By Peter B. Meyer – 18th of February 2012
The FED lends the bankers money. Then, the bankers turn around and lend it back to the feds. The banks are happy; they're making money on a risk-free trade. The regulators are happy; what could be safer in a bank's vault than US Treasury bonds? Investors are happy; it looks like the financial sector is making money again. And the feds are happy; they're able to finance their deficits. What good does it do for the economy? NONE. Doesn’t that look like a scam?
Nevertheless, global central banks have printed trillions of dollars and euro’s to boost their economies, as they say, which is a straight lie! These bailouts usually solve the immediate crisis, keeping banks from collapsing. Apart from tackling the main problem; the huge amount of debt owed remain untouched to increase at an ever faster and accelerating pace, which is exceptionally dangerous because debt growth is compounded, which results in ever faster growing debt expansion. And that's happening right now, because additionally money is borrowed to pay the interest over earlier debt. And that went on for the last 40 years. Moreover they also have failed to resolve other important issues, like high unemployment and falling home values. And worse, this printing of global currencies is reducing the purchasing power, thus punishing savers and pensions.
The FED lends the bankers money. Then, the bankers turn around and lend it back to the feds. The banks are happy; they're making money on a risk-free trade. The regulators are happy; what could be safer in a bank's vault than US Treasury bonds? Investors are happy; it looks like the financial sector is making money again. And the feds are happy; they're able to finance their deficits. What good does it do for the economy? NONE. Doesn’t that look like a scam?
Nevertheless, global central banks have printed trillions of dollars and euro’s to boost their economies, as they say, which is a straight lie! These bailouts usually solve the immediate crisis, keeping banks from collapsing. Apart from tackling the main problem; the huge amount of debt owed remain untouched to increase at an ever faster and accelerating pace, which is exceptionally dangerous because debt growth is compounded, which results in ever faster growing debt expansion. And that's happening right now, because additionally money is borrowed to pay the interest over earlier debt. And that went on for the last 40 years. Moreover they also have failed to resolve other important issues, like high unemployment and falling home values. And worse, this printing of global currencies is reducing the purchasing power, thus punishing savers and pensions.
Nevertheless, global central banks have printed trillions of dollars and euro’s to boost their economies, as they say, which is a straight lie! These bailouts usually solve the immediate crisis, keeping banks from collapsing. Apart from tackling the main problem; the huge amount of debt owed remain untouched to increase at an ever faster and accelerating pace, which is exceptionally dangerous because debt growth is compounded, which results in ever faster growing debt expansion. And that's happening right now, because additionally money is borrowed to pay the interest over earlier debt. And that went on for the last 40 years. Moreover they also have failed to resolve other important issues, like high unemployment and falling home values. And worse, this printing of global currencies is reducing the purchasing power, thus punishing savers and pensions.
The ECB says it will give away as much as $1 trillion on February 29th. The European crisis is far from over, the endgame will be a bailout of the entire European banking system organized and financed by the FED.
“There will be no exit strategy for the ECB and the FED from their easy money policies. A reversal of its easy policies would destroy the entire EU banking system overnight.” “Just like the Fed, the ECB can talk tough about how it will withdraw liquidity ‘in a few years.’ But once that future arrives, there will be no withdrawal. The money printing tsunami won’t be reversed. The implicit merger between the banking system, the state and central banks will gradually be viewed as explicit.” “Investors, and savers slowly, are going to see this scenario as inevitable, so you should prepare for the inflationary consequences, ahead of the crowd.”
Let’s see, how does this work? You are deeply in debt. So, the bankers lend you money so you can continue making payments. You go even deeper in debt, and the bankers lend you more money so you can keep making payments, and so it keeps going on.
As an example, Portugal’s economy is shrinking at a 5% annual rate. Italy, Spain, Greece and Ireland are not in much better shape. There will be less income for the resp. governments. So what do the Eurocrats do? The same as the US does. They give the banks money, hoping the bankers will distribute it around.
The truth is that Central Banks and the Feds are privately owned. The banks that are members of the Central Bank Systems own them. Another truth is that the current debt-based monetary system was designed by greedy bankers that wanted to make enormous profits by using the FED and Central Banks as a tool to create money out of thin air and lend it to their respective governments at interest. And that plan is working quite well. Most people don’t understand how any of this works, but the Elite they do know.
Here is how it works. The Federal Reserve lends gigantic piles of nearly interest-free cash to the big Wall Street banks, and in turn those banks use the money to buy up huge amounts of government debt. Since the return on government debt is higher, the banks are able to make large profits very easily and with very little risk. This scam was also explained in a recent article in The Guardian….
