The fake money system has given the world two things that it lacked beforehand: huge demand coming from credit-rich consumers, and a huge supply of capital, coming from the same source. – The financial industry created this bubble by lending the Central Banks’ fake money. Money that no one ever earned or saved, to people who had no business borrowing it, so they could buy overpriced homes they couldn’t afford. Then, after the inevitable blow-up in 2008, insiders bought the homes that had been heavily discounted by the blow-up they had helped to cause.
Nevertheless, the fix was triggered. Central Banks brought forth several rounds of QE-stimulus, quashed interest rates, keeping them down until the sector was fully reflated. To put this into perspective: The Case-Shiller Home Price Indices, show home prices went up about 30% over the last six years.
Interest rates are the price of money. Like all prices, they should be set by the market in order to accurately convey information about economic conditions. When the Central Banks lower interest rates, they distort those signals. This leads investors and businesses to misjudge the true state of the economy, resulting in misallocations of resources. These misallocations can create an economic boom. However, since the boom is rooted in misperceptions of the true state of the economy, it cannot last. Eventually, the Federal Reserve-created bubble bursts, will result in a recession.
The Central Banksters easy credit money policy has already killed the consumer figuratively and can be seen as the main cause of today’s crisis. The unparalleled ocean of artificial liquidity would surely lessen the effect of this recession, was the belief; the unplanned consequences of these policies is inflation, followed by stagflation, which will eventually wipe out the last bit of savings of people that were able to hold onto that last bit of security. In other words; the Central Bank’s power to affect the economy has now been greatly reduced. They have hit the proverbial wall and the people are headed to the edge of the economic fiat money cliff.
The economy is controlled by the issuance of fake money
The central bankers inflate; they have to keep inflating or the show comes to an end. The increasing money supply causes confusion, mistakes, and disasters. Inflation has already done trillions of dollars’ worth of damage to the economy. And if the picture that is emerging is correct, this is only be the beginning.
The world economy is controlled by the issuance of fake money. By controlling the issuance of money, the Rothschilds control the entire world economy. They can expand it or crash it at will. The depression that began in 2008 was yet another Rothschild creation, to further their agenda of centralised global finance and to introduce the long-planned world central bank.
The Federal Reserve, responding to concerns about the economy and the stock market, and perhaps to criticisms by President Trump, recently changed course on interest rates by cutting its “benchmark” rate from 2.25% to 2%. President Trump responded to the cut in already historically low rates, by attacking the Fed for not committing to future rate cuts.
Doing the same old thing and expecting different results
The Fed chair Jay Powell and European Central Bank president, Mario Draghi, both affirmed their resolve to provide more stimulus in the months ahead. In other words, the guardians of the world’s most important measures of value, said they would lend more fake money at even more fake interest rates. This, of course, caused disturbances in the financial markets. Investors are pretty sure that an already crazy situation is going to become even crazier in the future. And probably, they are right.
The Fed’s actions are a textbook example of the popular definition of insanity: doing the same old thing over and over again and expecting different results. After the 2008 market meltdown, the Fed launched an unprecedented policy of near-zero interest rates and “quantitative easing.” Both failed to produce real economic growth.
The latest rate cut is unlikely to increase growth or avert a major economic crisis. It is not a coincidence that the Fed’s rate cut came along with Congress passing a two-year budget deal that increases the already $22-trillion-dollar national debt and suspends the debt ceiling. The increase in government debt puts pressure on the Fed to keep interest rates artificially low, so the federal government’s interest payments do not increase to unsustainable levels.
The economy peaked at the turn of the century. Since then, as measured in the most reliable money mankind has ever known, gold, the blossom of its industrial wealth, the Dow 30, has been cut in half.
The global economy has been disturbingly twisted by fake-money financialization. Society and government have similarly been perverted and corrupted by its fake-money-financed elite. And now, the fading light of late summer falls on an aging, degenerate empire; like a fallen apple, it sits on the ground dreaming of springtime.
The common perception is that President Trump may be a bit unhinged, but he’s basically a man who understands money. – Recall that he was elected to Make America Great Again. The “again” part suggests that it isn’t so great now! And he was right. By almost every measure, the U.S. has lost ground in the 21st century, declining in almost every domain.
This decline was dismissed by Hillary Clinton, who countered this, saying that “America is still great.” But the decline was felt in the heartland, particularly by the average person. “Breadwinner jobs” in the factories were disappearing. Women moved fairly swiftly into the offices and coffee shops in the big cities. But men were often excluded from job opportunities.
The financialised economy
Today, there are said to be some 100 million adults without jobs. Many of them are comfortably retired. But some are simply marginalised, unable to find work in the financialised economy and the politically correct culture of 21st-century America.
These were the evils that President Trump was elected to fix. But they are not technical problems, Trump cannot simply push down on the lower-rate lever, or turn the tax-cut knob. Nor can he go to war with the Chinese, Mexicans, Democrats, the press or the Fed and expect any significant improvements. No, America’s problems are self-inflicted. It turned against its own principles of balanced budgets, honest money, and small government. Now, these disregarded principles have turned against the nation.
