Bloomberg: Central bankers racing to the bottom.

The fundamentals are obvious.  Fiat currency and fractional reserve banking have blown a huge bubble into the economy.  The fractional reserve banking part is the worst offender by an order of magnitude.  In other words, debt outweighs cash by 10:1 at the very least (and 70:1 if you are talking about mortgages held by Fannie and Freddie).  This is not going to get fixed without some form of default be it a massive deflationary depression or hyperinflation (or both in that order which is the likely case IMO).

Right now, all of the nations of the world have gone to effectively zero interest rates in order to avoid deflation.  It has not (and will not because it cannot) reignite the animal spirits of mass borrowing.  All it is doing it allowing the smart businesses to invest at very low interest rates in robotics and automation.  Sounds great, but the net effect is that automation displaces workers.  Workers who cannot adjust to this become either unemployed wards of the state or criminals (or they just die in their tracks).

The reason that governments cannot drive more consumption based borrowing into the economy is twofold:

1.       Those with money and jobs and good life experience (boomers) are getting old and retiring.  They are looking to retire from the system.  They will be living modestly, not racking up credit on new cars and houses.  They will downsize.  They will find ways to reduce their tax burdens.

2.       Younger people are not getting jobs.  They are not getting life experience.  They are working crap jobs and living at home.  These people will defer marriage, home buying, car buying, etc.  They will live for the day, not for the long term.

In recognition of this inability to drive the required amount of new borrowing by the public, the US has, since the start of Queen Elizabeth 3 [a hat tip to the monied elite], been printing $85bn per month from thin air in order to make up for the shortfall.  Japan followed suit and has been printing unprecedented amounts of Yen and will continue to do so until they get some inflation.  This is not a guess.  This is official policy and publicly stated by the Japanese government.  As these activities weaken the USD and JPY, the con men running the Euro are reflecting on the rising value of the Euro relative to these other fake currencies.   Since there is no more room for accommodation via interest rate reduction, that game is played out.  As a result, the EU will soon have to join the competitive debasement war lest its exports stumble and fall.  There is no other choice.  This outcome is 100% assured.  When not if.

All global fiat currencies are effectively worthless.  We are just waiting now for people to wake up to this fact, to begin to panic about it, to have governments reinforce this new understanding by imposing capital controls so that you cannot easily leave their corrupt currency systems and by outlawing transactions outside of their fake money system in order to stop people who saved their wealth in real money from benefiting from their understanding of the truth.   

At some point in all this,  a civil war will probably erupt in the US.  Americans are well armed and do not take kindly to being disarmed or strong armed.  I don't want it to happen and am not calling for it to happen.  I just think history suggests that it is becoming increasingly unavoidable.  Should it happen I can already tell you how it will play out.  Government will strike first with a shock and awe program.  They will be organized and efficient.  

In the initial take over, lots of good people will die and many others rounded up for re-education.  But many will remain free and those who are will make life very, very difficult for the domestic occupation forces.  History suggests that while off to a fast initial lead, in the end the government terrorists will be defeated. You cannot win a war against the people in their own country.  History says it is foolish to even attempt it but government terrorists always think it's different this time.  It will not be.