September 17, 2012
This is it, folks: the final chapter of America’s great financial blowout has begun. The Federal Reserve’s decision to announce “infinite” quantitative easing has now put us all on the path of infinite money creation. With up to $85 billion in monthly money creation — including $40 billion a month in purchases of mortgage-backed securities — the Fed is now wholly committed to the creation of new fake money to cover old fake debts. Mathematically, this financial death spiral can only end in sheer catastrophe.
This massive money creation tactic is the Fed’s last-ditch plan to desperately try to save the economy. “I think the country should have panicked over what the Fed is saying that we have lost control,” said Ron Paul, “and the only thing we have left is massively creating new money out of thin air, which has not worked before, and is not going to work this time.”
Peter Schiff added, “This is a disastrous monetary policy; it’s kamikaze monetary policy.” (End Of the American Dream)
And he’s right. It’s suicide. It’s also highly offensive to anyone who can actually do math… which, sadly, isn’t that many people these days.
Steal from the poor to give to the rich
Quantitative easing, you see, is essentially the Federal Reserve creating money and then handing it to the richest banks. Meanwhile, all that new money floating around erodes the value of the dollars in the hands of the working taxpayers. So their grocery bills go up. Their fuel costs go up. Their daycare costs increase and their utility bills creep ever skyward.
But the rich banksters are simultaneously rolling in FREE Fed cash, and instead of actually lending this money out and doing something useful with it, they crank up their own executive bonuses to make sure they get paid while the rest of the economy crumbles. And why? It’s simple: Because people are crooks, and if they get handed $40 billion a month in free money, they’re just going to grin and say, “How can we get MORE?”
That’s the credo of the banks: MORE!
When you’re out of a job and looking for honest work just to put a roof over your head, the bank is repossessing your house and screaming “MORE!”
When you can’t make that car payment and you have to start riding the bus with the minimum wage masses, the banks scream “MORE!”
When you’re trying to put healthy food on the table for your own family, and you see food prices ratcheting higher and higher as the value of your hard-earned dollar erodes, the banks scream “MORE!”
This mantra is all they know. The top global banks do not operate on compassion, benefit to society, fairness or even anything resembling lawful activity. They simply hornswaggle their way into the receiving end of ALL the money: Mortgage money, bailout money, government money and of course Fed money. That’s the game, you see: Screw the whole world and everybody in it. There’s MORE to be had!
Fed pumping is essentially a Ponzi scheme
How long will this go on? Until the whole system suddenly collapses due to its own corruption and greed. All such systems eventually collapse, of course. The Federal Reserve is essentially pushing a global Ponzi scheme where new money is created in order to keep old money from being lost.
The problem with all Ponzi schemes is that their very survival depends on continually expanding the money base upon which they operate. And since mathematics tells us that no currency system can be expanded to infinity, every such Ponzi-like system must, by definition, come crashing down.
We’ve seen it time and time again, of course. Zimbabwe cranked its currency into hyperinflation and then collapsed. So did Argentina. Chile. Peru. Weimar Germany, too:
In 1922, the largest denomination of the Papiermark was 50,000. A year later it was 100 Trillion. This means that by December 1923, the exchange rate with the US Dollar was 4.2 Trillion to 1. It is estimated that by November 1923, the yearly inflation rate was considered 325,000,000%. (http://www.mint.com/blog/trends/hyperinflation-the-story-of-9-failed-…)
Yugoslavia: “…during the height of hyperinflation (December 1994), inflation was increasing by a rate of 100% per day.”
Peru: “Peruvian government decided again to replace the currency, this time with the Neuvo Sol, at a rate of 1,000,000,000 to 1.”
Zimbabwe: “In August 2008, the government removed ten zeros from the currency, and 10 Billion ZWD became equal to 1 New ZWD, with an estimated annual inflation rate of about 500 quintillion (18 zeros) percent, with a monthly rate of 13 billion percent.”
Hungary: “In 1944, the Hungarian Pengo’s highest denomination was the 1,000 note. A year later it was 10,000,000. And by mid-1946, it was 100,000,000,000,000,000,000.”
Can this happen to the U.S. dollar?
