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If the thunder
don't get you, then the lightning will.
The Grateful Dead, The
Wheel(lyrics)
In the world of phenomena, everything has a beginning and
an end; and today, the bankers' endgame is moving closer to its inevitable
resolution and demise. The question is no longer if, it is when and how.
The relationship between paper money and gold is causal
in central banking's collapse. When paper money was backed by gold, it (1)
gave the bankers' paper money its value and (2) constrained the ability of
governments to print limitless amounts of money, as governments needed money
backed by gold to balance trade deficits, i.e. value for value.
The importance of this constraint, i.e.
"golden-fetters", became clear when escalating military spending
caused the rapid loss of US gold reserves; and in 1971, the US withdrew the
gold-backing of the US dollar and the US balance of trade permanently went
negative.
With gold no longer limiting how much money governments
could print, after 1971 the global money supply exploded.
http://positivemoney.org/how-money-works/how-...we-end-up-here/
In capitalist economies, because money enters the money
supply as loans, the explosive rise in the money supply led to an equally
explosive rise in debt.
Today, this is the central bankers' final-and
fatal-conundrum: Aggregate levels of debt are now so high, credit can no
longer induce sufficient economy expansion to pay off or even service
capitalism's constantly compounding debts.
Central bankers' efforts to revive economic growth, e.g.
quantitative easing, low, zero and negative interest rates, are like pouring
more and more gasoline into an already flooded engine hoping the additional
gas will cause the stalled engine to go faster.
Today, central bankers are trapped by conditions they
created. It was their excessive expansion of the money supply after 1971 that
lead to the speculative bubbles whose serial collapse resulted in the
reawakening of deflationary forces not seen since the Great Depression.
To prevent another Great Depression, central bankers
desperately tried to revive economic demand and growth by increasing the
monetary base to increase the amounts of loans banks could make.
But instead of loaning the money, banks redeposited the
excess reserves (AMBSL) with central banks; and the hoped-for increase in
circulating money (M1, M2, M3, etc.) and credit and debt (TCMDO)-and growth
in economic activity-never occurred.
..the increase in the monetary bases was not
translated into growth in the money supply because banks have been reluctant
to extend loans, choosing instead of accumulate reserves.
p. 265, Quantitative Easing As A Highway to
Hyperinflation, Imad A. Moosa,2014
In the end,
self-interest is a two-edged sword with no handle
TOMORROW: A HYPERINFLATIONARY TSUNAMI OR A RIPTIDE OF
DEFLATION..OR BOTH
During the Great Depression, money appeared to
'disappear' because in capitalist economies, banknotes are derivatives of
credit and debt masquerading as money; and in a severe deflationary
collapse, debts default, credit is withdrawn and what appears to be money
vanishes.
Today, central bankers are attempting to offset the
growing global deflationary riptide by 'inflation targeting', i.e. using
cheap credit and inflating the monetary base to artificially induce
inflationary demand. So far, deflation is winning; but should inflation gain
the upper hand, hyperinflation, not inflation, will result as the monetary
base is now too large to limit any inflationary surge.
A deflationary
collapse or hyperinflation may be an even-money bet
Capitalism's
survival is not
Fait Paper Money: The History and Evolution of Our Currency by Ralph T. Foster (2010) tells the story of fait paper money. In
its one-thousand year history, no regime of paper money has every lasted. The
fate of today's fiat paper currencies, e.g. the US dollar, the euro, the yen,
the yuan, the pound, etc. will be no different.
In my latest youtube video, It's Not About Gold; But It's All About Gold, Ralph T. Foster and I discuss Eric Maria Remarque's book, The Black Obelisk, and the
Weimer hyperinflation. Foster's observation that the Weimer hyperinflation
was intentional has particular relevance today, see https://www.youtube.com/user/SchoonWorks/discussion.
Germany intentionally hyperinflated its currency to
pay its onerous war debts, i.e. reparations, after World War I with
hyperinflated, i.e. worthless, paper money. Today's desperately over-indebted
nations might well do the same.
While the
cost of hyperinflation is extremely high
In extreme
cases, it appears reasonable
Buy gold, buy silver, have faith.
Darryl Robert Schoon
www.drschoon.com
www.survivethecrisis.com
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