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Slow poison
Short recap When money is loaned with interest, the bankers create the principal but, not the interest. The volume of loans must always grow to create the capital to pay the interest. The income of the banker is dependent on always loaning out more and more money. This is the general principle of low-power money. The principal is destroyed on repayment of the loan and the interest goes to the banker.
With the fractional reserve system and Keynesian economics, it is mandatory to have growth in the credit system, money supply AND population. One person can only consume just so much and you must have 2 persons.
China has 1.39 billion people. India has 1.27 billion people. China had a one-child policy and is now crashing. India never had a one child policy and is getting by pretty good. Japan has a falling population and can't seem to get out of the dumps, no matter how much QE they do. China is doing more QE than Japan and America. It has been well proven that economic growth is directly connected to the number and % of 15---62 year olds.
When the consumption within a State is inadequate to keep air flowing into the the low-power money supply bubble, new consumption must be found outside the State. This is the foundation of the currency war. Cheapen your currency and you get more access to external consumption. A currency war is a round-robin devaluation of currencies by overprinting.
All of this is done to keep the money bubble inflated and people working. But, a currency devaluation is also a cut in wages for the workers in that currency bloc.
The production-consumption cycle is the bread-and-butter of the lower loop of the economy. The bankers thrive by creating more debt slaves BUT, this pulls money out of the producing/consuming economy.
When the income of the financial community starts to fall (commensurate with the fall in the lower loop), the Central Bank rides in with free money (high power) to keep the lower loop inflated. The free money goes into savings or investment or spending. It isn't paid back so, it inflates the low-power money supply as it bleeds in to the consumer loop. Meanwhile, the lower loop is deflating from lost wages and spending power. Most of the high-power money stays in the upper loop as debt instruments.
Celente says that a currency war has started. Gerald Celente: Globalists Will Collapse the Entire World Economy As "Currency War Has Begun"
From The CFR, Euro area banks should have been recapitalized years ago, with public money if needed The mantra is; no bank will ever fail as long as we can bleed the taxpayer for the money. Follow the Money » Post-Brexit
As ZIRP moves deeper into the markets, investors take more and more risk looking for return. The more money that is printed, the more it goes into mal-investment. If investors or funds do NOT take risks, they see their principle shrink as price inflation eats away at it. Bank stocks are falling badly because ZIRP and NIRP are not compatible with their business plan. If the prime rate goes up, the financial side of the lower loop crashes. If the prime rate does not go up, the financial side of the upper loop crashes.
The free money combined with NIRP was a double dose of sweet poison. The high was great but, the extremities are starting to go numb.
"Goldman Sachs admitted as much this week when their top analysts claimed that the third wave of the financial collapse of 2008, is rapidly approaching. Aside from how weird it is to hear a major financial institution admit that the crash of 2008 never ended, a fact that Austrian economists, conservatives, and libertarians have been saying for years, they also admitted that debt will be at the root of the approaching crisis."
Goldman Sachs: The Third Wave of the Financial Crisis Is Upon Us
Short recap When money is loaned with interest, the bankers create the principal but, not the interest. The volume of loans must always grow to create the capital to pay the interest. The income of the banker is dependent on always loaning out more and more money. This is the general principle of low-power money. The principal is destroyed on repayment of the loan and the interest goes to the banker.
With the fractional reserve system and Keynesian economics, it is mandatory to have growth in the credit system, money supply AND population. One person can only consume just so much and you must have 2 persons.
China has 1.39 billion people. India has 1.27 billion people. China had a one-child policy and is now crashing. India never had a one child policy and is getting by pretty good. Japan has a falling population and can't seem to get out of the dumps, no matter how much QE they do. China is doing more QE than Japan and America. It has been well proven that economic growth is directly connected to the number and % of 15---62 year olds.
When the consumption within a State is inadequate to keep air flowing into the the low-power money supply bubble, new consumption must be found outside the State. This is the foundation of the currency war. Cheapen your currency and you get more access to external consumption. A currency war is a round-robin devaluation of currencies by overprinting.
All of this is done to keep the money bubble inflated and people working. But, a currency devaluation is also a cut in wages for the workers in that currency bloc.
The production-consumption cycle is the bread-and-butter of the lower loop of the economy. The bankers thrive by creating more debt slaves BUT, this pulls money out of the producing/consuming economy.
When the income of the financial community starts to fall (commensurate with the fall in the lower loop), the Central Bank rides in with free money (high power) to keep the lower loop inflated. The free money goes into savings or investment or spending. It isn't paid back so, it inflates the low-power money supply as it bleeds in to the consumer loop. Meanwhile, the lower loop is deflating from lost wages and spending power. Most of the high-power money stays in the upper loop as debt instruments.
Celente says that a currency war has started. Gerald Celente: Globalists Will Collapse the Entire World Economy As "Currency War Has Begun"
From The CFR, Euro area banks should have been recapitalized years ago, with public money if needed The mantra is; no bank will ever fail as long as we can bleed the taxpayer for the money. Follow the Money » Post-Brexit
As ZIRP moves deeper into the markets, investors take more and more risk looking for return. The more money that is printed, the more it goes into mal-investment. If investors or funds do NOT take risks, they see their principle shrink as price inflation eats away at it. Bank stocks are falling badly because ZIRP and NIRP are not compatible with their business plan. If the prime rate goes up, the financial side of the lower loop crashes. If the prime rate does not go up, the financial side of the upper loop crashes.
The free money combined with NIRP was a double dose of sweet poison. The high was great but, the extremities are starting to go numb.
"Goldman Sachs admitted as much this week when their top analysts claimed that the third wave of the financial collapse of 2008, is rapidly approaching. Aside from how weird it is to hear a major financial institution admit that the crash of 2008 never ended, a fact that Austrian economists, conservatives, and libertarians have been saying for years, they also admitted that debt will be at the root of the approaching crisis."
Goldman Sachs: The Third Wave of the Financial Crisis Is Upon Us
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