The good news is that the U.S. dollar has a large circulation base. The U.S. dollar M2 money supply is roughly $10 trillion.
That sounds really large until you consider the U.S. national debt is, all by itself, $16 trillion. (www.USdebtClock.org) In just four more years, by 2016, that debt will almost certainly reach $22 trillion. (http://www.usdebtclock.org/cbo-omb-gop-budget-estimates.html)
On top of all this, if the Fed is printing $85 billion a month, it adds another trillion dollars to the monetary base each year. Effectively, this means the Fed will be expanding the money supply by 10% annually, from day one. Except it doesn’t end there, of course. In just a few months, the $85 billion a month will need to be increased to $200 billion a month. Then $500 billion a month. And before you know it, the Fed is creating one trillion dollars a month in a grand, final blowout of the U.S. dollar.
QE3 becomes the “infinite bailout” strategy of the Fed. But there’s a problem in all this: Infinite money creation means infinite devaluation. As the money supply expands, the value of the dollars currently in circulation (physically or electronically) approaches ZERO. Such is the curse of mathematics and the laws of economics.
A global debt dump is inevitable
The final phase of all this will be radically accelerated, of course, by the dumping of U.S. government debt by other central banks in China, Japan and elsewhere. When they see the writing on the wall, they’ll stage a selloff. The selloff will send shockwaves throughout the financial sector, causing investors to flee the dollar and ultimately resulting in the Fed creating even more fiat currency to buy back U.S. debt in a last-ditch effort to prevent a national bankruptcy.
This is the point where you get into Zimbabwe territory… where the government is forced to issue “new dollars” with a trade-in value of 1,000,000 to 1, and where the Fed becomes the last buyer of U.S. debt because nobody else will touch it. This is a lot like getting a cash advance on your credit card in order to make your minimum monthly payment. The debt accumulates as crushing compound interest, and there is no escape from the inevitable default.
This day is coming for America and the U.S. dollar.
Timing? Still unknown
The timing on all this is, of course, an unknown. Some of the more outspoken critics of Fed financial policy believe we’re going to see a financial meltdown before the end of April 2013. Others think it may take several years longer. A few observers say we’ll be lucky to make it to Christmas.
Personally, I’m always amazed at how long corrupt institutions can prop up their monetary scams, so I tend to think a full-blown meltdown might require years to take place. But the banking debt crisis is likely to happen much sooner, potentially even this year (after the election). That’s not an official prediction, however; it’s just a cautious warning to be safe rather than sorry. Historically, my own predictions tend to be 1-3 years too early. I began warning about the dot-com bubble in 1998, for example, and it didn’t burst until 2001. I began warning about the housing bubble a year or two before it collapsed.
Either way, the U.S. dollar has become a game of musical chairs, and the loser is anyone holding dollars when the music stops. Don’t have all your eggs in the dollar basket when that day comes, okay? Diversify into storable food, gold, farm land… anything that holds value through a currency collapse.
Because remember, the value of the currency you hold can be stolen from you even if the physical paper money is not. This swindle has been repeated countless times throughout human history, always by corrupt central bankers and government conspirators. Time after time, the People get scammed, and time after time, most of them can’t even figure out who stole the money. That’s the evil genius of the entire plan: Currency creation is invisible theft. With every new dollar they create, they effectively steal one dollar’s worth of purchasing power from those who hold the currency.
In essence, then, the Federal Reserve has announce its plan to steal $85 billion a month from those who hold U.S. dollars… with no limit to the number of months this theft will continue.
We are staring into the eyes of the beast here, looking at the greatest financial swindle ever pulled off in the history of the world. This is the banker end game. When this chapter is complete, the people will be left with nothing while the banks own everything. It’s all about MORE! …remember?
Money is just one aspect of the consolidation of power. The other is electricity and energy, transportation, and computing power. The fact that Moore’s law and cheap electrical power has raised the standard of living to a point never seen by man prior to the 20th century, and more importantly, to every man in the developed world (a first), has always been problematic.
