The debt is a problem only when people no longer want to buy your debt. You have to pay higher interest to sell your debt and eventually nobody believes you can pay it if the rate is too high. What event or set of circumstances is going to trigger that realization nobody knows. But at a certain point in every excess, things revert to the mean. If the US just wanted to print money and not issue bonds, then they’d have no debt. They can do it. The treasury or the Fed create money every day. Why they choose to create debt in the form of bonds versus just expand the money supply is predicated on differing factors. Banks literally have a license to print money. They invent it when they make a loan. That’s their not so little secret. Our idea that they have deposits first and then make loans is incorrect. They make loans and then get deposits often times. It’s been that way for a long time. The point is that it’s a dangerous game. Everybody plays it. It’s fine for banks because historically the government privatizes profits and socializes losses. ( Buy a bank if you can. Seriously.) But once the government loses trust then it won’t matter. And we will be Argentina. BTW, Argentina has gone bust many times in the last century plus. So why do bankers keep lending them money? Once you figure that out, you’ll realize it’s always been a suckers game and the little guys are the suckers.
Banks lend because it’s profitable in good times and if they are well connected or deemed to big to fail, they get bailed out when the SHTF. We just saw this with Silicon Valley Bank and Republic bank. We saw it in 2008 when favored institutions, not just banks were salvaged. We saw it in the S and L crisis in 1988 and other bailouts in the 90’s. We see it going back to the founding of the Republic. Banks invent money, lend it with fractional reserves, make a profit. Lend more during boom times, usually to real estate developers and people purchasing real estate. Banks like to lend on real estate because it’s less work to value it and it’s a long term loan usually, so easier than lending for business capex or other productive enterprises, and for a longer term, with collateral that won’t go to zero. They get carried away, the market peaks and then crashes. And then a few years later they do it again. Now with deposit insurance paid for by guess who - us , the risks are again socialized especially if you are at a major institution, as long as the fiat is desirable. Booms and busts have existed in America since colonial times and it’s always the same causes. It’s cyclical and almost nobody understands the cycle because the underlying factors have been deliberately erased from the economists lexicon and calculations about 115 years ago or thereabouts. If you understand the underlying cycle, you might make some money.
So, unless there is a massive crisis like a bigger war or another pandemic or some earth shattering disaster which affects the cycle and the longer term Kondratiev cycle, we should see markets ramp up ( boom) for a few more years. The cost of money will come down again and credit will flow and then at the peak evaporate and then abs only then we’re gonna have a big mother of a crash.
Simply stated “ Just look at the economies that have tried to inflate their way out of debt – Zimbabwe, Venezuela, Argentina;” It seems we are hanging with the wrong crowd 🤔 but the only question should be is “How do we fix stupid” 🤔
Bring back the Paul Volcker's of the world. That was the best move the US ever made to flight inflation. Sure, folks lost jobs and there was contraction, but it fixed a real problem. People today cry and complain when they can't have it both ways. In the early 80's we hunkered down, enjoyed collecting 10% on bank CDs (I'd be glad to see that again!) and a few years later stayed in nice European hotels for $25 thanks to the real power of the dollar. Now I have to sell my soul + 10% to go to Europe. If you lost your job there was another one available - perhaps not as nice as the one you lost, but we all got along. Folks should open to a few years of honest budgeting and forget the big house, new car and fancy vacation. Pull it in people. As a result I'm only earning 5.1% from the Feds cash. Pick it up boys. Like my buddy always says, you gotta go where your money treats you best. Perhaps this is no longer that place.
Banks lend money because they create it our of thin air. Study the Crypto markets. Crypto is the ultimate shell game however unlike banking when there's a default or rug pull there's not underlying asset just digital code. The great advancement in tech is not crypto but the influx in capital into what is really the largest unregulated gaming platform in the history of the world.
Banksters lend money to transfer wealth, out of thin air money is conjured, the real estate buyer pays back double or triple the fake debt inclusive of interest. If the borrower defaults the real property is transferred to the bank. When the SHTF most all wealth in real estate, business, anything borrowed against will legally transfer to the banksters.
'It's a Wonderful Life' was packaged as an uplifting Christmas movie when it was a social commentary. Banksters portrayed as leeches with the aim to enslave, and the local 'savings and loan' having the lenders best interest a heart, doing good building the community.
