My unpublished (100,000 word) book “The Financial Jigsaw”, is being serialised here weekly in 100 Issues by Peter J Underwood, author
Quote of the Week: “Fair is irrelevant. This is the law – it has nothing to do with justice.”– Kenneth Eade
We continue this week by looking at the illusion of the ‘new normal’ which involves issuing much more debt than economic growth provides. There is much speculation of an imminent recession starting in the near future as many statistics are pointing downward at present. Clearly we are not in a normal situation, far from it, and it is fair to speculate that the Fed and central banks in general have lost control of the economy – not that they had much real control in the first place. And this on the future of gold:
This article by Dr Tim Morgan describes how TPTB have missed the essential elements of the lack of growth by focusing on the financial economy which distorts all the policy formulations: https://surplusenergyeconomics.wordpress.com/
Here is the link to last week: Issue 60
Now that Brexit will not be coming to a final conclusion after three years, I will continue to provide weekly updates as events progress:
Brexit Update – 19th July 2019
The Brexit deadline remains 31st October 2019 and stays in place unless the next PM can get Parliament to agree a new exit plan. The progress of Brexit will be halted until a final decision is made and in the coming weeks I will report what the two candidates are saying about their ‘plans’ to execute Brexit by the end of October.
We are approaching the final vote to select a new leader and Prime Minister and it is looking increasingly likely that it will be Boris Johnson according to the latest polls. The general opinion is that the EU will not renegotiate the existing agreement, in which case a no-deal Brexit has been promised by Boris. The projected effects are not easily discerned but this article has a shot at possible implications:
Details of Parliament’s deliberations can be found here:
CHAPTER 11
MACROECONOMICS 101
“I think the person who takes a job in order to live – that is to say, for the money – has turned himself into a slave”. – Joseph Campbell
“Gold and silver are not by nature money, but money is by nature gold and silver.” – Karl Marx
“When people find they can vote themselves money; that will herald the end of the republic” – Benjamin Franklin
The illusion of the ‘New Normal’
We have seen so far how the various economic schools and their models influence how the global economy and finance is managed. There is one other factor which is becoming more recognised as time passes.
It has been some ten years since the last financial crisis and most of us would say that things have remained much the same and therefore the central bankers’ solutions have been working. We appear to see a modest growth in our economies and relative stability in markets and commercial activities.
This has been described as the “New Normal“; people have become accustomed to vast increases in the giant size of corporations and banks and which appear to be prospering. Although the fundamentals continue to strain under falling global demand and excessive historical debt levels generated by central banks, the people feel less fear than they might if they knew and understood the whole truth.
America’s half century experiment in fiat currency has gone exactly as followers of the Austrian school had predicted: a continuing decline in the dollar’s purchasing power accompanied by a decline in the standard of living of middle and working-class Americans; a series of Federal Reserve-created booms followed by increasingly severe busts and an explosive growth in government spending and debt.
Federal Reserve policies are also behind much of the increase in income inequality. Since the 2008 ‘Fed-created’ economic meltdown, more Americans have become aware of the Federal Reserve’s responsibility for America’s economic problems. This growing anti-Fed sentiment is one of the key factors behind the liberty movement’s growth and represents the most serious challenge to the Fed’s legitimacy in its history.
This movement has made “Audit the Fed” into a major national issue that is now closer than ever to being signed into law. Here is a ‘tweet’ from President Trump presaging the audit process to come:
“It is so important to audit The Federal Reserve, and yet Ted Cruz missed the vote on the bill that would allow this to be done.” — Donald J. Trump (@realDonaldTrump) February 22, 2016
The effect of mass psychological propaganda
The bankers have done their job well, which was to drive the economy to the very edge of the financial cliff keeping it suspended until the general public became comfortable living with an illusory and apparent stable economy.
The dynamic they use is something the average person will not understand or refuses to examine: modern economics focuses on mass psychology. The international financial cartel influences the minds and emotions of the people in order for them to quietly accept the concept of the ‘new normal’ and thus manipulate their group behaviour.
In this regard macroeconomics may be truly described as ‘alchemy’, transmuting true data into goal-seeking statistical fallacies and presented as facts. A quote from this recognised credible source will illustrate the power of this kind of propaganda:
“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized.
Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. …In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of person who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.” – Edward Bernays – Propaganda – 1928
In the meantime, government bureaucracy has worked tirelessly to present these fallacies as a reflection of an improving and growing economic recovery. The stock market is much easier to manipulate than empirical fundamentals thus markets are manipulated through various derivative instruments as is well known in the gold and precious metals markets.
Whilst some valid data slip through and issues of a true supply and demand are recognised, the vast majority of the populace has little knowledge about the financial collapse of 2008 and that it never actually stopped; the economy has been shifted into a state of apparent equilibrium, a sort of suspended animation, until fundamentals finally become ascendant and reality strikes with sudden ferocity, eviscerating the market actors before they can escape.
Towards a global, single monetary and economic system
The Fed’s low interest rate policy, especially against banks’ overnight loans, has allowed the economy to muddle along for ten years greatly enriching the top .01% in the process. Now the strategy is changing because the effects of monetary stimulus gradually erode over time and while statistics can be falsified and the stock market remain inflated for a length of time eventually the consequences must be faced in the real economy.
The longer it goes on the greater the final crisis becomes as tens of trillions of debt finally become due as the assets that they represent revert to their true value. The ruling elite are fully aware of this potential event and are prepared for it in many ways. Their mantra: “Out of chaos, order” is not to be taken lightly for they already have plans in place and make no secret of publicising them through their journals, such as “The Economist” and their captured mass media generally.
The Globalist elite are ready to rescue the economies of the world by formulating a common global currency under a single monetary and economic authority managed by the International Monetary Fund (IMF) using the IMF’s existing Special Drawing Rights (SDR) thus relegating national domestic currencies eventually to becoming interchangeable and replaceable.
The dilemma for the globalists is that they cannot initiate such a dramatic shift in the global finance system lest they take the blame for the inevitable collateral damage to people’s lives as their “great global reset” is undertaken; the globalists need a scapegoat. Thus they now have Donald Trump as president of America, ‘Brexit’ in UK, and the rise of “populist” movements throughout Europe and the West in general.
During the first half of 2016, globalists were continually “warning” that a rise in populism (the conservatives and their sovereignty champions) would result in an international financial catastrophe. In early 2017 the Federal Reserve in particular started the final phase of the next financial crisis by engaging a series of interest rate hikes which will eliminate cheap overnight loans to the banks and corporations and effectively sabotage financial markets in the coming years.
To be continued next Saturday
