The necessity of a Free Market for each individual economic actor
An economy is geared to produce for real demand. But for decades it has been misled by artificially low interest rates to produce for a level of demand that doesn’t in reality exist. This deception can go on for a very long time. But, eventually, some form of adjustment must take place – usually a recession restores order by reducing both production and consumption. If it goes on for too long, or to a too great an extent, as it did in Germany in the late ’20s, economic activity becomes disorganised, which actually started The Great Depression 1.0.
The stimulus is working, they said. The problem is not that anyone believes this, but just that everyone believes in it. It is duped group thinking on a massive scale. Markets are not mathematical, nor mechanical; they’re ethical. Their purpose is not to make people wealthy, but to make them wise. If they purely were mathematical, one would be able to anticipate price movements with computers and PhDs in math. Many have tried it, but so far as known none has ever really succeeded.
It’s not a mechanical system either. When prices go down, there are no levers that can be pulled, or injectors that can be activated. It’s not that simple. Instead, markets are complex natural systems they can never really be controlled or predicted. Markets are always teaching or correcting something. To eventually find their natural equilibrium. Those are the moral lessons in the broadest sense.
The purpose of a bear market, like the 2007/8 is to correct the errors of the preceding boom called bull market of before Aug. 2007. Most prominent among those errors is to think that money can be made by speculation. When this idea is successful for a while, good sense is lost. People bought dotcoms with no business plan, and houses not to be lived in. When people don’t want anymore be involved with this matter, the market has changed which can take a long while.
People of all nations around the world will discover that the solution will not be found in more government control over society, but through an increase in human liberty and freedom for the individual economic actor.
Applied Market Interventions are a Distortion
And, this is correct; all the interventions from central banks over the last half a century have made matters worse. If, Governments could have acted as they should have done, their duty is to protect their own citizens and keep their hands of the economy, which is regulated by the market. The moment intervention is applied a distortion is created and opportunities are created for the Elite to steal taxpayer’s money, it becomes a Casino where everyone tries his luck but in this event Banks’ executives play not with their own money but that of clients and taxpayers.
All these interventions are distorting the market and create either deflation or inflation, which both are bad for the market economy. But what is observed is bad all over, bad inflation, and bad deflation. It is the result of monetary mismanagement. And it is going to send all the wrong signals and inevitably makes things worse.
First, the deflation is bad because it is the result of a massive de-leveraging – paying down debt accompanied by a write-down of debt and assets. This technically is called a depression, or a major recession, or a ‘great contraction.’ Call it what you like. It’s a deflation in which prices fall. Followed by bad inflation that is caused by the central banks printing too much money. This inflation is very bad because it is an increase in the quantity of paper money, without an increase in real demand, or goods.
Implicating higher government’s debt and deficits making it impossible to pay these down honestly. Eventually, the central banks reach the point of no return where they are trapped as is the case today, without a way out. Then, another crisis will follow, either in the form of default, or hyperinflation, or both.
Conclusion; any kind of monetary intervention in a market economy is bad. Neither the ideas of Friedman or Keynes are good, but the approach from Friedrich von Hayek expresses a thoughtful attitude towards monetary intervention. “Interventions on a massive scale as happens at present are the worst enemy of the economy only temporarily intervention on a limited scale sometimes can be helpful”.
Recent Economic history the world went through
Since the end of WW2 the economy was in continuous expansion. At first, there was a healthy expansion. Consumers had built up savings during and after WWII. They were ready to get back to work in the consumer economy and spend their money. In that period the USA was world’s leading lender, leading exporter, and leading in manufacturing, in short leading in everything.
In 1971, under the Nixon administration the gold backing for the US-dollar, and also world’s reserve currency, was abolished. During the 1980s, the US turned from a net creditor into a net debtor to the rest of the world. By the 1990s, consumers were spending more than they earned and stopped saving at the turn of the century. Consumers became depending on the savings of the people in Japan and China that created a consumption economy with a flood of credit that on its turn culminated to living beyond their means. Consumers became addicted to accumulate more debt. As a result, the financial industry expanded in an incredible manner, finally culminating in the financial crisis of 2007/8.
But nowadays it is different. The central banks have responded with zero interest rates, pumped over $20 trillion worth of bailouts and boondoggles in the market, with no avail being able to repeat the ‘old magic’ of growth stimulus. Because, consumers do have too much of everything and don’t have the extra cash available to pay for additional purchases. They have no other choice left than to cut back on everything.
What would happen if you optimise every available credit source over the last year? Your rate of consumption had soared, you’d placed great demands on the economy and, eventually, your needs slowly decline. You’re left with few desires, but a lot of debts. You’d stop buying anything for a long time, until you were able to repair your balance sheet.
A high rate of debt growth, by itself, is not necessarily a problem. If these funds are invested wisely, if they spur new economic opportunities, then, as a percentage of national debt, these debts could remain profitable. But that’s not what has happened.
Instead, since the 1960s, each new dollar of debt has added less value to economic growth. This indicates the economy is suffering from systematic declining returns. Today, each new dollar/euro of debt adds about 0.54 to economic growth – assuming the economy is growing at 2.5% a year – which is not the case as we already know, because of much higher real inflations as officially is published.
