[quote=CONCHO]High gold makes them look bad and for good reason, they essentially run a ponzi-scheme that requires ever expanding debt with interest attached to it that more debt/money has to be created to pay off. Nobody told them that you can’t have infinite growth in a finite world, I guess.
You’re missing the point of fiat money and inflation; it’s not about growth. It is about putting nations and people in debt to an ever-smaller group of people and then using that debt to control them and relieve them of their hard assets. The sheep think that growth is required by the system, because growth is the only way they can realize their dream of becoming VPPs. Little do they realize that the actual VPPs have a very different future in mind for them.[/quote]
I get the scam. I don’t think you are getting the mechanics of modern fiat money.
All money in existence is debt
All debt in existence has interest owed attached to it
Interest attached to debt/money has not been created yet
New debt/money creation needs to take place to create interest to pay back debt
Credit has been contracting at a pretty good pace for about a year ago. That is DEFLATION, the contraction of money supply.
The Fed counteracted that by creating public debt to take the place of private debt and offset deflation.
The system must keep growing or mass defaults and and deflationary depression ensue.
Consumer credit is still contracting and will continue to do so because of all the defaults, which causes more defaults because banks have to keep money on there books to cover there loses and contract credit due to the rules of fractional reserve banking.
For a “healthy” banking system and credit market, it needs economic growth i.e. new debt slaves to take out debt. Because it needs to create new debt to pay off old debt. If you look around you wont see any. No new debt slaves = the end of the system. It is a ponzi sceme by definition 100%
So, on the banking end we have too major problems a huge amound to bad debt working thru the system AND no economic growth which creates a positive feedback loop causing more defaults. It’s a self reinforcing cycle
As I said above, the Fed counteracted the loss of private debt creation with public debt creation to keep the system for completely collapsing.
The only problem with that is it has a shelf life before other countries that we own money too call foul. Credit will keep contracting, you can see that from the parabilic default rates across all kinds of debt. So the Fed is stuck with just piling on more and more public debt to stop a deflationary collapse for the forseeable future.
Now we are at the point where the whole world does not trust the US financial system, which is essentially the Fed and the consortium of private bankers that run it.
At this point, it’just a matter of time. Actually a US debt default and all the pain that comes with it is probably the best for the long haul. We don’t need to leave future generations with all that debt.
On the physical side of the money equation, and really money is just the human abstraction of the exchange of resources and energy, is the oil. Really there needs to be an equilibrium between the two or the whole system goes screwy. Since debt and money need to constantly expand, do does the energy and matter. One big problem, we live in a finite world governed by the laws of physics and our monetary system does not.
Between 2004 and now oil production stalled, and will in the next few years, start declining. This event renders our debt backed monetary system useless because it will mean a contracting economy for the foreseeable future. Contracting economy means mass defaults, no investment and people not taking out debt because of money mechanics. Complete Systemic Failure.
IMO, Globalization is over, debt based money is over, investing as we understand it is over, stocks, bonds, modern money, pensions, etc… All require exponential continuous growth to remain viable and worth something.
Now, the worlds PTB are trying to figure out how to squash rebellions, keep all there loot and figure out how to run their countries as global capitalism breaks down.
We should see a wave of socialism sweep the globe.
