Skip to content

Why Deflation, more QE, Central Bank schizophrenia?

January 23, 2015

Today’s missive will focus on some very important issues affecting our markets as well as implications for our future. Are you aware that ‘income inequality’ is part of the reason why our markets are trending towards rampant ‘deflation’? Our Central Banks dislike ‘deflation’ and they desire to create more ‘inflation’ for all of us. But why does ‘income inequality’ lend itself to more deflation? What is happening today is that the wealthy 1% and the 10% who have credibility with our Banks (their lending facilities) can borrow on credit to the max. (now at near zero % interest rates). This furthers their wealth and grows their % of overall wealth in our markets. This happens today because the vast majority of consumers have declining incomes (and/or no meaningful growth in income) and wealth (just the opposite of the 1% and the 10%). Declining (no growth) incomes are not conducive for getting new credit from our banksters!

Our Central Bankers (and many intelligent economist’s and financial pundits) reveal symptoms of Schizophrenia via their QE policies! 

The 99% (you and I) are not creating enough spending (via credit and new debt) to create the ‘inflation’ which our elite bankers desire. To offset this realtime deficit in spending (globally and nationally) our banksters implement more QE operations to, hopefully, add new DEMAND to our economy! Inflation is essential to our Keynesian debt based economic model. Without more ‘inflation’ (the goal is 2%) we experience a decline in asset ‘values’ over time. As asset ‘values’ (this imaginary concept within our minds) fail to grow over time, we end up with realtime disinflation, then real deflation, growing deficits, revenue short falls, and growing debt defaults. This is what happens when ‘inflation’ stops and reverses. We have now entered this conundrum (paradox) which our Central Banks hate!

The QE policy of Mario Draghi and Angela Merkel reveal ‘irrational’ economic thinking!

The Financial Times had a story on this issue today. The Big Story, however, is the QE operation which Mario Draghi is implementing over in the Eurozone. Some $68 billion of monthly counterfeiting is planned so that new ASSET PURCHASES can be added to the ECB balance sheet. Are you aware that QE is a form of official counterfeiting? Mario Draghi announced (his words) that he is implementing a program of ‘asset purchases’ (some $1.2 trillion or 1 trillion in euros). But how can he purchase new ‘assets’ (governmental and private) without new digits in his computer account? He can’t! So what does Mario and his proxies do? They first increase their own Digital Account (the ECB equivalent to our Fed’s SOMA account) and then they have new Legal Tender for their ASSET PURCHASES. Were you aware of this? Counterfeiting is necessary PRIOR to any program of asset purchases! What does this imply going forward? Does ‘money’ from heaven actually produce prosperity and real wealth?

Today’s counterfeiting is done by creating computer DIGITS and calling these units Legal Tender! Is this rational economic behavior? Not in my model!

What we now know (based upon prior QE operations in the USA, Britain, Japan) is that QE units do not filter down to the masses of consumers (you and I) who would spend the units and create more inflation. These new QE units actually settle within computer accounts (primary dealers) and within the accounts of the 1% and the 10%. These wealthy recipients do not use their units so that new inflation emerges in the overall markets. Yes, income inequality has implications and ramifications which our Central banksters are not recognizing. So will Draghi’s new QE operation in the Eurozone actually improve their economy and our economy? I would wager NO (absolutely NO)! QE is both a moral hazard to our markets and also a pseudo schizophrenic response to a much deeper problem within economics! What kind of example does QE set for economics and its future?

This graph (2007) reveals the Inequality of wealth in America! This is not improving going forward! Centralization of banking/money is part of the problem!

QE is nothing more that ‘official counterfeiting’ and this means that any sane thinker can project this policy trick into its philosophical end point. Since QE is the same as creating currencies OUT OF NOTHING via the computer, why not create unlimited computer digits (call it legal tender) and eliminate all TAXES for everyone? Think about what kind of example QE sets for a thinking person! If money (now mere digits typed into the computer screen) can be created at will by  our Central Bankers, why not create this ‘money’ for everyone and for all our tax liabilities? Why not! Think about the example our schizophrenic banksters are setting for all of us? Is this policy ‘insane’ or not? To me, QE is a form of total DESTRUCTION of our Capitalistic system (given a few years time)!

Banksters create our ‘money’ merely by TYPING numbers into the computer screen! Is this sound economics or irrational schizophrenia? Why pay taxes? Why fund politicians?

Yes, Capitalism is now OVER as our banksters have created insane, irrational, and schizophrenic policies for our casino markets. How can anyone view today’s markets as sane and moral? How? In reality, all our markets, prices, values, incomes, and investments are ‘false’ and morally CORRUPT. Income inequality has reached levels where real political revolutions are imminent going forward. The vast majority of consumers are still unaware of what is transpiring so they act as if ALL is kosher and sustainable. This mindset, however, will crumble in flames as events play out in the coming months and years. Our entire economic/political systems are totally corrupt and schizophrenic. This schizophrenia derives from realtime policies of our leaders which are irrational and insane! Watch and learn! I am:

No comments yet

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: