After more than a decade of studying, documenting and cautioning on the great fraud of our time we’re as shocked as we’ve ever been. In the year 2015, the entire essence of economic and financial management the world over has been reduced to a single policy…
Thou shalt degrade money and expand debt in perpetuity.
Here in the United States, as in Europe, Japan, China, and most everywhere else, this policy is carried out with earnest zeal. No limitations are holding back policy makers and politicians. Consequences have disappeared from practical prudence or consideration.
New credits are borrowed into existence by the Federal Reserve and spent by the Treasury. All the while the old debts are never paid down. The interest is merely serviced and the old debts are rolled over by issuing new debts…which are purchased by borrowing new credits into existence.
How does this wonderful scheme continue in broad daylight? Are people just not aware of it? Or is the broad population completely apathetic?
Anyone who earns their living through honest and productive work should be insulted at the mischief that mocks and undermines their endeavors. The median household income was $51,939 in 2014. Yet with a few key strokes the Federal Reserve has created nearly $4 trillion in digital monetary credits since 2008. Naturally, we have some questions…
What does all this effortless money creation do to the value of honest work? Whence does the Fed get the money to giveth? To whom do they giveth the money to? These are the moral enquiries we delight in.
For there is something rather crude and disgusting about a system that relies on fraud to exist. If you hadn’t noticed, modern day economics and finance, as executed by central bankers, is an unadulterated fraud. Indirect theft’s integral to these wild and crazy money games.
But most people don’t seem to notice. Others look the other way. Some academic types construct theories to promote it.
Quite frankly, we are horrified by it. We can hardly believe what the Federal Reserve and Treasury are doing is legal to begin with. It’s certainly not ethical. Nonetheless, we know there will be grave and disastrous consequences for engaging in this sort of blanket larceny.
In short, there will be hell to pay for all of us. The great edifice of debt has been constructed on a faulty foundation of fraud. Just a minor financial tremor and the whole thing will rapidly cascade down upon itself.
Of course, the clever fellows at the Fed say modern monetary policy, primarily zero interest rate policy and quantitative easing, can ensure prosperity and round out the business cycle. But the experience has been the exact opposite of what they advertised. Here’s what we mean…
A dillweed, according to its common meaning, is someone that’s irrational and of low intelligence. Policies, like people, can also fall into the dillweed taxonomy. What’s more, when you combine dillweed individuals with dillweed policies, an entirely new dillweed classification can be created.
For example, several years ago former Federal Reserve Chairman Ben Bernanke – an economics PhD and history buff – used his academic underpinnings to move the world into the land of dillweed economics. Following Lehman Brothers’ ignoble disappearing act, Bernanke supposed we were heading smack into another Great Depression. Thus he panicked…and his subsequent dillweed actions – ZIRP and quantitative easing – now guarantee a much Greater Depression’s in our near future.
You see, entering the land of dillweed economics is much easier than exiting it. Terminating the Fed’s massive intervention and distortion of credit markets would send financial markets, and government budgets, into massive convulsions. Allowing Treasury rates to rise to meet market demand, not artificial Fed demand, would bankrupt the government and borrowers the world over.
Then, without all the funny money sloshing around the economy, the false demand that the cheap credit supports will disappear. Marginal jobs and marginal economic activities will vanish…along with social security, Medicare, and other transfer payment programs.
For in the land of dillweed economics further dillweed economic policies are what are needed to sustain things. The illusion that the commanders in power can turn water to wine must go on. There’s no way out. There can be no hesitation. Dillweed economics must be pursued to its inevitable bitter end.
Certainly we don’t like the predicament we are in. But there isn’t much that can be done to fix it without things first getting much worse. However, there are some things you can do on a personal level to help cushion the fall. Find out one unique opportunity here.
for Economic Prism
Pingback: Prepare for a Harder World