Monday, October 19, 2009

Not Since The 1930's...

The bottom supports the top.

All the money the top pays the bottom to support them comes from the bottom...If the yield rate drops...the bottom has to suffer the cuts...and as the bottom is cut the yield rates drop more and more.

It's the end of the line folks...the top takes more than they give from the bottom while the bottom gives more than they take.

The top has taken all that can be and the bottom has nothing more to over.

The recent price increases are the result of the top attempting to obtain the required yield.

It's like a rider...the top...and a horse...the bottom...The rider has been whipping the horse to sustain top speed...the past 65 the point that the horse has become's slowed...over the past 2 years...and now stopped.

The top has dismounted and is basically whipping the horse now but it won't budge...The rider is going to whip the horse to death.

The rider will then blame the horse.

The Government will make a new rule making it illegal for exhausted horses to stop galloping at full speed...problem solved.

The horses will still stop when they become exhausted...and the riders will continue to whip them to death.

Like they have been doing for 1000's of years now.

All money is fiat or by decree. Money was a tool created by those rich in power to more easily account for the power you all owe them.

Tell me why a farmer would slave in his field growing food all year to exchange it all for a a few ounces of gold which you panned in a couple of weeks. Why would a farmer spend a year to grow and then trade enough food to feed many families for years for a couple ounces of yellow metal?

The cause of the crunch is that consumers have reached the point that they can no longer request the commercial banks to manufacture more and more new money...

Inflation greater than previous inflation to maximum potential becomes inflation less than previous inflation to maximum potential once the maximum potential of inflation greater than previous inflation is reached.

It's a wave...On the way up consumers are forced to request more and more and more and on the way down consumers are forced to request less and less and less.

The FEDERAL RESERVE is not expanding or contracting the money supply...They just claim to and all the oblivious morons that have no idea how the system works are basically forced to believe the claims.

It's like a magic show...You all don't know the trick so ultimately all you see is the rabbit popping out of thin air out of a hat.

The growth of the US money supply stopped last quarter...So demand for the US Dollar has to drop quicker than the supply shrinks or the US Dollar is going to gain against other currencies.


They threw over 50 million people out of work when the US consumer caved in.

Their economy is based on export to the rest of the world...The USA makes up over 25% of the rest of the world and the other economies either have the USA as the largest consumer of their exports or the largest consumer of their exports has the USA as the largest consumer of their imports so without the consumers of the USA...they along with the rest of the world are toast...their economy implodes without massive imports of inflation from the rest of the world with the USA the engine of global inflation grinding to a halt.

Remember the stimulus in the USA..guess what? All of the G20 threw the kitchen sink at their economies as well...

Canada was producing a surplus and paying down public debt for the past 12 years and that was all wiped out in a couple months.

The largest coordinated Government intervention in the global economy in history.

Trillions globally bought a few months.

Ultimately the only way for the US Dollar to collapse in value relative to the rest of the currencies of the world is if it's produced in greater quantity than all the rest.

The current drop was due to the glut of oil on the market from a global economy that has slowed its growth by the greatest amount in 65 years.

What you all fail to realize is that the US Dollar was made the global trade medium of exchange in 1944...The USA and its consumers became the demand....the rest of the world the supply.

Over the past 65 years the rest of the world has become more and more dependant upon the consumers of the USA gobbling up the supply.

The US dollar caves and that drives up the cost of Chinese imports...once American consumers can't afford to buy Chinese exports...Poof China blows out like a candle.

Their communist dominated banking system requires massive imports of inflation to prop it up...without that...China's banking system implodes to oblivion...It's run worse than the US banking system aand has more non-performing debt than the Japanese banking system...when the music stops in China...there will be no chairs.

Sorry but China is not coming to the rescue.

The British pound was the previous global trade medium of exchange of the global trade system that collapsed...It was inflating China in the 1920's...until the global trade system collapsed 1929-1933 and the flow of pounds into China stopped.

China imploded to oblivion and did not rejoin the global trade system until the 1980's when China was opened up to absorb massive amounts of US exported consumer debt inflation that has "puffed" China up into what it is today.

