The Global Economy is clearly deflating so how much liquidity will the central banks provide for bankrupt Western Governments? – June 1, 2021
Which financial institution will be the sucker the central Banks and Politicians are looking for? During the last crash, people blamed GM and Wall Street Greed on the crash, when in fact the blame should have been put on Bill Clinton and George Bush. Glass Steagal was put in place by the socialist Franklin Delano Roosevelt regime because of his New Deals(Yes there was more than one lol) were all bullsh*t and everyone knew it at the time.
As history becomes a distant memory, Bill Clinton who didn’t comprehend why central banks shouldn’t exist in the first place had a hard time comprehending why Glass Stegall existed in the first place so he got rid of it and the modern-day casino wealth economy was born.
There was no boom time during the Clinton years, he merely removed a regulation that separated commercial banking from investment banking, not a big deal right? Well, how do like ‘them’ housing prices? some people forget that mortgages used to be issued primarily by insurance companies, but in the modern era, people have their mortgages insured by an insurance company which is separate from their mortgage. Even your unsecured credit card or line of credit has insurance attached to it.
All of these financial instruments are deflationary and help to prevent governments from engaging in austerity measures, with that said, there’s a coming cash-flow crisis because a real economy is based on productivity meaning you have to produce to consume.
Now, what most people don’t know about the modern economy is that this should be the era of the working class, because technology has deflated the global economy, meaning that prices should be cheaper for everything which actually threatens the political establishments.
People could literally have 20 hour work weeks and live a normal life, but we all have to pay these things cal taxes, whether they be inflation taxes, sales taxes, income taxes, corporate taxes, tariff taxes excise taxes, carbon taxes, there are all sorts of taxes that are making the WORKING CLASS poor.
Why this stupidity will continue is because more and more people are retiring and they need the young to remain ignorant, because if the young realize that technology has caused prices to fall to the point in which they could literally work 20 hours per week at an entry-level job and live a decent life, the people who would suffer are the people dependent on the government for their survival.
Most people are beginning to awaken to the obvious, but I don’t expect politics or anything to change, because private-sector workers also like their government entitlements like minimum wage and social security. So what this means ultimately is a cash-flow crisis and how this is going to happen is that prices are going to be forced up.
In China, already they’ve had to debase the Renminbi, because of deflation, eventually, all nations will have to debase their currency to the U.S dollar, but unfortunately for the United States prices STILL won’t come down and this is what’s going to spark the deflationary death cycle
You see no government wants to cut government spending, which means the U.S private sector is going to be forced to raise wages and prices and this is deflationary. Although some of you reading this might be well off personally, a lot of people are flat broke and government stimulus can only save them temporarily.
Most people confuse the DECENTRALIZED forex markets with the domestic economy, which is silly, the forex markets are used by most governments to pay for government spending. Now although the Chinese people get screwed with a devalued Renminbi, the Chinese Communist Party gets stimulated.
So my question is how much liquidity will central banks provide bankrupt western governments? My answer is politicians get blamed this time around. I’ve watched Jerome Powell and his dovishness once former President Trump called him out on raising rates. Powell since then has basically said f*ck it, whatever the president wants I’ll do it.
Which ultimately has lead to politicians getting even more extreme with their spending proposals. Printing money during a deflationary cycle leads to fiat price inflation and once that genie is out of the bottle what it means is that every new spending bill will result in higher prices. Because at present the U.S dollar in America isn’t tied to productivity, meaning that tax collection can’t SERVICE America’s debts. This is something politicians will have to learn the hard way.
With that said, there are massive opportunities ahead, but you have to skate to where the money puck is going!
Interesting times ahead!
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