Guest Post by Ron Paul
Now you see it … maybe soon you won’t.
Over the last year, the seeming ability of stock values of many technology companies to keep rising forever met resistance. This was true even for the major technology companies known collectively as “big tech.” During the last 12 months, Meta (parent company of Facebook, WhatsApp, and Instagram), Amazon, and Alphabet (parent company of Google and YouTube) suffered layoffs and big declines in stock prices.
These were the result of both bad decisions and changing market conditions. For example, the end of covid lockdowns obviously reduced demand for Amazon’s delivery services. Also, an increasing number of people are leaving Facebook and other Meta sites for newer social media sites. Many of those who use social media for political organization, education, or discussion are abandoning Facebook and YouTube for sites such as Rumble — sites that don’t deplatform individuals for sharing opinions and news that displeases “woke” bureaucrats and politicians.
The magician in this scenario — the Federal Reserve — played a major role in big (and medium and small) tech’s rise and fall. Technology writer David Streitfeld, writing in the New York Times, recently examined how the Fed’s 2008 market meltdown related policy of near zero interest rates led many investors to throw money at tech companies. In many cases, these investors would not have bought tech companies stock had the Fed not distorted the signals sent by interest rates, which are the price of money. The historic expansion of the Fed balance sheet thanks to “quantitative easing” also helped create a tech bubble. Now that the Fed is raising interest rates (although still keeping them well below what they would likely be in a free market), the tech bubble is being popped as investors are able to get a more realistic view of tech companies’ value. This is causing a painful but necessary correction.
For example, Carvana, which aimed to be the “Amazon of used cars” went from an 80 billion dollars valuation to a 1.5 billion dollars valuation, a 98 percent loss, in just 18 months. Also, the Fed-created tech bubble allowed Amazon to lose millions opening new businesses, including physical bookstores. Amazon announced in March of last year, the same month the Fed started increasing interest rates, that it would close all its bookstores.
The tech bubble enabled large companies to grow via mergers and acquisitions. Many small and startup companies attracted investors with a promise of a big payoff from an acquisition. The frequency of tech-related mergers and acquisitions is a major reason behind the left’s (and some people on the right’s) renewed interest in antitrust laws. Federal Trade Commission Chairman Lina Khan owes her position to her advocacy of using antitrust to limit the growth of big tech. Khan’s crusade against big tech has suffered some setbacks in the courts. However, Khan need not worry since the Federal Reserve may do a more effective job of limiting tech-related mergers and acquisitions than the FTC ever could.
Sam Abuelsamid, principal analyst with Guidehouse Insights, accurately summed up the tech industry’s recent history for Streitfeld’s article: “The whole tech industry of the last 15 years was built by cheap money. Now they’re getting hit by a new reality, and they will pay the price.” Federal Reserve created bubbles and busts are not a new reality. They have been with us since the Fed was created and will remain until the system collapses or until Congress audits, then ends, the Fed.
It is my sincere desire to provide readers of this site with the best unbiased information available, and a forum where it can be discussed openly, as our Founders intended. But it is not easy nor inexpensive to do so, especially when those who wish to prevent us from making the truth known, attack us without mercy on all fronts on a daily basis. So each time you visit the site, I would ask that you consider the value that you receive and have received from The Burning Platform and the community of which you are a vital part. I can't do it all alone, and I need your help and support to keep it alive. Please consider contributing an amount commensurate to the value that you receive from this site and community, or even by becoming a sustaining supporter through periodic contributions. [Burning Platform LLC - PO Box 1520 Kulpsville, PA 19443] or Paypal
-----------------------------------------------------
To donate via Stripe, click here.
-----------------------------------------------------
Use promo code ILMF2, and save up to 66% on all MyPillow purchases. (The Burning Platform benefits when you use this promo code.)
Inflate away as much debt as possible before pulling the plug , intentionally , for a reset.
” The name of the game is BAILOUT ” – chapter : The Creature From Jekyll Island , A second look at the Federal Reserve by G. Edward Griffin
The replacement population is already used to a much lower standard of living.
They have deflation running on all 4 cylinders (population, income, default, war). But I don’t think inflating away debt helps.
In other news, last Saturday’s mail flier is sitting here on the desk. The front page features an advert from Papa Johns’. It reads: “New”, “Crispy PARM Pizza”, then: “Go Ahead. Flip It!”
I guess they are not aware of one of the ‘urban terms’, parm.
I would rather type out that I am not aware than look it up.
It is impossible to inflate away debt. The more likely outcome is to inflate away 99% of earnings, 1% buyout of all assets held by the 99%, then declare a debt jubilee for the 1% in good standing.
HAS THE US BEEN CAPTURED BY FOREIGN AND CORPORATE INTERESTS?
The only reason this shit show of an economic Ponzi is still afloat is the FED’s off book balance sheet. The FED buys the market to prop up valuations, they have injected over $1 billion dollars into the market in just the first few months of 2023, not counting the billions to the Swiss Bankers. Our economy will continue until it doesn’t, in the end the dollar goes to zero…in the end there will be a huge wealth transfer and we likely won’t have a seat when the music stops.