For those foolish enough to fall for the government propaganda that a recovery is underway, caution and reconsideration are in order. All that governments have left is to promote the illusion of a recovery. They have exhausted their money, creditability and citizens’ patience.
Gerald Celente described their actions:
From the onset of the financial crisis that began in August 2007, and through the ensuing Panic of ’08, Washington, the Federal Reserve and central banks have managed to forestall a Great Depression-grade meltdown by way of a variety of multi-trillion dollar rescue packages, bailouts and stimulus programs. For three years the programs were able to induce an illusory and superficial recovery that, barring a major external geopolitical jolt, might have continued to run its course until the inevitable denouement.
Governmental attempts were doomed from the beginning. All that is left now is duplicity designed to buy time. A collapse is inevitable, all as a result of government economic interventions. Continued interventions provide no hope of avoiding the inevitable. They merely represent an attempt to push off Cairo or Tripoli type demonstrations from coming to the streets of America. Deferral may be possible; avoidance is not.
Bill Bonner ridicules this charade and Tim Geithner in particular:
Now, how did that work again? The banks were shown to be insolvent during the crisis of ’07-’09. They had too much bad debt and not enough capital. And now they’re healthy, right?
Well, what happened to the bad debt? Most of it was backed by real estate. Did real estate go up? It didn’t?
Then, what happened to make the bankers rich again?
The Fed bought their bad debt – about $1.25 trillion worth. But not only did it relieve the banks of their mistakes, it also connived with the US Treasury, now run by the aforementioned Geithner, to make sure the bankers made a lot of money. The Fed lent to them at next to zero interest rate. Then, the US Treasury borrowed the money back at 4%. Even a banker could make money with that deal.
But wait, there’s more…
Government deficits and money printing may mean eventual ruin to a nation’s finances, but they do wonders for the financial sector.
Bonner, in an attempt to educate Geithner (and Bernanke) cites Ludwig von Mises:
Credit expansion cannot increase the supply of real goods. It merely brings about a rearrangement. It diverts capital investment away from the course prescribed by the state of economic wealth and market conditions. It causes production to pursue paths which it would not follow unless the economy were to acquire an increase in material goods. As a result, the upswing lacks a solid base. It is not a real prosperity. It is illusory prosperity. It did not develop from an increase in economic wealth [i.e. the accumulation of savings made available for productive investment]. Rather, it arose because the credit expansion created the illusion of such an increase. Sooner or later, it must become apparent that this economic situation is built on sand.
Timing may be uncertain, but the end result is not. I believe that we are nearing the end, but institutions like countries, governments and the like take longer to die than logic suggests. Bells are not rung providing a warning when the unthinkable is about to happen. The 1987 stock market crash came out of nowhere as did the dot-com and housing collapses. So did events in the Middle East and Africa. When conditions change, they do so at dramatic pace.
No one can predict timing with reasonable accuracy. Yet things don’t feel right and Celente warns: “Be prepared conditions are spinning out of control.”
Is Wisconsin the trigger or will something else start the avalanche?
“institutions like countries, governments and the like take longer to die than logic suggests.”
There is still some ruin left in this country. Apparently, when the elites have finished feasting on the last few morsels of the dollar’s purchasing power the masses will finally awaken.