The ‘Fiscal Cliff’: where do they get all these non-issues?
While the self-declared ‘awakened’ claim victory through the ‘Internet Reformation’, the Money Power continues its relentless drive towards a long term global depression, setting the stage for the collapse of the American Empire. The West is to be ‘realigned’ to submit to deindustrialization and living standards comparable to that of the BRIC nations. The ‘Fiscal Cliff’ is just a good excuse to force through destructive austerity measures that will further the deflation in the economy.
The ‘Fiscal Cliff’ is a set of mandatory spending cuts and tax hikes if Congress does not raise the Government’s statutory spending limits. The debt ceiling will also have to be raised to allow the Government to borrow enough to finance its budget for 2013.
Of course, in itself this is not very exciting. But if the GOP folks do not work with the Democrats, the Government will be forced to cut spending drastically overnight. This would mean a substantial drop in demand in the domestic economy and economists expect a 3% decline in economic activity as a result, which would be pretty disastrous.
More important is the deficit that needs financing, which is projected to be about 1 trillion over 2013, or 5.5% of GDP. Is that deficit a problem?
Yes and no.
It’s a problem because it is caused by some truly insane spending.
Medicare is just a subsidy to the diabolical pharmaceutical cartel that is making trillions per year world wide with poisoning people with vaccinations, chemo therapy, radiation poisoning and many more terrors. It is killing as many as 760 thousand Americans per year in the process. Natural healing based on spiritual wholeness, diet, exercise and energy therapy would heal 99% of the sick at a fraction of the cost.
Worse still is the maintenance of the American Empire, costing about 1 trillion per year. The United States spends more on war and Imperialism (‘defense’) than China, Russia, France, Germany, Japan, Britain, Israel, India, Brazil and scores of other nations combined. Hence, presumably, the ongoing need to ‘rebuild America’s defenses’.
True, the Empire is far less lethal than allopathy, but it is an abomination nonetheless.
Furthermore, the Government pays 450 billion per year in debt service to the Chinese, the Japanese and the International Banking Cartel. While it could refinance the debt overnight interest-free and inflation-free via the Federal Reserve bank. Of course, that would damage the business case of Barclays, Bank of America, Citi Bank and others, who happen to own the Federal Reserve Bank.
But purely financially speaking, there is no problem. The Federal Reserve Bank buys up about 90% of whatever the Treasury is offering the Bond Market. There are no other buyers. The Asians are tired of America and the banks are not lending. This means that all new debt is financed interest-free. The Federal Reserve takes a very low interest rate on the Treasuries at the moment, and the Fed, since the sixties, pays back all profits it makes to the Government anyway, meaning any interest the Government pays is reimbursed.
This means that the Government can continue these deficits basically indefinitely.
But….but….musn’t our kids pay this debt back?
No, the debt will never be paid back, because it is our money supply. If we pay off the debt, we would lose our money supply. Furthermore, the problem is not debt, it’s Interest. Even Greece could pay off all its debts in 20 years if it used what it loses to debt service now to repay the debt.
If we ever chose to pay off the debt, we will simply print enough debt free money to pay it off. This would maintain the same money supply, but debt free.
True, all the serious looking pundits are now explaining for the umpteenth time that ‘everybody knows you cannot spend more than you take in’ and while they do not explain why they did not think of this before they incurred all the debts, this narrative does have a certain allure to the common man.
The problem, however, is that if the Government seriously diminishes spending this just feeds the deflationary spiral that we are already in: it would mean even less demand in the economy. For instance: the recent budget cuts of 16 billion that the Dutch Government recently promised, have been calculated to imply 12 billion less income for the State next year because of declining economic activity as a result of the cuts. It is the same nonsense that has destroyed Greece and Ireland. That’s the insanity on steroids that Ron Paul was selling as ‘the power of ideas’.
And inflation? Does all this borrowing not lead to rising prices?