Consider this: we pretend that banks are private businesses that should be allowed to run their own affairs. But they are the biggest scroungers of public money of our time. Banks are lent vast sums of money by central banks at near-zero interest. They lend that money to us or back to the government at higher rates and rake in the difference by the billion. They don’t even have to make clever investments to make huge profits.
All this is causing inflation, which is a “hidden tax” that continually robs all people of their wealth. The Central Bankers always says that they are “committed” to controlling inflation, but that never seems to work out so well. And current FED Chairman Ben Bernanke says that it is actually a good thing to have a little bit of inflation. He plans to try to keep the inflation rate at about 2 percent in the coming years. So what is so bad about 2 percent? That doesn’t sound so bad, does it? Well, just consider the following excerpt from a recent Forbes article….
The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.
But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 (2032) dollars to purchase the same basket of goods that 100 (2012) dollars can buy today. The “dollar” in 2032 will be worth one- third less (100/150) than what it is worth today
Now you understand why the banks are doing so fine. They earn money without taking the risk of lending to the real economy. Creating higher bonuses for the bankers themselves, to make money on taxpayers account. “How would the economy then function without the FED? Something has to take its place, right?”
No, the truth is that we don’t need anyone to “manage” our economy. The respective Treasuries could be in charge of issuing currency, while the free markets determine the interest rates. The world does not need to have a centrally planned economy.
The way today’s system works, whenever more money is created, more debt is created too. For example, whenever the government wants to spend more money than it takes in, which happens continually, it has to ask its Central Bank for it. The government gives Treasury bonds to the Central Bank, and the Central Bankers give the government “Federal Reserve Notes” in return. Usually this is just done electronically.
So where does the Federal Reserve get the Reserve Notes? It just creates them out of thin air. Wouldn’t you like to be able to create money out of thin air? Instead of issuing money directly, the government lets the Federal Reserve create it out of thin air and then the government borrows it. Sounds stupid? But that’s exactly the way it works.
When this new debt is created, the amount of interest that the government eventually pays on that debt is not created. So where will that money come from? Well, eventually the government will have to go back to the FED or its Central Bank to get even more money to finance the ever expanding debt bubble that it has gotten itself trapped into. It is a debt spiral that is designed to go on perpetually.
You see the reality is that the money supply is designed to constantly expand by the Central Bankers. That is why we have all become accustomed to thinking of inflation as “normal”.
Now everyone is doing the right thing. Households are reducing spending. Business is reducing its costs. GDP growth is falling and investors are taking shelter in Treasury debt. So what's the problem? Well, the FED and Central Bankers can't bear to see people doing the right thing. They want them to do the wrong thing - that is, they want them to spend money they don't have on things they don't need. Why? Because it makes the economy look good, and makes them look like they know what they are doing.
As long as the dollar rules, Washington’s power will rule. As Rome debased its silver denarius into lead, Rome’s power to purchase compliance faded away. If “Helicopter Ben” Bernanke inflates away the purchasing power of the dollar, Washington’s power will melt away too.
Where does this end? It isn’t known yet, but very much likely in Hyperinflation.
Recommended:
Since the majority of the official media either is owned or controlled by the Elite, you only read the lies and not the truth. To better understand today’s reality it is suggested to printout this essay with the previous four about: Inflation, Deflation, Stagflation and Hyperinflation, and keep those on hand. Even better forward those 5 issues to all your friends and family members. Spread these messages and wisdom for a better understanding about the state of affairs of today’s crisis. It certainly will help to speed up the recovery process!
The ECB says it will give away as much as $1 trillion on February 29th. The European crisis is far from over, the endgame will be a bailout of the entire European banking system organized and financed by the FED.
“There will be no exit strategy for the ECB and the FED from their easy money policies. A reversal of its easy policies would destroy the entire EU banking system overnight.” “Just like the Fed, the ECB can talk tough about how it will withdraw liquidity ‘in a few years.’ But once that future arrives, there will be no withdrawal. The money printing tsunami won’t be reversed. The implicit merger between the banking system, the state and central banks will gradually be viewed as explicit.” “Investors, and savers slowly, are going to see this scenario as inevitable, so you should prepare for the inflationary consequences, ahead of the crowd.”
Let’s see, how does this work? You are deeply in debt. So, the bankers lend you money so you can continue making payments. You go even deeper in debt, and the bankers lend you more money so you can keep making payments, and so it keeps going on.