But let’s look at how Trump has done so far. Generally, what can be perceived is an central bank economy that has more or less continued to fumble along as it did during the Obama years. Final retail sales numbers, being a reliable measure of consumer health, have gone down compared to the last few months of the Obama era.
The number of jobs added is also lower than it was in the later Obama years. GDP growth got a temporary boost from the tax cut, but has fallen back to Obama levels or lower. In other words, the economy as a whole has not improved. But the price paid to keep it from changing is higher than ever.
Under Obama, federal spending rose at 2% per year. Now, it is rising at more than 4% per year. No president since Lyndon Johnson has dared to increase spending so wildly. And in Lyndon Johnson’s era, the economy was growing at 4% or higher. Today, GDP growth is only at half that level.
The only way the feds can keep spending so much money now is by borrowing. Just three weeks ago, Nancy Pelosi and Donald Trump concluded an act of bipartisan treachery — agreeing to do away with the debt ceiling. Now, the sky’s the limit. And already, the feds are reaching for the stars. In the last month, the federal government has been borrowing at the rate of $4.5 billion per day.
The big question, though, is this: Would a Fed rate cut — or even multiple rate cuts over the next several months — really matter? Borrowing rates are already historically low. Few analysts think that reducing them a bit further would do much to revive the economy’s areas of weakness — from sluggish factories, to a tepid housing market, to anxious consumers, to uncertainty among company CEO’s about how to respond to Trump’s mercurial trade policies.
Fake-Money bubble will burst
Almost all major countries are stuck. They’ve all built their economies on fake money and phony interest rates. Soon, they’ll all be competing to debase their currencies to keep the fake money flowing and the whole useless exercise is going nowhere.
Private central banks are issuing the public currency as a loan at interest. This is why today every nation is drowning in intentionally-created, unnecessary debt, with the sinister purpose of enslaving every person on the planet to the private bankers. That is the reason for the ever-increasing taxes and the decreasing benefits; so that we are in the position to pay the bankers their unpayable interest on the public currency issued in the form of loans.
For the enslavement to succeed, peoples’ rights and freedoms to refuse the bank’s interest-bearing money have been stripped away. Deep State-controlled governments force their populaces to use the private central bank’s currency, loaned to people at interest, via the Legal Tender Laws. Herein lies the secret to the chains of your enslavement. People are ordered by the government, at the risk of being thrown into jail, to use the banker’s fake money, and to pay the interest charged by the bankers through, for example, taxes.
Let Mr. Market set prices and interest rates
Meanwhile, the Central Banks attempt to “prime the pump” via new money creation, restarting the whole boom-and-bust cycle. – This is not to say that no one would experience economic difficulties in a free market. Businesses and even whole industries could still potentially close because of changing consumer tastes, new competitors offering superior products, or bad business decisions. Bubbles may even occur in a free market economy, as some investors misinterpret trends to represent permanent changes in consumer preferences. But periods of downturn would be shorter, and most would only affect specific industries, rather than the entire economy.
Central Bankers, rather than do the right thing, by allowing Mr. Market to set prices and interest rates, keep repeating their old tune, in the expectation of getting better results; the very definition of insanity. Faced with the next crisis, all central banks are going to do what everyone expects them to do. They’ll turn the screws on savers, tighter than ever. They’ll buy bonds and force interest rates down; all to keep the fake money pumping into the bubble markets.
Central Banks’ ability to manage the unmanageable — a monetary system based solely on fiat currency, together with Trump’s continuous Fed bashing, is signalling the erosion of trust in and respect for the Fed, that is also evident by the interest in cryptocurrency, the passing of the Audit the Fed bill, and the passing of state laws re-legalising gold and silver, which are now both once again recognised as being legal tender. There is no doubt people are witnessing the last days of, not just the Federal Reserve and Central Banks in general, but the entire fiat debt-money concept, as well as the welfare-warfare system. Those who know the truth must do all they can to ensure that the crisis results in the return to the constitutional republic of America, the ending of the EU, true free markets, sound money and a geopolitical status of peace, with free trade policies.
False money, phony interest rates gives fake capital
But instead of even trying to understand the real challenge, the Central Banks make the problem worse. They are competent in their incompetency; immersing we, the people into a deliberate state of suffering, simply to fill their own pockets with our hard-earned money. Like the communist leaders in China, they pretend to stimulate, manage, and improve the economy. But the typical politician knows no more about economics than the typical communist. Perhaps even less. So, instead of letting capitalism do its work, the Central Banks undermine it with fake money, phony interest rates and fake capital.
Capitalism needs real capital; meaning savings. But the geniuses at the Central Banks have been punishing saving and rewarding debt, which is anti-capital, for at least the last 20 years. That’s why growth rates are falling and almost all the new jobs created in the last 20 years are in the low-wage, low-productivity, service sector, rather than high-value-added manufacturing.