Debt based spending doesn’t increase wealth
The vast majority of the debts added in the 1990s were used to fuel massive financial speculation in corporations, on houses, and home mortgages. As these financial assets begin to deflate, the debt remains, causing the debt to loom higher and higher as a percentage of assets. “Total debt, as a percentage of GDP, has grown in the U.S. from around 150% in 1982 to nearly 300% today,” – in the EU it won’t be much different.
The whole idea of debt is to boost spending and corporate profits by increased demand. But, everyone knows you can’t really become richer by spending. While consumptive spending is the least efficient and effective spending of all. So central bankers spend it themselves. And people get what they want: boondoggle wars, vote-buying giveaways, and bonuses for incompetent bankers.
The current economic boom is built on debt, and the debt-based economy is facilitated by the Federal Reserve’s easy money policies. The massive amount of debt held by consumers, businesses, and especially government is the main reason the Fed feels compelled to maintain historically low interest rates. If rates were to increase to market levels, government interest payments would make the economic situation unstable. This would cause the government debt bubble to burst, leading to a major crisis. However, continuing on the current path of low interest rates will inevitably lead to a dollar crisis and a collapse of the Keynesian welfare-system.
Continuing to waste billions on wars abroad and failed programs at home while pretending that we can avoid a crisis via phony cuts and Fed-fuelled growth will only make the inevitable collapse more painful. The only way to avoid economic disaster is to cut spending and to audit and abolish the Federal Reserve and all Central Banks.
Any attempt for revival by pumping additional money in the economy will only initiates inflation and worsen future economic outlook. Debt and speculation at this moment of time are characteristics of the past and don’t apply anymore.
Currently we have entered in the reversal of the economic expanding cycle that is called contraction. (See attached graph). This implicates less consumption, less debt and more savings. And under such conditions the economy turns into depression.
Don’t expect a healthy new boom, the world is witnessing a sick echo of the old one. Governments, led by the attempt to re-inflate the bubble with guarantees and giveaways equalling to an entire year’s annual output of the world’s largest economy. Since every penny of this money is borrowed, it makes sense that every penny will have to be withdrawn from the world economy at some point.
Global WTO-Trade about to collapse
Since the end of World War II international trade has been functioning on the US Dollar as the world’s main reserve currency. The 2008 bankruptcy of the fiat US Dollar has resulted in unstable Global Markets, that are about to collapse. In the year 2008 the BRICS Alliance was formed – Brazil, Russia, India, China, South Africa – with the purpose of doing a Global Currency Reset – GCR.
Economists have made it clear that the only event that could save the Markets is a GCR which would place gold/asset-backed currencies of participating 209 nations at parity with each other. The GCR would naturally be accompanied by a Debt Jubilee that would zero out debt, much of which is contained in bank derivatives including mortgages.
Great opposition has occurred to having the GCR implemented. Since it would necessitate taking US Taxpayer dollars away from the private Central Bankers, read the Rothschilds, Rockefellers, c.s. political elites in US Inc. Including the British Crown and Vatican – nowadays better known as the Deep State who presently own and run the Global Monetary System. Implicating; giving the power and stolen money back to The People. In other words, every country and the US would need to return to the powers engrained in their original Constitution, and restore the US-Republic.
The brand new people’s economy
This is the reason why President Trump and the Patriots are building a brand new economic system the people’s economy to destroying the central bank economy the world is in since at least 1913.
The peoples’ economy is not based on debt money created out of thin air with interest attached to be paid by the taxpayers with the purpose to enslaving everyone. This new economy is build on sound asset backed money without usury attached.
In the central bank economy; Money is pocketed by the Rothschild central banks to be accumulated in their secret accounts at the Bank od England and the Vatican Bank in Rome. Our new economical system is about creating new jobs, creating a stable currency with no interest attached, without a private central bank. And this is where the central banksters are afraid of. They will do everything to avoid this kind of people’s economy. They don’t want the people to see that they have committed fraud on a grand scale. In the new system, people are going to discover there is no inflation nor deflation, no loss of purchasing power, it will be an incredible economy for everyone.
Every day life is going to improve, only one breadwinner in the family will be sufficient to being able to support everything that is needed. People don’t have to have credit cards to pay for their purchases.
The central banksters do not want the people to understand that they are the culprits who deliberately keep everyone poor by keeping them into slavery through the corrupt debt money system. By continually burdening them with new debt, instead of letting them live and enjoying 100% of their earned money. A basic privilege to which everyone is entitled. Their biggest fear is that this is now becoming known. – Nor do they want the USA and UK to conclude new bilateral trade agreements with other countries, apart from the WTO (World Trade Organisation), which is the major pillar of the Deep State funding and power.
Finally, a note about recent events in preparation for future developments; With the defeat of the Democrats over President Trump’s removal procedure, it appears that considerable action is being launched against those who falsely accused him of a planned coup. Q-followers expect that sensitive government documents will now be declassified that will reveal shocking crimes and conspiracies. The exposed criminals are likely to respond with dangerous counterattacks, most of which will not be visible to the public. As Q recently wrote; “The silent war continues”.