The mainstream news has been awash lately in talk over the danger of economic “contagion,” primarily due to lack of dollar liquidity in emerging markets. This lack of liquidity is being pegged as a trigger for instability in stocks, bonds and forex markets around the world, and this time around it is the nation of Turkey that is being called a potential trigger for a fiscal domino effect spreading through multiple countries. We have heard talk of “contagion” before. Not long ago, Italy’s political shift toward a supposedly populist government led to fears of debt contagion within the European Union; this is still a valid concern, just not for the reasons the mainstream financial media usually presents. The issue of contagion must be examined through a different set of parameters besides those shoved in our faces by the financial media. In their world, everything is a matter of unpredictable cause and effect; everything is random and coincidental. Everything is chaos waiting to happen, and when crisis does strike, all can be blamed on a set of unrelated but interconnected scapegoats.
We are in a very peculiar ideological and political place in which Democracy (oh sainted Democracy) is a very good thing, unless the voters reject the technocrat class’s leadership. Then the velvet gloves come off. From the perspective of the elites and their technocrat apparatchiks, elections have only one purpose: to rubberstamp their leadership. As a general rule, this is easily managed by spending hundreds of millions of dollars on advertising and bribes to the cartels and insider fiefdoms who pony up most of the cash. This is why incumbents win the vast majority of elections. Once in power, they issue the bribes and payoffs needed to guarantee funding next election cycle.
America, you officially have a debt problem, and I am not just talking about the national debt. Consumer bankruptcies are surging, corporate debt has doubled since the last financial crisis, state and local government debt loads have never been higher, and the federal government has been adding more than a trillion dollars a year to the federal debt ever since Barack Obama entered the White House. We have been on the greatest debt binge in human history, and it has enabled us to enjoy our ridiculously high standard of living for far longer than we deserved. Many of us have been sounding the alarm about our debt problem for a very long time, but now even the mainstream news is freaking out about it. I have a feeling that they just want something else to hammer President Trump over the head with, but they are actually speaking the truth when they say that we are facing an unprecedented debt crisis.
August 6th was one of darkest days in the history of the Internet. When I learned that Facebook, YouTube, Apple, Spotify, Pinterest and others had colluded to take down content from Alex Jones all on the same day, I knew exactly what was happening. They timed their attack so that it would hit the press at the beginning of the weekly news cycle on Monday so that their purge would have maximum societal impact. And the fact that there was such overt collusion was obviously meant to send a message. We were supposed to understand that if they can do this to Alex Jones, they can do it to any of us, and so we better shut up and fall in line. I can’t even begin to tell you how sick I feel right now. The big tech giants have made it abundantly clear how they feel about all of us, and there is no future for alternative points of view on any of their platforms.
The stability of America’s status quo is illusory.
One of the enduring mysteries of the past decade is why inflation has remained tame while the central bank and government have pumped trillions of dollars of newly created money into the economy. Millions of words have been written about this, and so some shortcuts will have to be taken to make sense of it in one essay.
Let’s start with the basics.
1. Adding newly created money but not generating new goods and services of the same value reduces the purchasing power of existing money. To keep it simple: say the economy of a country is $20 trillion. (Hey, the US GDP is $20 trillion…) Say its money supply is $10 trillion.
So banks and/or the government create $2 trillion in new money but the value of goods and services only expands by $1 trillion. the “extra” $1 trillion of newly created money (either “printed” or borrowed into existence) reduces the value of all existing money.
In effect, the new money robs purchasing power from all existing money. Those holding existing money have lost purchasing power while the recipients of the new money receive purchasing power they didn’t have prior to receiving the new money.