The Economy.

Continued from A1...

     Around 15 trillion is currently owed in debt. Over 2/3rds of that debt is in mortgages.

     The economy is a house of cards measured on net worth not cash reserves. The economy is no longer a cash based economy, it is based solely on speculation and credit debt. Prior to the time when everyone was given a line of credit, a person would have to have capital to be considered for a line of credit from a lender. These days they will give a loan out to those without capital no questions asked, because once you owe them, you own them for life. Forever in the pocket.

     The economic crash in 2007 reshaped the economy and allowed those in the top class to capture more wealth. Forcing those in the middle and lower class to accumulate more debt. Prior to the covid-19 shutdown, around 6 out of 10 Americans could not cover 3 months of living expenses. What do you think the ratio is now after one year of reduced hours, deferment, and unemployment?

     The current economy is being held together by a near 0% interest rate in hopes that people will continue to buy and stimulate the consumer economy. This is driving a housing, stock, consumer and crypto bubble. When/if the FEDs decide to raise the current interest rates from near 0% then the borrowing will stop. Those who’ve profited off of the bubble will sell off, take their cash and walk, or reinvest into higher earning bonds. This will lead to banks posting losses and will be forced to recall debt(s). The people will not be able to cover these debts and support themselves, or attain more lines of credit due to already being stretched so thin and the debts they already owe. As banks post massive losses it will trigger a run on the banks. The fact that 90% of USD is digital will mean banks will not have enough cash to cover the run and go belly up. Leading to an economic crash which makes 1929, 2007 and the covid-19 shutdown look like child’s play.
To add to this bank run, people will begin to attempt to shore up their wealth. Houses will be turned back over to the lenders, 12 states allow non-recourse punishments for home loans (the actual driving force behind the 07 crash, not sub-prime borrowers). The houses that will be turned over will be 2nd and 3rd vacation or investment properties. This will trigger a crash in housing prices, which accounts for the majority of Americans wealth. This means that the homeowners that purchased during the inflated market over the last 10 years will be under water on their loans and be pushed into foreclosure if they do not have decent cash reserves to cover this bust.

     In an attempt to recoup and shore up their holdings, people will sell off anything they can rapidly to pay debts. All markets will simultaneously collapse leading to the worst economic tragedy the modern world has ever seen. Deflating the worlds currency, stopping the global trade system, crippling every country would wide. Massive amounts of famine and poverty triggered. Mass migration in an attempt to survive the collapse, a perfect storm with no end in sight. The world depends on the American economy, if we are unhealthy the world is unhealthy. A butterfly effect which will start with one simple flap of the Wings Of Debt.

The Fallacy of inflation.

     If this were 1975 we would agree that giving out free money would trigger inflation, but it’s not 1975, it’s 2021. Americans are up to their necks in credit debt, some have already drowned. This is evident with the current homeless crises, food bank lines, unemployment numbers, underemployed people post-07, and those who just gave up hope and stopped looking for work. The fallacy that free money would cause inflation is rooted in a time when Americans did not have debt. The system needs the citizens to be in debt because the more debt they have, the longer they have to be in the job market (serfdom). The longer they are in the job market, the longer they can tax your income. The system relies on you to fund and support itself. And, if these citizens become homeless, then those in power point to the homeless issue in an attempt to raise taxes to rehouse these individuals which are homeless because of the actions of those in power. 

Let’s run an analyst with some figures: 100,000 citizens with an average of $200-500k worth of debt (student, home, medical, personal).

     The Gov gives every citizen 1 million in cash. The citizen takes that 1 million and pays off their $500K debt. That citizen is now free from the debt system and has 500k in seed money to fund a business. If half (50,000) of those citizens start a business and employ an average of 5 people per business, that creates 250,000 jobs. Those jobs create tax money, create economies around them (suppliers, commercial spaces, training, etc). If the other half (50,000) pays off their debt and decides to invest in mutual funds earning 7% annually, taking early retirement, that opens up the 50,000 jobs they were working for others to take over.
With a cash bail out direct to citizens, we can create 300,000 jobs and allow 50,000 to retire. Create 50,000 new business which will add tax revenue to local economies. Create competition with current business and ultimately lead to a drop in prices. Which the consumer benefits from and allows them to purchase more goods and services. Who isn’t benefiting from this? Who is telling the tail of inflation? Who is driving your economic fears? Who is creating your suffering? Why are you continuing to allow it to happen?