of Peppermint" and thoughts on the human conscious, this popular science magazine had already been around since...

Boxed Wine and an angry recipient.

What an experience, to receive all your criticisms. That would shake any normal individual. But I’ve spent years having my judgments under a microscope, so I’ve learned to shut my doors to it. You are all welcome to try—but I won’t be changing any time soon! Speaking...

Sommelier Ferdinand answers “What it takes to become a Sommelier”.

DEAR READER, As the grapes grow richer, so do the bottler and buyer! Wine is an investment, my dear readers. Never forget the long game! Now, for some advice you folks have solicited: Sommelier Ferdinand, I want to be a sommelier, like yourself. I have the respect for...

Harry Potter and the Magical Creation of Seña 2007

On July 21, 2007, J.K. Rowling released her seventh and final book of a most memorable series. In just 24 hours, Harry Potter and the Deathly Hallows sold more than 11 million copies! On that same day, in a land more fascinating than Hogwarts, Seña 2007 was getting...

This week Sommelier Ferdinand answers the difficult question “Which do you prefer: Red or White?

DEAR READER, Some wrote in after last week, wishing me happiness…? Sending me love…? What do you all think, I’m still in love with Matilde? Save your pity for someone who needs it, I beg you! Anyway: Sommelier Ferdinand, Which do you prefer: Red, or white? -Clarise...