Monday, September 1, 2014

The Hungry Monster II

The Federal Reserve Bank is our central bank.  Their job is to manipulate the amount of money in the economy so as to maximize the good times and to minimize the bad times.  Their basic strategy is cruel due to the fact that they subscribe to the theory that maintaining an annual three percent inflation rate somehow keeps the good times rolling.  In fact, at that rate of inflation, every twenty years our savings have been devalued by about fifty percent.  The really scary part of that money supply manipulation strategy is the fact that no one is overseeing what they are doing, no one audits their accounts and no one knows how much money they have "printed" over the past ten years.  By using the quoted "printing" I am alluding to the twenty-first century fact that they no longer need to print actual pieces of paper with serial numbers on them; all they have to do to create more money is to enter a few strokes on their magic money making computer server and Presto! another troubled bank has a few million dollars to cover lousy loans and bad paper for another month.  Without this cheating system all of our banks would have failed years ago.  What they are running on now are these hidden bail-outs; as obligations come up that they cannot meet, the Fed slips them some computer cash and our citizens believe all is well in the system.  They can get away with this for a little while, but it will collapse one day.

Is there really a economic crash coming?  Well, I think so, but then again, I'm just a stupid redneck.  I offer this linked article, which is a speech given by the Vice Chairman of the Federal Reserve Bank this past August 11th to a conference of central bankers. It is from the Federal Reserve's web-site.  You can try to read it if you like, but you will find a bunch of blather and hiding behind vague statements which will be really boring and confusing.  They do that on purpose.  However, you will quickly get the sense that he is expecting a collapse rather than predicting good times are coming.  He talks about ways in which the central bankers around the world should batten down their hatches and attempt to ride out the coming economic storm.  In other words, they are getting ready for a crash.

"Additional steps have been taken in some countries. For example, in the United States, capital ratios and liquidity buffers at the largest banks are up considerably, and their reliance on short-term wholesale funding has declined considerably. Work on the use of the resolution mechanisms set out in the Dodd-Frank Act, based on the principle of a single point of entry--though less advanced than the work on capital and liquidity ratios--holds the promise of making it possible to resolve banks in difficulty at no direct cost to the taxpayer. As part of this approach, the United States is preparing a proposal to require systemically important banks to issue bail-inable long-term debt that will enable insolvent banks to recapitalize themselves in resolution without calling on government funding--this cushion is known as a "gone concern" buffer."

"Bail-inable long-term debt" means that the banks will close, take a required percentage of our deposits and issue us a mandatory (you gotta take it!) savings bond with a term so long that we will never see the day when we could cash back.  Thus they will "recapitalize themselves" with the only money left standing around, ours!  Thus they are able to save a "gone concern" (Quotes theirs) 

This "gone concern" strategy was tested in Cyprus, Greece last year.  The banks of Cyprus were closed, to prevent withdrawals, and re-opened after ten percent of the deposits were taken.  Our central bank is now forming such a process for us.  If I were you, I would ease down to the bank, calmly, and withdraw any savings you have, now.  Since they drove the interest down to nothing, what good are they anyway?

As for a cash crash, you want to have real, usable, assets.  Gold and silver coins would make a good default currency.  The paper money you take out of the bank would fall in value as fast as the jeopardized bank deposits would, however you will have them and they will still be good for past debts.  What makes me shake my head is the intention of the bankers to confiscate our money after they destroyed most of it's value.  Insanity!

Another remarkable shenanigan of our central bankers has been revealed.  They are playing the markets with our money.  Imagine a game of Monopoly with six players and a banker.  The banker has unlimited cash and has no personal risk.  Let's make a rule wherein an open property automatically goes to public auction when the first player lands on it.  Now, we will allow the banker to bid on the properties with the bank's unlimited cash supply.  How would you expect that game to go?  Have you wondered why the NY Stock Exchange has been doing so well in this lousy economy?  Have you wondered why the gold prices have stayed so low?  We can only imagine the market warping effects of the central banks "investing" in the markets, but we can be certain that we do not want our money in that rigged game.  Get out!  As for those 401k's, well get used to the idea that you will never see that money.

All of this illustrates the teachings of Christ to place our wealth in heaven where the thieves, rust and moths cannot take it away.  We have all been chasing dollars so long that we haven't noticed these thieves stealing it from us all along the way, even when we had it safely "in the bank."  

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