So we are told that coal is bad. OK, I see that. But then we’re told that nuclear is bad too. I can’t see that. In fact the only thing I see bad about nuclear is that fools want to use it as a weapon. When the equivalent of 100 gasoline tanker truck’s worth of energy can be held in a 1 pound cube that fits in the palm of your hand, that means something. We hear about every minor (actually usually less than minor) report of any event in any nuclear power plant, while major oil refinery explosions and fires are treated as local news, until the next celebrity gossip hits the wires.
Meanwhile, the elite are in love with solar power. They’ve pushed through tax incentives, mandates, and a little known benefit called “net metering” to get us to pay for their solar power. So when the grid becomes unstable they’ll be just fine at home. In fact, they’ll make money on the deal because of net metering. See, you buy electricity at a retail rate. The provider buys (or generates) electricity at a wholesale rate, then adds on maintenance costs and in most cases a profit. Net metering means the provider has to buy electricity from the “green” source at retail rates, not wholesale. So what happens when a large amount of electricity is produced by home solar systems? The provider loses money. That money has to be made up somewhere, so it will eventually lead to higher prices for non-solar homes. Not only that, but the providers will have less capital available for new power generation stations, like nuclear plants. And remember that solar isn’t a viable option for baseload production, because energy storage is still extremely cost prohibitive.
Energy policy looks stupid, misguided, idiotic, and so on until the POV is changed. The point of view needed the way I see it is ‘all for them, none for us’. Then things make more sense.
It’s about the ruling class and their minions have energy and the rest of us living without any. Oh and we get to pay for their energy to boot.
QE (1, 2, 3, & more) is also a tacit admission that the feds can’t simply ‘tax’ enough to pay for their spendthrift ways.
Direct monetization is the only way to pay for more and more transfer programs.
Where’s the tipping point into high inflation (back to the 1970s at least)?
If I knew that I’d be richer than Soros…
QE3 means instead of 2 + 2 = 5 it has become necessay for 2 + 2 to equal 22. You’re not a right wing extremist who objects to the inner party banking authority are you Winston?
The great society is here. You have never known hunger or war.This is why the founding fondlers have built The North AMERICAN Union. Three nations under god and allah. Indivisible. With prosperity and jobs for all.
QE3 = RIP Liberty squared. That’s what the swiss patent clerk who married his cousin has shown. Its all about relativity.
The 85 billion per day. is carefully allocated to important public purposes. Like educating children to treat all animals equally. Without regard to having 4 legs or 2 legs. Or being male female or neutered.
The great society demands that one animal enjoys one vote. WOMEN blacks immigrants DOGS AND CATS. We all built this together and we all need to do our duty and get out to vote this November.
Its September now. A MONTH WHICH IN LATIN MEANS 7TH MONTH OF THE YEAR. October will be the 8th month of 2012. Then comes The 9th month which is when we all exercise our important dut to choose our leaders. That too is part of the math of freedom.
The clocks are striking 13 Winston. You are wise to inform yourself about the meaning of QE3. You want to make an informed choice when you put your hand paw or hoof on the voting lever in less than 2 months from now.
That’s a good boy Winston. You are a very good boy. Yes you are.
Amazing.. I need some time to think about it more to completely understand. Doesn’t make any sense to me at the moment.
Hi Dom. I highly recommend Murray Rothbard’s “What Has Government Done to Our Money?” for the best explanation I’ve ever come across. Also, Ludwig von Mises wrote a brilliant explanation of why all fiat currencies are doomed to the fate described in the article. Unfortunately, I can’t remember which of his works it was in. Maybe someone less senile can help with that. lol
Dom my favorite thought experiment on this is the desert island, with five guys…one of whom is a bankster.
They each specialize in something; Bob fishes, Ted picks coconuts, etc. David the bankster gathers them around one day and tells them that barter is inefficient; Bob’s fish cost one-and-a-half coconuts, a coconut is worth two pints of the fresh water Bill gets from up the mountain, etc. They need a mode of exchange–money. So the banker prints up 100 “dollars” from the mimeograph that fortuitously made it ashore, and they establish prices.
Ted charges a buck per coconut.
It all goes well; exchange rates are stable, so prices are stable.
Until David the evil bankster one day surreptitiously prints up another 100 “dollars”. He starts spending them into the little economy, gathering a great deal of coconuts, water, and fish for himself. Eventually, the others tire of their labors and raise their rates.