Long ago my grandfather said about the Great Depression: "The banks closed overnight, where did the depositors money in gold and sliver go?" Some was lost in bad investments but not all. I asked; Which bankers do you think stole the money while claiming bad investments? The bankers who didn't jump off the roof is a good clue. My German grandfather and businessman did not deal in credit nor did he think it wise to allow a bank to hold his money in their vault. I still remember as a young child turning the dial on his safe opposite his kitchen door. When he moved into our home I had a chance to see inside, lots of gold, silver, deeds and a machine pistol.
I would love to order some Malbec, but the wine website refuses my completed order because I have failed to create a password for my new account. Yet there is no input for that ‘create password ‘ action. Catch 22?
Inflation if high enough for long enough will force many people into poverty , thus enabling the likes of blackrock to acquire most assets. The owners of these entities will then control the world. All of this is deliberate. Remember Klaus told us this is the future, you will own nothing and "be happy".
This is true. And reality is much worse. The betrayal staggers the imagination. Central banks and governments have arranged “legal” taking of all stocks, bonds, derivatives, etc that are held by any member of the system. This includes assets an individual owns outright but is held by a financial institution. How? Webb lays it out at www.thegreattaking.com
Free download. This is why Klaus can be so brazen.
The debt is a problem only when people no longer want to buy your debt. You have to pay higher interest to sell your debt and eventually nobody believes you can pay it if the rate is too high. What event or set of circumstances is going to trigger that realization nobody knows. But at a certain point in every excess, things revert to the mean. If the US just wanted to print money and not issue bonds, then they’d have no debt. They can do it. The treasury or the Fed create money every day. Why they choose to create debt in the form of bonds versus just expand the money supply is predicated on differing factors. Banks literally have a license to print money. They invent it when they make a loan. That’s their not so little secret. Our idea that they have deposits first and then make loans is incorrect. They make loans and then get deposits often times. It’s been that way for a long time. The point is that it’s a dangerous game. Everybody plays it. It’s fine for banks because historically the government privatizes profits and socializes losses. ( Buy a bank if you can. Seriously.) But once the government loses trust then it won’t matter. And we will be Argentina. BTW, Argentina has gone bust many times in the last century plus. So why do bankers keep lending them money? Once you figure that out, you’ll realize it’s always been a suckers game and the little guys are the suckers.
Banks lend because it’s profitable in good times and if they are well connected or deemed to big to fail, they get bailed out when the SHTF. We just saw this with Silicon Valley Bank and Republic bank. We saw it in 2008 when favored institutions, not just banks were salvaged. We saw it in the S and L crisis in 1988 and other bailouts in the 90’s. We see it going back to the founding of the Republic. Banks invent money, lend it with fractional reserves, make a profit. Lend more during boom times, usually to real estate developers and people purchasing real estate. Banks like to lend on real estate because it’s less work to value it and it’s a long term loan usually, so easier than lending for business capex or other productive enterprises, and for a longer term, with collateral that won’t go to zero. They get carried away, the market peaks and then crashes. And then a few years later they do it again. Now with deposit insurance paid for by guess who - us , the risks are again socialized especially if you are at a major institution, as long as the fiat is desirable. Booms and busts have existed in America since colonial times and it’s always the same causes. It’s cyclical and almost nobody understands the cycle because the underlying factors have been deliberately erased from the economists lexicon and calculations about 115 years ago or thereabouts. If you understand the underlying cycle, you might make some money.
So, unless there is a massive crisis like a bigger war or another pandemic or some earth shattering disaster which affects the cycle and the longer term Kondratiev cycle, we should see markets ramp up ( boom) for a few more years. The cost of money will come down again and credit will flow and then at the peak evaporate and then abs only then we’re gonna have a big mother of a crash.
Thanks. Don’t worry. What you don’t know can’t hurt you.
Excellent article. Problem: Inflation. Bottom line: Will the West rollover peacefully. Or, will they try “something” collectively.
And will the collective solution work?
Or will they join the BRICS nations in their endeavor?
Who knows?
Current party in power (the dummocrats) still THINK everything is fine.
LOL, HaHa!
Nevermind. Got to go. I hear the Captain saying, “abandon ship”.
Toodles!
