Monday, August 06, 2007
More Hypertiger
Fed does not cut rates...consumers do...when consumers become desperate they accelerate their requests for commercial banks to manufacture money...this surge hits the bond markets causing the bonds to be bid up in price but down in yield...and the bond markets set rates...the FED cuts or raises rates based on the bonds...
When consumers become exausted...they decelerate their requests...the result is bonds being bid lower and yields higher...consumers have been decelerating since 2003 from their 2001 to 2003 desperation phase...
It's why housing and the economy in general is slowing down...Consumers are becoming exausted...There's a limit...consumers eventually consume their ability to consume more and more and more and are forced to consume less and less...
The belief that the fed can raise and lower rates...is a myth...That Jimmy jones cramer...and all of you...in fact most of the people believe is truth...
It's not...
You all believe the FED is a cause when it fact it's only an effect...
Which is good...because when push comes to shove and the top has to give you what you want because there are no other options...they will sell you the torches to burn it down...and later will sell you the hammers and nails to gleefully construct the next nightmare you all will choose to believe is a dream come true...
After all...the federal reserve is the third central bank of the USA...signed into existance by President Woodrow Wilson...
The first was approved by President George Washington...
The FED policy appeared to change in 2004 but short rates began to rise in 2003...where consumers began to slow down...The FED is forced to raise and lower rates based on the bond markets...and consumer consumption drives the bond markets and ultimately interest rates...
The guy obviously does not know how the current monetary system or economy operates...
And a switch back to an economy that is based on pay as you go from buy now pay later would eliminate billions of people...most of you would either have to be left to starve to death or be euthanized...
Guy came to my door...Asking if I could sponsor a child in the third world...He showed me a picture of what a community will look like after all the money is sent...Well I said...You are not educating them to create a credit system like ours...All they will be able to accomplish is become our oblivious slaves...
Like really...they want me to send money to them so that they can get development loans to construct infrastructure...
And the end result has to turn a profit to service the loans...great...a whole bunch of people in one country slaving and dying to support a whole bunch of other people in this country sitting on deck chairs by the pool...
And you want me to pay for that? In the schools you build over there...you are not going to teach them about how the system actually functions...especially the monetary/credit system...How do I know this? Because our educational institutions don't either...
Dr Frank Shostak is a product of this system and he's an oblivious drone...Yes far more articulate than the product of a dirt floor institution in the third world but basically just as brain dead...
Because if new arrivals to planet Earth were actually taught how the system operates...they would see that it's inevitably doomed to inflate to maximum potential and implode...They all would demand it to be changed...The people sitting in deck chairs by the pool would not like that at all...They think the system operates wonderfully...
There is no proper way to defend a credit system...They are all ultimately undefendable...There is never a lasting victory over lies and the war against truth has no exit strategy and always ends in defeat...
And while a central banks claim to raise and lower interest rates...they don't...Consumers dictate the rise and fall of rates...when consumers accelerate their demands for money to be manufactured by commercial banks (desperation)...rates fall and when consumers deccelerate their demands for money to be manufactured by commercial banks (exhaustion)...rates rise...
Consumer demands for money to be manufactured by commercial banks in the USA have been deccelerating since 2003...It does not take much...a 1% drop in the growth rate of the total money supply is more than enough to cause rates to begin rising...
Lets say you have 1 million dollars...and lets say you don't want to work for a living...well then you have two options...spend your million dollars until it's all gone or lend it out and live off the yield...well if no one is willing to borrow your money at 10%/year...You will have to drop your rates...Or you already are living off of everyone else but notice that the current yield is not enough to sustain you...so then you have to raise rates...
It's all based on consumers...If no one is willing to pay for higher rates then they have to drop and if those that are paying are not paying enough then you have to raise rates...
But you will eventually reach the point where no one is able to pay at the lowest rate possible and will not be able to pay higher rates...Then it's game over...
Those that live off of everyone else are forced to liquidate and cut back...
And we are close...closer every day...like a ticking time bomb...you can hear the ticking...you can't see exactally how long until it detonates...It will just keep ticking until...wham...jigs up....like Sept 11...
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