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Government Credit is Everything & Nothing

January 10, 2012

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In the nation that we affectionately call the United States, a situation exists where nearly 50 million people are dependent on food stamps and the numbers keep getting worse. The majority of the population is now reliant on the government for their day-to-day living expenses. There is a comparative handful of people who fritter away billion of dollars every year through the financial institutions they control while their annual “compensation” is an inconsiderable fraction of the losses they preside over. A global banking system, where fiat money created out of thin air through the fractional reserve, used to be to lent to individuals and businesses. That money credit is now being created to buy the debt of government.

The amount of that debt continues to increase everywhere, often with a shrinking tax base of older folks with falling birthrates. Everywhere, the idea of a government actually reducing, let alone paying off its debt. is considered irresponsible because of the “recession” which would be the inevitable outcome. US ratings agencies downgrade European sovereign debt on concerns that the nation in question ‘might not’ be able to pay off their debt while ignoring the fact that this same debt is the ONLY foundation available to the credit-based monetary system.

As the guardians of the insane system, the central banks boast about their indispensable role in maintaining monetary stability. To maintain this invaluable stability, they decree non-existent interest rates, create ever larger mountains of freshly printed money to keep companies, banks and governments solvent. They go to any length to prevent paper assets from being genuinely priced in any form. The marketplace is a fiction.

Recently, at a picturesque resort in Wyoming, Fed chairman Ben Bernanke met with his global counterparts. The financial world was attentively looking for indications of what these men are planning after having exhausted every monetary policy tool at their disposal. They continue to print dollars.

The never-ending credit expansion is obviously unsustainable. It’s painfully obvious, like the stoned dad that pilfers away the earnings of his family to buy more bad drugs. In the meantime, the mob supplies the credit for the kids to live on. The insanity must stop, but not because of any wisdom or bold “financial literacy.” One day, it simply will. Everything that real people have put their faith in simply won’t help them anymore.

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