Just ordered more Tacana. If inflation is coming, let’s go out in blaze of high altitude glory!
Simply stated “ Just look at the economies that have tried to inflate their way out of debt – Zimbabwe, Venezuela, Argentina;” It seems we are hanging with the wrong crowd 🤔 but the only question should be is “How do we fix stupid” 🤔
Hey Steve. Maybe a better question “how do we fix corrupt“?
Like a snake, the only way to fix it is by cutting off the head...
Total agreement! These people aren’t stupid they are just pigs.
A winemaker told me once, “to get the best wine, the grapes must suffer”. I have often thought of that in the context of life itself.
Even the good book says we have to go through hell to get to heaven 😊
Steve Miller told me while he was harping about some airplane...
Hi Mark -
Yessir, all normal in SEFL. Thanks for asking!
PS - the link about Banking and the Constitution was FASCINATING...
Guido Hulsmann has a short book The Ethics of Money Production discussing in detail the enormous impacts of inflation of the money supply. Cheers
Bring back the Paul Volcker's of the world. That was the best move the US ever made to flight inflation. Sure, folks lost jobs and there was contraction, but it fixed a real problem. People today cry and complain when they can't have it both ways. In the early 80's we hunkered down, enjoyed collecting 10% on bank CDs (I'd be glad to see that again!) and a few years later stayed in nice European hotels for $25 thanks to the real power of the dollar. Now I have to sell my soul + 10% to go to Europe. If you lost your job there was another one available - perhaps not as nice as the one you lost, but we all got along. Folks should open to a few years of honest budgeting and forget the big house, new car and fancy vacation. Pull it in people. As a result I'm only earning 5.1% from the Feds cash. Pick it up boys. Like my buddy always says, you gotta go where your money treats you best. Perhaps this is no longer that place.
Banks lend money because they create it our of thin air. Study the Crypto markets. Crypto is the ultimate shell game however unlike banking when there's a default or rug pull there's not underlying asset just digital code. The great advancement in tech is not crypto but the influx in capital into what is really the largest unregulated gaming platform in the history of the world.
Banksters lend money to transfer wealth, out of thin air money is conjured, the real estate buyer pays back double or triple the fake debt inclusive of interest. If the borrower defaults the real property is transferred to the bank. When the SHTF most all wealth in real estate, business, anything borrowed against will legally transfer to the banksters.
'It's a Wonderful Life' was packaged as an uplifting Christmas movie when it was a social commentary. Banksters portrayed as leeches with the aim to enslave, and the local 'savings and loan' having the lenders best interest a heart, doing good building the community.
Long ago my grandfather said about the Great Depression: "The banks closed overnight, where did the depositors money in gold and sliver go?" Some was lost in bad investments but not all. I asked; Which bankers do you think stole the money while claiming bad investments? The bankers who didn't jump off the roof is a good clue. My German grandfather and businessman did not deal in credit nor did he think it wise to allow a bank to hold his money in their vault. I still remember as a young child turning the dial on his safe opposite his kitchen door. When he moved into our home I had a chance to see inside, lots of gold, silver, deeds and a machine pistol.
Here's a simple question. Who's in charge?
I would love to order some Malbec, but the wine website refuses my completed order because I have failed to create a password for my new account. Yet there is no input for that ‘create password ‘ action. Catch 22?
Any comment on The Great Taking by David Webb?
Inflation if high enough for long enough will force many people into poverty , thus enabling the likes of blackrock to acquire most assets. The owners of these entities will then control the world. All of this is deliberate. Remember Klaus told us this is the future, you will own nothing and "be happy".
This is true. And reality is much worse. The betrayal staggers the imagination. Central banks and governments have arranged “legal” taking of all stocks, bonds, derivatives, etc that are held by any member of the system. This includes assets an individual owns outright but is held by a financial institution. How? Webb lays it out at www.thegreattaking.com
Free download. This is why Klaus can be so brazen.
Is she sure the Originario’s didn’t just steal the grapes? Hope she is adjusting to life in the farm. Have her send pictures when she gets a chance
Maria has a substack: https://themariahbonner.substack.com/ Plenty of pictures there.
Thanks Alex!
GF you reminding me of me grandmothers both sides. 😂😂
Thank you for that GIF! I have not heard those wonderful women speak since the 80s. Sorry voice text I am lazy!