Thursday, April 6, 2017

Absolute must read article from Mish

Mike Shedlock totally gets it.  Sometimes his explanations are too detailed and contain too much data for many people to understand (which is a nice way of saying that even very intelligent people have a short attention span when they don't think something is important to them) but his general theses are spot on time and again.  His recent article which covers the real reason why things are AFU in the economy is also a bit too long for many people but his main point is very clear: The delinking of gold back in the early 1970s is the root cause of all of these issues. 

In fact, I just added an Inflation/Deflation page to this blog a few days ago which makes some of the very points Mish is making.  Importantly:
  • Deflation is not evil for the rank and file.  It is only evil for the money changers who have loaned out so much money that it defies belief and now they hold these debt notes on their books as "assets".  Deflation reduces the value of these assets and threatens the bankruptcy of all the parasitic elite money changers.  This, and only this, is the reason that the federal reserve wants inflation.  It is only good for bankers and those in cahoots with bankers and it is only bad for the rest of us.  Inflation reduces the buying power of our earnings and of our savings.
  • Despite what the powers that be would have us believe, the human condition is inherently deflationary.  That's because deflation is achieved by an increase in production relative to the money supply.  IF the money supply is not growing (and it should not be in a fair world) then stuff should get cheaper over time because each generation stands on the shoulders of those who came before in order to do things faster, smarter, better and cheaper.  Our ability to develop technology and pass it down to the next generation to build upon is a massively powerful deflationary force.

  • The fact that we do not see deflation very often is completely related to the dishonest federal reserve printing up more money each time its corrupt debt Ponzi threatens to collapse.  Importantly, this cannot go on forever because the underlying model of our fake money system is that of a Ponzi scheme.  
    • No Ponzi ever lasted forever.  WHY??  Why can't a Ponzi go on indefinitely?  
      • It's simply because you can't fool all the people all the time and at some point in a scam you can't fool any of the remaining market participants.  
      • Anyone who knows what is going on is doing all they can to distance themselves from the fake money system.  
      • Those who don't know what's going on still feel the effects of the con and are reacting in kind.  A good example is the trend of young people to live in spartan "tiny homes" of 400-500 sq ft.  They are trying to make it into an adventure but the truth is that they simply do not want to be in home debt their entire lives.  Many of them simply don't make the monthly paycheck needed to live in a real home and many of them have stopped even trying.  So now they are hunkering down and making do with what is essentially a slightly oversized prison cell for the modern day millennial pauper.  Housing is by far the largest contributor to the increase in debt.  Our economy is pushing back from debt and without an ever increasing amount of debt the debt Ponzi will eventually peak and then collapse rapidly.  It will certainly not just go on and on forever; trees do not grow to reach the sky.
    • Once all the smart people move away from the system and all the Marks and Patsies have been fleeced and thus have nothing left to take, the energy source of the debt Ponzi is gone and the Ponzi must and therefore will collapse.
The one thing I take issue with in Mish's article is that the delinking of gold from dollar in 1971 changed the nature of the debt curve shown below.


The curve is clearly of exponential nature and these kinds of curves always begin asymptotically to the X axis.  I do not see a sudden knee on the chart occurring on the date where dollar and gold were delinked.  Instead, I think this exponential curve was always baked into the fake money system consisting fractional reserve lending on top of fiat currency.  The fact that a side con was being run about the dollar ever being backed by anything is just trivia.  Clearly the dollar was NEVER backed by anything except lies, corruption and bullshit because as soon as too many people tried to claim the gold that was supposed to be available for dollar exchange, Nixon shut it all down.  So its clear that the system was being gamed by US the entire time, even when the official promises about gold convertibility were not yet exposed to be the outright lies that they actually were.  In other words, gold delinking changed nothing because there never was a real link.  The corrupt forces of fiat currency and fractional reserve banking are the only things that caused this curve.

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