Stop that and China caves in...

China is in almost the same position as Japan before they overdosed on imports of inflation and popped in 1989.

But this time around there is not going to be a recovery or further jiggering of the system or new rules.

Without a consumer able and willing to consume better than the US consumer did the past 65's the end of the line...Just like in 1929-1933 followed by the 1933-1945 bankruptcy reorganization of the Global economy.

Now for reality.

The national debt or public debt is the amount of money the US Government has borrowed from the money supply of the USA.

To the penny currently it's 11,908,351,334,548.00

11.91 Trillion Dollars.

The total money supply of the USA?

The Federal Reserve calls the money supply of 52.8 Trillion Dollars...Total credit market debt.


Because its all debt.

In 1944 The total credit market debt of the USA was 355 Billion Dollars

The national debt or public debt was 201 Billion Dollars

Meaning that the US government had borrowed by issuing bonds...56% of the money supply of the USA.

Currently 11.9 Trillion Dollars is only 22% of the total money supply of 52.8 Trillion Dollars.

basically since 1944 US consumers have requested the comemrcial banking system in the USA to manufacture 52.45 Trillion Dollars of new money.

banks ran out of money to lend centuries ago...well since rich people own all they money...they ran out of money to lend to all the poor people so that they could continue paying the interest due on all the money they previously borrowed from the rich people.

What to do?

Issue credit...Create IOU's to pay the rent due on IOU's

All the money in circulation is debt with interest attached...the cost to service this debt...or to pay the top the rent due on the money supply your ancestors borrowed centuries ago in Europe?

Is hidden in the cost of everything.

Of course since 1944 to now the US Federal Government has "borrowed" 11.7 Trillion Dollars of the 52.8 Trillion dollar money supply the consumers of the USA requested the commercial banking system to manufacture.

There are about 150 Million workers in the USA...They are the ones that have an income and can actually pay teh rent due.

That means that each worker in the USA owes around 352,000 Dollars and lets say at an average interest rate of 5% the yearly interest per worker is around $17,600 per year.

Consumers of course request more money than is needed to just pay interest...the average growth rate or compounding interest rate of the money supply since 1944 is 7.99 to 8%

Every time a consumer goes to a bank for a loan or swipes a credit card...the total debt of the USA/money supply increases by that amount.

Every consumer in the world...because the exact same system in operation in the USA is in operation in every country on Earth...

It's been like this now for over 300 years.

The top invented money and owns it all...the bottom rents it.

But not to worry.

This last quarter for the first time in 7 decades the total credit market debt stopped contracted by 200 Billion Dollars.

Because after over 65 years of requesting commercial banks to manufacture more and more and more new money to pay the rent on all the previously requested money...US consumer are maxed out.

They have reached the point where they owe so much that they can't request more and more and more...they are forced to request less and less and less.

The roaring 6 decades are coming to an end.

Why is the US public dbet increasing so quickly lately?

Because the Federal Government is trying to pick up where the US consumers have left off...

Like trying to whip an exhausted horse into a full gallop...that has just spent the last 65 years running at a full gallop.

At the peak in 2007 US consumers were requesting the commercial banking system to create almost 6 Billion dollars of new money aka credit aka debt a day to sustain the USA and global economic system.

Last quarter US consumers requested the commercial banking system to create -200 Billion dollars.

Negative 200 billion dollars...or basically zero new money...whip the horse to death...

This has not happened since the 1930's.

The last time US consumers reached the point where they could no longer request more and more new money to be created to sustain whatever it is you all think you are sustaining day in and day out generation after generation...

Even more great news...There is not anything that can be done to stop the inevitable implosion of the compounding or exponential growth system.

We are basically at the point now where we just crumble down to oblivion or hyperinflate in a last desperate and pathetic attempt to sustain inflation a bit longer and then hyperdeflate to oblivion.

Oh it was all going great...the recession was ending...bla bla bla...and then...insert scapegoat here....happened.