The Fed Does Not Set Rates

Interest rates are set in the bond markets...generally Interest rates drop when money floods out of the equities markets and into the bond markets...The reverse has been happening since 2003...The FED/commercial banks just follow along and raise/lower their rates accordingly...The last time around prime at commercial banks went down to around 4%...this time around rates have to go lower than that to refinance everything...(do it again and sustain the cycle)

The time before Last in 1993...The Federal Funds rate at the FED hit 2.92% while prime hit 6%

Last time...The Federal Funds rate at the FED hit .98% while prime hit 4%

The volume required to sustain the system this last time was monumental...

This next time will require volume that has to make the last time (what we are in the tail end of) look insignificant.

Either this next time will be the final doomsday hyperinflationary blowout spike...or...the required volume to sustain a hyperinflationary blowout spike does not exist and the 1944 Bretton Woods global trade system will implode to oblivion...

The deflationary potential is so great that only massive inflation beyond what you all have experianced in your lives to date is needed to sustain inflation greater than previous inflation and the 1944 Bretton Woods global trade system any longer.


Governments are suppliers...the people of Zimbabwe are demanding the Government to supply them...In the beginning the Government decided that the white farmers were not needed and could be replaced with black farmers...Result? The farming sector collapsed and Zimbabwe transformed into a food importing zone from a food exporting zone...

The imported food was more expensive than the domestically produced goods causing a shortfall...Which was easily made up by going to commercial banks and requesting money to be manufactured to purchase it mark it up and sell it to the population...
Now what do you use Zimbabwe dollars to buy when there is no food being exported out of Zimbabwe to buy anymore?

Nothing...So there is no need to do business with Zimbabwe...Except you could buy Government issued bonds...but since that basically the only thing that you can buy with your excess Zimbabwe dollars the rate on the bonds is rapidly dropping making them worthless...In order for the Zimbabwe Government to keep the population from starving to death they have to borrow more and more Zimbabwe dollars at higher and higher rates or exporting food to Zimbabwe will become unprofitable and the exporters will have to eventually stop sending food to Zimbabwe.

The same thing is being done in the USA basically but with manufactured goods from China and Japan...etc...But the US dollar since 1944 has had the added benefit of being the world trade medium of exchange...So everyone in the world needs US Dollars if they want to trade globally within the 1944 Bretton Woods global trade system...Zimbabwe does not enjoy that benefit and needs US dollars to purchase all that they do import...

And since Zimbabwe is producing Zimbabwe dollars quicker than the demand for them...The US dollar becomes constantly stronger while the Zimbabwe dollars become constantly weaker.


So when you go to work (If you work) how would you like your employer to start paying you -$10.00 an hour?

The negative rates fairy tale is just that...A fairy tale introduced into the population to give people something to grasp on to...to avoid having to grasp reality.

FED does not set rates...the bond markets do...The FED just follows along...If the FED had the power to set rates...They would have set them in 1913 and been done with it.

And yes the US Dollar could become strong again...All the USA needs to do is spend the next 40 or so years transforming back into a net exporting zone from a net importing zone...

But all the zones consuming US Imports would eventually want to enjoy being exporters as well...so then...If everyone desires to be a net exporter...Who is going to be a net importer? Who is going to be master and who is going to be slave?

"Pax Americana (Latin: "American Peace") is a term to describe the period of relative peace in the Western world since the end of World War II in 1945, coinciding with the dominant military and economic position of the United States. It places the United States in the military and diplomatic role of a modern-day Roman Empire (see Pax Romana), succeeding the British Empire."

"Pax Britannica (Latin for "the British Peace", modelled after Pax Romana) refers to a period of British imperialism after the 1805 Battle of Trafalgar, which led to a period of overseas British expansionism. The term is derived from, during this period, Europe being relatively peaceful and the British Empire controlling most key naval trade routes and enjoying unchallenged sea power. Britain dominated overseas markets and managed to influence and almost dominate Chinese markets after the Opium Wars.

The Empire's strength was guaranteed by dominance of a Europe lacking in strong nation states, and the presence of the Royal Navy on all of the world's oceans and seas. In 1905, the Royal Navy was superior in strength to the next two largest navies combined (known as the 'two power rule'). It provided services such as suppression of piracy and slavery. Britain also went beyond the seas and developed and funded a universal mail system.

This led to the spread of the English language, parliamentary democracy, technology, the British Imperial system of measures, and rules for commodity markets based on English common law."

"The Pax Romana, or Roman Peace, is a Latin term referring to the Empire in its glorified prime. From the end of the Republican civil wars, beginning with the accession of Augustus in 27 BC, this era in Roman history lasted until 180 AD and the death of Marcus Aurelius. Though the use of the word 'Peace' may be a bit misleading, this period refers mainly to the great Romanization of the western world. The Roman legal system which forms the basis of many western court systems today brought law and order to the provinces. The Legions patrolled the borders with success, and though there were still many foreign wars, the internal empire was free from major invasion, piracy or social disorder on any grand scale. The empire, wracked with civil war for the last century of the Republic, and for years following the Pax Romana, was largely free of large scale power disputes. Only the year 69 AD, the so-called 'Year of the Four Emperors', following the fall of Nero and the Julio-Claudian line, interrupted nearly 200 years of civil order. Even this was only a minor hiccup in comparison to other eras. The arts and architecture flourished as well, along with commerce and the economy."

The Roman Empire did not fall...It's Global now...

Free trade is a Roman invention...

As soon as the USA became dependant upon others in far away places to produce it's socks and underwear...

The USA as a soverign nation state was game over.


Consumers request commercial banks to manufacture money...Consumers then spend it into the economic system...

Governments issue bonds and borrow the money that the consumers spent into the economic system from the economic system...

Since the USA became the USA consumers have requested the commercial banks operating within the USA to manufacture around 45 Trillion dollars to spend into the economic system of the USA...and of that 45 Trillion dollars the US Government has "borrowed" around 8.8 Trillion dollars of it...with the majority of what it's "borrowed" spent back into the US economic system.

Even if the US Government began spending less than it took in and began paying off what it's borrowed from the economic system of the USA...the consumers would still owe 45 Trillion dollars reguardless.

Collateral? You are all collateral...either you slaves are productive (valuable/positive yielding)

or you are not...(valueless/negative yielding)

Please can I have some money?

Do you have any collateral?

Sure...

I have 100 slaves...er...employees that require an investment of $100 a day to sustain and they yield $200 a day revenue each...or $50,000 a week with a yield of $100,000 a week minus $50,000 for a $50,000 a week profit...

That's $200,000 a month...I have about $100,000 free to blow as I see fit after that...

But I want to live in a castle like a King and I need around 20 Million dollars to build it...think you can help me out?

Well...We'll work the numbers and look over the rest of the paperwork...I'm sure we can work something out...

Hows tomorrow 10 ish...

Great...Thanks.