A Preview of Global Socialism: Near-Zero Percent CENTRAL Bank Interest Rates Help BlackRock ASSETS to soar to record $9.49 trillion – July 14, 2021,
As I like to point out that a major problem with CAPITALISM is DEFLATION, in a capitalist society there is something called BANKRUPTCY which prevents monopolies from occurring because constant competition replenishes the old guard who can lose everything because of ONE invention.
In a capitalist society, Legal Tender is optional, meaning that political fiat money in a capitalist society would have to compete with precious metals like Gold or even cryptocurrencies such as Etherum. In a capitalist society money could even be backed by oil, or tobacco, because money is nothing more than a convenient form of barter and capitalism aligns with freedom, and no human is forced to transact in any fixed form of money that doesn’t serve their interests.
Silver became money because everyone was willing to accept it settle a bartered transaction, Gold became the money of kings as it’s historically held its value against all assets. In the modern era, the world has accepted the U.S fiat dollar standard, thereby making the U.S dollar in the modern era gold standard of currencies.
Anyone with half a brain however would never value their wealth in U.S dollars, because fiat dollars have failed before and the U.S Federal Government is exhibiting the type of behavior that will eventually force the Federal Reserve into a position in which normalizing interest rates will never happen.
Once this becomes a reality, any financial entity with a half brain will align itself with as many assets it deems to be valuable for the future as possible, but even that has risk, as nationalization of private property is often normalized during times of economic DEFLATION.
Things could change in interest rates were normalized, what would disappoint a lot of people waiting for an economic collapse is that a lot of companies wouldn’t go bankrupt, what would happen however is that the value of their ASSETS would drop, which would be very bad for governments with exuberant costs.
Although most people would like to blame corporatism on the private sector, this exists because stupid voters who vote for stupid policies, and when stupid politicians promise to enact stupid policies, the only way to pay for ridiculous government spending is to debase the ELASTIC currency which equates to inflated asset prices.
Now, I’m sure the Federal Reserve understands that elastic can break, so as many people have observed, there is no MONEY PRINTING by the Federal Reserve, but the Fed is providing the type of liquidity that make Politicians believe that they can spend without worry.
Unfortunately for politicians, prices are being forced up, I recently watched a news program talking about McDonald’s promising to pay it’s employees, what’s being ignored in all of this is that McDonald’s will be raising its prices, Mcdonalds is merely getting ahead of inevitable inflation because all across the board prices for EVERYTHING are going up and these prices going to stay up.
What this equates to is an increase in poverty as certain jobs will have to be outsourced or costs of everything are going to be forced up, sure new jobs will be created, but because of FIXED government costs via regulations, certain jobs will cease to exist in Western Nations. Of course, this is unsustainable, but if you exercise your ability to invest your U.S dollars outside the U.S, you might find based on the country that your U.S dollars buy you more.
Keep in mind however that the world is heavily dependent on the U.S consumer spending and inflation in costs tends to equate to deflation in spending. For as long as interest rates remain near zero, asset prices will continue to rise and companies like BlackRock will continue to have increased access to money at ridiculously low levels.
It’s important to realize that although the normal person at best might get to borrow money at 3% before fees, companies like BlackRock get loans possibly at negative rates, meaning that it’s possible they’re cashflow positive on almost every transaction. This exists because of central banking, this is a preview of global socialism, this could never occur in a capitalist society because interest rates would depend on the market and the free market hates monopolies.
interesting times ahead