Thanks to the profuse accumulation by the central banks of Europe and Japan, roughly 25% of all outstanding government debt now trades with a negative yield. This includes half of all European sovereign debt; 85% of Germany’s debt, and as of last week, all of Switzerland’s outstanding debt. That’s right, the entire Swiss government bond market – ranging from maturities of one month, all the way out to 50 years – now trades with a negative yield.
Even worse, we’re now seeing yields on some European high-yield corporate (or “junk”) bonds begin to dip into negative territory. This is complete and utter madness. After all, there are nocredible reasons why some banks and funds might choose to hold negative-yielding sovereign debt.
NIRP has helped drive up the prices of many financial assets. Along with quantitative easing (“QE”) and other central bank phony stimulus programs, it has been rendered next to impossible for income investors to earn a decent return on their savings today.
But as long-time FWC-readers may recall, when NIRP first took hold long ago, the greatest fear was that banks would begin to pass negative rates along to customers directly.
In other words, instead of being paid to save capital, individuals like you and me would be forced to pay just to keep the money we’ve already earned. And this could easily trigger a massive, global “run on the banks” as people rush to withdraw as much currency as possible to avoid these penalties.
So far, banks have borne the brunt of the negative consequences to date. The European banking system in particular – which was already struggling to recover from the euro crisis earlier this decade – has been decimated by NIRP. Yet, despite their struggles, most banks have still been reluctant to pass the costs of negative interest rates along to individual depositors, but rumours are spreading that this could soon happen. From the first of October next, Dutch banks are going to charge customers when they collect their own money via the banks’ ATM cash dispensers.
Fake money has destroyed real capital, created chaos in the markets, caused trillions in malinvestments, slowed down growth and resulted in appalling inequality. It has also corrupted the government; the central banks use it to avoid making hard — but necessary — decisions. Fake money finances their fake wars, rewards lobbyists, campaign donors, crony contractors, buys politicians and people in authority, it has added more than $10 trillion in additional debt in the last 10 years.
And with so much cheap credit available, not a single politician even suggests balancing the budget or curtailing wasteful spending. Why make tough choices when you get free money in your pocket?
For example, Switzerland and Germany are actually “getting paid” to borrow, Mr. Trump concluded at the G7 in France. But ordinary people only get free money when the fix is in. And the fix won’t stay fixed forever. Today’s rigged-up bond bubble will be no exception. When will it pop? How?
It would be nice to meeting the person who knows the answers to those questions. In the meantime, we wait, we watch, and try to connect the dots. And wonder: What really
Measured in gold, for the last 20 years the world has been in a bear market
Measured in gold, the Dow has been in a bear market for the last 20 years. Stocks have never returned to their 1999 highs. From 40 ounces to the Dow in 2000, the price of the Dow stocks — again, in gold terms — fell to just seven ounces in 2011. Then, there was the initiation and implementation of a powerful, criminally manipulated counter-trend.
But measured in gold, what is seen is something different. Instead of a new bull market, there is a classic bear market bounce — with the Dow-to-Gold ratio (aka the Greed/Fear index) rising, from 22 September 2018. In other words, the Dow never rose to new highs at all, not in gold terms; it merely retraced a bit more than 50% of its losses.
And since then, it has come down again, with all the hogwash, fraud and foolishness on the loose, but now the smart money is turning to gold for protection.
The precious metal rose as much as 1.2% to $1,502.30 an ounce on the Comex (metals exchange), the highest level since 2013. The move extends this year’s rise to 17%, with gains underpinned by inflows into exchange-traded funds. Silver has also surged.
Could it be that FWC was right all along? The run-up in stocks was not a genuine bull market. It was a fake-out, with prices manipulated by the Central Banks, as they can never stop a correction. But they can delay, distort, and disguise it. And they can sure make a gold-bug look stupid.
Soon, the world is expected to return to the gold standard, probably by mid-September. Once this happens, the Federal Reserve and all other central banks will become obsolete, while the IMF will announce a global gold treaty, calling on all countries to return to the gold standard. Then, the implementation of the New – Gold-backed – Financial System QFS will be operational. Fiat money will be completely obliterated over time. This will be the first phase of the GESARA agenda.
Meanwhile, gold achieved what it had failed to do for years. It staged a major breakout, jumping double digits in less than two months. The price of gold jumped 7.3% in a two-week stretch. Since gold blasted above $1,400 an ounce in June, the metal has been in a clearly defined uptrend. Unfortunately, most people have a hard time believing the trend is so powerful. However, the numbers prove it in this case. Both silver and gold have been rocketing higher over the past few weeks. It’s just the beginning. Don’t let this opportunity slip; Now’s the time to purchase both metals, if you haven’t already. Big gains for gold and silver are likely to continue, as historical trends show that Gold could easily see another 19% gain over the next year.