Soon, Ted has to charge two “dollars” per coconut…and voila, equilibrium is reached again.
See what David did? He stole half the value of everyone’s money without lifting a finger! Because Ted, who’d saved twenty dollars, now pays twice as much for his goods. His twenty dollars is only WORTH ten, in purchasing power!
In this way banksters can steal money from a locked vault without ever entering the premises.
And it’s why GOLD and SILVER will always be the best money; they can’t be printed. The labor and capital to extract them closely mirrors the labor and capital to produce any other good–so they lead to price stability long-term.
Our system is even worse than the island system–because every dollar that’s printed also requires an interest payment–a mathematically impossible system.
It’s the best scam ever invented, something for nothing. Rothschild was proud that HIS form of alchemy didn’t need lead to transform into gold; he uses nothing and turns it into gold.
Who benefits when we are all broke and no longer paying taxes though? Wouldn’t it make more sense to right the ship and get back to business?
I am not sure. If the bankers can acquire physical assets then that can be used to get power/wealth.
Exactly–it’s nearly impossible for us “normals” to fathom the mind of the psychopath.
They want CONTROL. They don’t care if we return to feudalism; as long as they’re in power.
Remember the old Soviets? The high-and-mighty of the Party would drive around in those craptacular Zil limousines…inferior to a 1980 Camry in every way. But by god they were high Party members and they were in control–and nobody ELSE had a Zil!
I think they’d rather have the same stasis in human affairs we had in the Dark/Middle ages…and be in control…than suffer the possibility of the despicable us having something nice…and being free.
I’m with Meth on this one, mang. They are primarily driven by the lust to control. Again, Orwell’s 1984 does an excellent job explaining this. The main character, Winston Smith is trying to understand the motivation of his torturer, O’Brian. Though O’Brian has a few things the average party member does not, he still lives a fairly austere life relative to even a typical middle class person in our time. O’Brian explain that the object of torture is torture. The object of power is power. To control. Everyone, everywhere.
That’s what these psych jobs get off on.
Wall Street is all about bulls fighting bears. Literally. Not that long ago they used to put 1 bull and 1 bear in a ring and make them fight it out to the death.
UFC. Michael Vick Dog eat Dog productions. Did you see the ambassador down show last night monsignor. Salafists are leading the Middle East Division now.
Somewhere in the bowels of the vatican and the basement of the Parliament. The real bloodsports of kings are streaming live in full Monarchvision.
I bet 100000000 ducats on the Aryan vs. The new fish Latin King on the 9 pm San Quentin Shower match at 9 pm.
If you think mortimer duke is content to just make Eddie Murphy sad look into the roman coliseum history and think again.
Bread and circusses included 5000 animals slaughtered per day on average. Quite a few people too I’m sure.
I want to find something to be upbeat about. Jesse Ventura 2016? Nah. Eloi playtime is over for me. I accidentally wikileaked my last drop of optimism.
Nice example of theft made easy.
The money myth exploded refers to the impossibility of the system.
Ah yes–I’ve seen that one! It’s a great explanation, better than mine.
The island experiment I’ve seen quoted often. I don’t know who the source is but it’s such an easy one to grasp; it cuts through all the obfuscation and bullshit the banksters use to hide their scam.
Probably the best full-scale explanation of how our money system works is The Money Masters–3.5 hours, but well worth it.
For a quick easy intro:
The American Dream–short (30 minutes), cuts to the chase.
Because remember, the value of the currency you hold can be stolen from you even if the physical paper money is not.
Hard assets worth more when fiat money is worthless.
I would recommend copper.The average dwelling has about 400 lbs the average car has 50 lbs. I had a dream once that I started a recycling business in a high vacancy city I think it was Vegas.
You get a crew of Jose Cuervos from the home depot on the cheap. They go green and save the planet one McMansion at a time. Keynesian broken phallus windows you know.
You end up with a bunch of underground Scrooge McDuck vaults of copper to swim in.
Today Cu is $3+ a lb. After QE3 it goes to 30 or even 300. Not much you can do with gold but everything needs copper.