Where does the money come from?
Where does it actually go?
Who pays for it in the end?
Who said this?
"Great expansion of currency and credit have depreciated the dollar just as expansion and inflation have discredited the coins of the world. We inflate it in haste; we must deflate in deliberation. We debase the dollar in reckless finance. We must restore an honesty. Deflation on the one hand and restoration of the 100 cent dollar on the other ought to have begun the day after the Armistice, but plans were lacking or courage failed."
The exact opposite of what we are being told now...
"We gotta blow eight hundred billion dollars that doesn't even exist on a whole bunch of money losing projects to keep the economy going. Yeah. I gotta bash the patient in the head with a hammer to keep him conscious, too." (link to video)
It was Harding who said the first quote above during his acceptance speech for the Republican nomination back in 1920. In the same speech, he also said this:
"Let us call to all the people for thrift and economy, for denial and sacrifice if need be, for a nationwide drive against extravagance and luxury, to a recommittal to simplicity of living, to that prudent and normal plan of life which is the health of the republic. There hasn't been a recovery from the waste and abnormalities of war since the story of mankind was first written except -- through work and saving, through industry and denial -- while needless spending and heedless extravagance have marked every decay in the history of nations."
For the benefit of California, I add that it was also Harding who said:
"I would be blind to the responsibilities that mark this fateful hour if I did not caution the wage earners of America that mounting wages and decreased production can lead only to industrial and economic ruin."
Misallocation of Resources...
I'm paraphrasing here on a very (VERY) brief introduction into how interest rates work (or don't work) in a capitalist economic system.
Interest rates actually play a role in society... they aren't just arbitrary numbers... they play a coordinating function. And when they are permitted to play this coordinating function, what they do is coordinate production across time.
People save more today for spending more in the future. When they save, interest rates go down. Businesses take loans when interest rates are down to invest and make changes to gear up for production to capitalize on that future spending.
By saving, my deferral of consumption (ie not spending) leaves resources out there for businesses to draw from to increase production. It increases the supply of resources into the overall economy which industry can draw from.
When you tamper with interest rates as the market sets them, you are introducing dis coordination into this coordinating structure.
So now, if the central bank, like the Federal Reserve, tries to artificially lower interest rates -- forcing them down in an open economy -- but the public has not indicated they want to save for future consumption (instead, they want to consume now) then businesses are still being encouraged to invest right now for future consumption (long range production) which creates a timing mismatch.
Just because the Federal Reserve wants to force interest rates down, that does not force more resources into the economy.
What it does is create an unchanged resource pool in a market-driven economy.
The Bust is Inevitable
Without all the needed resources, many long term projects cannot be completed. This will create a bust that comes in the future.
While things are "booming" you don't notice it... until you run out of the needed resources. In a timing mismatch, you will run out. History has proven this. And when you run out, that's when the real crash comes.
That's why falsely pumping money into the economy (like the Administration is doing right now) is not a solution to a "depression" ...it's actually the cause of a "depression."
Even worse, by snatching resources from that pool and putting them towards non-producing projects (ie take resources and/or capital out of the hands of industry) at a time when you are trying to "stimulate" production, you are creating a gaping hole that becomes larger, and larger (and larger) to fill, the longer you keep doing it.
It's a mismatch of time, resources and demand.
That is NOT a capitalist system, dear readers.
One thing you have to do in a situation like we are now in is STOP THE MONEY CREATION.
Learn more in this 49 minute video: "Why You've Never Heard of the Great Depression of 1920"
Yes, it's a long video, just over 49 minutes long, but I promise you, it is well worth the time you invest in exchange for the education you will get from it. You will walk away from it with a far clearer picture of how integrated and interrelated interest rates and money creation are in a capitalist economy.
Don't Blame Capitalism
There are people in Europe screaming against capitalism right now.
There are people right here at home silently agreeing with those very same Europeans.
There are some in Government in agreement, as well.
Their ignorance to the natural laws of capital economies has led them down the path of believing they actually have a capitalist economy. Theirs' is nothing but a farce, a managed economy teetering on the edge of socialism... so far from true capitalism that they cannot even see the forest for the trees, IMHO.
I wonder how they would react if they actually found out how "managed" their economy truly is?
You see... when you Lord it over natural laws of supply and demand, then it is YOU who is to blame for all the pain, poverty and lack of abundance you see. You've actually created your own lack of abundance. And worse, you've actually created the inequalities in your society.
You've created a FALSE abundance along with a FALSE abundance mentality.
What would your people think of that if they ever found out?
You can try to misdirect them -- tell them it's capitalism's fault.
If you can live with that lie.
Sooner or later, the truth comes out.
They should heed these words:
"In a world without truth, freedom loses its value." ~ Pope John Paul II
This mini lesson on interest rates and abundance all ties into the BIG FAT LIE that I will be expanding on very soon. I have not revealed all the lies behind the BIG FAT LIE yet because it's important, in my very humble opinion, that you understand at least the basics of how a capitalistic economy works.
Watch the video... and I'll see you again soon with some VERY IMPORTANT information I've uncovered regarding how some books are being cooked in the most extraordinary of places to create money that does not exist.
Until then, keep the faith.
Americans are strong. Once they understand the truth, they will adjust their direction and find their inner compass. I truly believe this!
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