Cheap Money
Cheap money has been printed to artificially prop up the markets. As inflation pressures have continued so Central banks have had to act like they were going to tackle it, whilst carefully hedging about being data dependent and concerns for the economy. The recent interest rate rise by the Fed has resulted in a high degree of volatility and carnage not only in the stock market but in the cryptocurrency arena too.
Right now the dollar looks good, the cleanest shirt in the laundry! This strength is likely to continue right until everything collapses that is.
US debt has been widely reported as having surpassed $30 trillion. The interest due on the debt to GDP now stands at 4.4%. This is very high indicator of civil unrest, one which is practically guaranteed at 6%.
Anyone who cares to digest the facts that we live in a debt based economy, that necessitates continual growth by the expansion of debt, can see that such a combination, if allowed to proceed to its logical end, will result in a crash of biblical proportions.
The inflation was never temporary, or transitory, and the Fed knew it. They have been lying to us. They are prepared to print to infinity and beyond. I heard it first from the late Rob Kirby back in October 2021 when he said in an interview on Finance and Liberty that hyperinflation had begun. Early days.
Since then I have heard increasing number of voices expressing that opinion.
What’s approaching, let’s be honest about it, is going to be the worst financial and economic disaster in all of human history.
They have been wanting this inflation for some time
Up until March 2020 the vast majority of the inflation was contained on the Fed’s asset sheet. Cheap money had flown into bidding up financial assets, especially stock buy backs and stoking further housing bubbles around the world.
Now, we have moved onto helicopter money. This is when inflationary pressures will become evident throughout the economy. Indeed inflation figures are running around 8% in many places. This is official stats, real inflation is at least double this.
Meanwhile, an examination of the poorer, heavily indebted nations shows an unsustainable burden is growing which combined with fuel and food shortages bodes ill. Sri Lanka has already gone bankrupt. There is runaway inflation in Turkey and Lebanon. Other basket cases include Argentina, Venezuela, Nigeria, Zimbabwe.
We accept that hyperinflation can happen in these countries – but not ours. In Germany a basket of groceries has gone up for the 17th month in a row. Well before the Ukraine war, but the situation will only bring increased pressures on food availability and prices.
Still, I’m sure all those lockdowns we’ve had have made our economy stronger! I’m also sure the current lockdowns in China will have no impact on the West!
Dragflation
We have now entered the period Gerald Celente has coined “dragflation” .
(Gerald Celente on his YouTube show Trends in the News)
US GDP has actually fallen this year whilst the burden of the considerable and ever increasing debt has risen due to the interest rate rises. So we have a dragging down effect of the underlying depression whilst the Central banks are carrying out their policy of hyperinflating the debt away.
US debt has been widely reported as having surpassed $30 trillion. The interest due on the debt to GDP now stands at 4.4%. This is very high indicator of civil unrest, one which is practically guaranteed if this figure reaches 6%.
Of course the question currently is how much market volatility can the Fed bear before halting a programme of interest rate rises. Although whether they will be able to reverse course is politically debatable. The People’s Bank of China has promised to support cheap money policy. (Which is what Modern Monetary Theory should really be called).
TerraUSD
Many people this week have been burnt by the targeted attack on TerraUSD. An event like this should make us all aware of how easily the big crims (BlackRock and Citadel in this case), can use their enormous resources to basically do what they want. This was a kill job out of which they made a substantial profit. Naturally Yellen used it as an opportunity to call for more regulation. There is also the resulting decline in trust in all cryptos.
Just what they want before bringing out their only CBDCs.
This is why we all need to have what resources we have diversified. Commodities you can hold in your hand, like gold, free of any third party risk. I’m going to be stocking up on seeds next. I’ve been trying to tell friends and family to stock up on food, but I think they say yes, but feel little inclined to action.
What’s approaching, let’s be honest about it, is going to be the worst financial and economic disaster in all of human history. It will be global and it will effect everybody (including the super rich??). Recognising where we are in the picture now may necessitate a shift in priorities.
This winter will we still be wanting a good rate of return on our investments or a warm coat and boots?
Unfortunately the gravity of the situation is such that there are no real solutions to be found for individuals. Falling back to our local communities will be essential for survival. According to Gregory Mannerino this epic collapse will begin in the bond market. Expect to see all financial assets go to zero. Trust in paper currencies will be gone and trust in governments to sort out the problems will likely be gone too.
If this isn’t laying down the ground work for huge upheavals and revolutionary conditions I don’t know what is.
Liberty Leading the People by Eugene Delacroix