As an example, Portugal’s economy is shrinking at a 5% annual rate. Italy, Spain, Greece and Ireland are not in much better shape. There will be less income for the resp. governments. So what do the Eurocrats do? The same as the US does. They give the banks money, hoping the bankers will distribute it around.
The truth is that Central Banks and the Feds are privately owned. The banks that are members of the Central Bank Systems own them. Another truth is that the current debt-based monetary system was designed by greedy bankers that wanted to make enormous profits by using the FED and Central Banks as a tool to create money out of thin air and lend it to their respective governments at interest. And that plan is working quite well. Most people don’t understand how any of this works, but the Elite they do know.
Here is how it works. The Federal Reserve lends gigantic piles of nearly interest-free cash to the big Wall Street banks, and in turn those banks use the money to buy up huge amounts of government debt. Since the return on government debt is higher, the banks are able to make large profits very easily and with very little risk. This scam was also explained in a recent article in The Guardian….
Consider this: we pretend that banks are private businesses that should be allowed to run their own affairs. But they are the biggest scroungers of public money of our time. Banks are lent vast sums of money by central banks at near-zero interest. They lend that money to us or back to the government at higher rates and rake in the difference by the billion. They don’t even have to make clever investments to make huge profits.
All this is causing inflation, which is a “hidden tax” that continually robs all people of their wealth. The Central Bankers always says that they are “committed” to controlling inflation, but that never seems to work out so well. And current FED Chairman Ben Bernanke says that it is actually a good thing to have a little bit of inflation. He plans to try to keep the inflation rate at about 2 percent in the coming years. So what is so bad about 2 percent? That doesn’t sound so bad, does it? Well, just consider the following excerpt from a recent Forbes article….
The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.
But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 (2032) dollars to purchase the same basket of goods that 100 (2012) dollars can buy today. The “dollar” in 2032 will be worth one- third less (100/150) than what it is worth today
Now you understand why the banks are doing so fine. They earn money without taking the risk of lending to the real economy. Creating higher bonuses for the bankers themselves, to make money on taxpayers account. “How would the economy then function without the FED? Something has to take its place, right?”
No, the truth is that we don’t need anyone to “manage” our economy. The respective Treasuries could be in charge of issuing currency, while the free markets determine the interest rates. The world does not need to have a centrally planned economy.
The way today’s system works, whenever more money is created, more debt is created too. For example, whenever the government wants to spend more money than it takes in, which happens continually, it has to ask its Central Bank for it. The government gives Treasury bonds to the Central Bank, and the Central Bankers give the government “Federal Reserve Notes” in return. Usually this is just done electronically.
So where does the Federal Reserve get the Reserve Notes? It just creates them out of thin air. Wouldn’t you like to be able to create money out of thin air? Instead of issuing money directly, the government lets the Federal Reserve create it out of thin air and then the government borrows it. Sounds stupid? But that’s exactly the way it works.
When this new debt is created, the amount of interest that the government eventually pays on that debt is not created. So where will that money come from? Well, eventually the government will have to go back to the FED or its Central Bank to get even more money to finance the ever expanding debt bubble that it has gotten itself trapped into. It is a debt spiral that is designed to go on perpetually.
You see the reality is that the money supply is designed to constantly expand by the Central Bankers. That is why we have all become accustomed to thinking of inflation as “normal”.
Now everyone is doing the right thing. Households are reducing spending. Business is reducing its costs. GDP growth is falling and investors are taking shelter in Treasury debt. So what's the problem? Well, the FED and Central Bankers can't bear to see people doing the right thing. They want them to do the wrong thing - that is, they want them to spend money they don't have on things they don't need. Why? Because it makes the economy look good, and makes them look like they know what they are doing.
As long as the dollar rules, Washington’s power will rule. As Rome debased its silver denarius into lead, Rome’s power to purchase compliance faded away. If “Helicopter Ben” Bernanke inflates away the purchasing power of the dollar, Washington’s power will melt away too.
Where does this end? It isn’t known yet, but very much likely in Hyperinflation.
Recommended:
Since the majority of the official media either is owned or controlled by the Elite, you only read the lies and not the truth. To better understand today’s reality it is suggested to printout this essay with the previous four about: Inflation, Deflation, Stagflation and Hyperinflation, and keep those on hand. Even better forward those 5 issues to all your friends and family members. Spread these messages and wisdom for a better understanding about the state of affairs of today’s crisis. It certainly will help to speed up the recovery process!
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