Ah, yes. Inflation……
Throughout the 19th and 20th centuries the bankers have been scaring us with the inflation bogey man, hiding that money was and is actually scarce. And since the Money Power’s gold dealers took over the ‘Truth Movement’ (which they are now renaming the ‘End the Fed Movement’) through all the libertarian outlets masquerading as the ‘Alternative Media‘ they have been badgering us with the same drivel too.
To begin with: inflation does not mean ‘rising prices’, it means ‘a growing money supply’. A growing money supply can lead to rising prices, but rising prices can also be caused by other problems. Supply shocks for instance. Oil comes to mind when thinking of those.
Similarly, deflation means a declining money supply.
And the fact is: there is no inflation. We are in a crushing deflation. The money supply is crashing.
There is a massive deleveraging going on. People, both in the real and financial economy, are paying off debts, and every dollar repaid to the bank is a dollar less in circulation. That’s one of the implications of a debt based monetary system, after all.
Worse still: the velocity of circulation has imploded since the crunch started. This means that every dollar in circulation changes hands less often, making them less effective. A dollar spent twice finances 2 dollars of trade per year, if it goes around just once, it pays for only 1 dollar of trade. Have a look at the data on velocity below and try to grasp what this means for the economy:
As you can see velocity almost halved (!), meaning a slump of almost 50% in the ‘real money supply’, which is defined as money supply times velocity.
Don’t tell me prices are not rising!
Prices are not rising.
If you look at housing and financial assets, they’re all down big time since their peak in 2008.
However, prices for energy and food are rising, there is no doubt about that. This is not caused by inflation (a growing money supply) but by speculation by that special breed of Satan’s critters we call ‘speculators’. Billionaires, Hedge Funds and investment banks, driving up prices for commodities, especially oil and food. This is a double whammy for the economy: strapped for cash and credit, and rising prices in the primary sector (agriculture and mining) that eventually force their way throughout the economy. Oil prices are further pressured up by the Zionists in the Gulf of Hormuz, which just shows how elegantly the broader Money Power strategy comes together in its various projects.
This combination of depression through deflation (a crashing money supply) and rising prices through speculation in the primary sector is called ‘stagflation’ and we discussed it here some time back.
But aren’t the Fed supposed to be some soulless ghouls?
Of course they are.
But in the scenario under discussion, the Fed is just doing what one expects from a normally operating national bank.
The real depravity of the Federal Reserve Bank and the Cartel at large is shown in the astounding 16 trillion in easy credit it handed to hundreds of major international banks at close to zero rates in the aftermath of Lehman’s demise. Citigroup alone got a mind numbing 2,5 trillion in credit lines, only a small fraction of which apparently has been repaid since.
This is where the crime is and also where real inflationary pressures might come from, although much has gone to simply prop up busted balances, and thus not adding to the money supply.
The Money Power wants a massive, global depression. In Europe it’s organizing it through the Euro ‘Crisis’, ‘forcing’ the Governments into self defeating austerity, aggravating an already catastrophic deflationary nightmare. The United States is in a much better position, because the Federal Reserve is just buying up all the US debt for basically nothing. This, the ECB cannot do. Until recently, anyway, because it means Germany and the other northern nations are underwriting southern debt.
The ‘Fiscal Cliff’ hoax is exactly the kind of excuse they need to ‘look responsible’ while furthering the wider agenda. It’s completely bi-partisan. Whether you have a black democrat coke snorting, mass murdering sodomite banker stooge in the White House, or a white republican one does not matter.
Both are Goldman Sachs property.
At least Dubya was eligible…..
It does not matter whether they let the ‘cliff’ transpire, or whether they ‘compromise’ with drastic cuts for the coming year: the effect will be crashing demand in the economy, furthering depression.
They’re only bickering about the details. Whose voters will pick up the tab? The Democrats in California, or the Republicans in the South?
Eventually America will be busted in the Middle East and they will lose their petro-dollar based hegemony. This is when a new monetary system will be introduced. The only questions are how big the bang will be with which the US will go down and if the new system will be World Currency or the final preliminary one.
The ‘Fiscal Cliff’ is just one of those many non-issues facilitating the way forward.