U.S. Shut-Down An Excuse For Debt-Default?

government americaJeff Nielson: A question being asked more frequently than ever by informed readers is “what happens next?” This is understandable, and not a reflection of these individuals becoming either more curious or simply more obtuse.

Rather, our fraud-saturated, non-transparent economies (and markets) have grown still more opaque. This is primarily accomplished by the ever-increasing falsification of economic data; first in the U.S., and now across the Western industrialized world. Proof of this lying-with-numbers comes empirically, via our permanent, near-zero interest rates across the West.

No government in History (other than Japan) has ever taken interest rates this low for such an extended period, for one gigantic, obvious reason. A near-zero interest rate – i.e. free money – is quite obviously the most-extreme (and most-reckless) form of economic stimulus which could ever be devised…except for “QE” itself.

As has been explained previously; near-zero interest rates/free money are the economic equivalent of a defibrillator. What has happened in the U.S., and across the West after five years of continuously defibrillating these economies? Nothing.

What happened after Japan defibrillated its economy for 5 years? Nothing. So it defibrillated it for another five years, and another, and another. After a quarter-century what do we see in Japan? After twenty-five years of monetarily defibrillating its own corpse-economy; the corpse is still a corpse. What a surprise!

Five years ago; the U.S. (the ring-leader of current, Western insanity) assured the world that “it could never become another Japan”. It was correct. The U.S. (and the other Western Deadbeat Debtors) are far worse than Japan.

Japan merely defibrillated its economy with 0% interest rates, alone. The U.S. has brought the world something far, far worse: “QE” (and 0% interest rates). This is “money”(?) conjured out of thin air, and (unlike all the other $trillions of near-worthless U.S. paper) all of this “QE” paper is not even “backed” by debt. It is merely Monopoly Money, in every sense of the words.

Readers need to understand that a (permanent) 0% interest rate has the effect of force-feeding huge sums of free money into an economy – hence the obvious metaphor of a defibrillator. Meanwhile, “QE” is the process of conjuring vast quantities of utterly worthless currency.

Combine the two insanities, and the product is obvious. The U.S. (and the other, Western suicide-jockeys) have been force-feeding vast quantities of totally/absolutely worthless paperinto their own economies – and the global economy. It is a “Ponzi scheme” in the truest sense of that expression.

Why (ultimately) have all of these $trillions in new paper failed to “stimulate” these Western Deadbeat economies? Because you can’t stimulate economies with worthless paper.

My apology to readers for the need to once again inflict this chart upon them, but it’s difficult not to use a piece of conclusive proof again and again.

The chart above is an extreme example of an exponential function. It could be a picture of anything, and the analytical conclusion would be the same. It is the picture of something which is completely/mathematically/irrevocably broken. There is no way such a function could ever be “fixed”. It is mathematically impossible.

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