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Our President Trump just said:
The FBI's Raid on Trump's Attorney Michael D. Cohen.is attack on our country.
The coup by the liberals, libturds and the world globalist against our Republic USA and the already 100 MLN. supporters of the President LEGIT ELECT Trump is on the way..
Nothing can stop them: Sergei Skripal fake gas poisoning in London to blame Russia for everything (Teresa May PM position and Brexit, justifying the financing of NATO.Trump stopped
the big uncontrolled Funds trough UN) and gas attack in Syria just after President Trump said would like US troops out of Syria asap. The Demorats including some Reprats McCain,
Lindsy Cry Graham want war they want New World Order, they want war with Russia but this will be nuclear WW3 and everybody, your children, grand children will pay the price for
allowing their poisoning everything agenda for more than 30 years in USA and WE HAVE BEEN SET UP FOR A TRY AT A MUSLIM INVASION OF THIS COUNTRY BY BILL,
Hillarious, OBAMA, KERRY, SOROS AND THE BIASED GOEBELS, HIMLER MEDIA.
ONLY WE CAN STOP THIS EVILS!!!!
Is this President O's big legacy? If this is true, how will it affect the RV?
Russia will have no choice but to use Tactical (Battlefield) Nuclear Weapons to defend Syria once a ground invasion begins within 18 days, by 350,000 troops, 20,000 Tanks, 2,450 military planes and 460 Helicopters from 25 countries massing in northern Saudi Arabia. Syria has warned "any aggressor entering the country will go home in wooden coffins;" Russia has said "any country sending ground troops into Syria without permission will be considered a declaration of war."
Thousands of soldiers from regional countries are set to participate in what is being "called" a military "exercise" media reports say.
Saudi media said some 350,000 forces from Persian Gulf Arab states and a number of other countries will take part in a Saudi-led military maneuver in the area of Hafer al-Batin in northern Saudi Arabia.
In addition to the massive troop build-up, some 2,540 warplanes, 20,000 tanks and 460 helicopters will also participate in the "exercise," dubbed “North Thunder.”
The "exercise" is scheduled to last 18 days, during which the airspace over northern Saudi Arabia will be closed.
Media reports say the "exercise" will be the largest in the history of the region. However, SuperStation95 has done research and there is no known example of this much military power being massed for an "exercise" . . . anywhere . . . ever. It seems quite obvious to any thinking person that the notion of an "exercise" is fraudulent on its face; this is an invasion force and when it moves, it will mean war.
Egypt, Sudan, Pakistan and Persian Gulf Arab states are among the 25 countries that will also take part in the "exercises."
The maneuver comes at a sensitive time after Saudi Arabia announced readiness to participate in any ground incursion in Syria if the US-led coalition decides to start such an operation. (Gee, what a coincidence.)
Saudi Arabia is a member of the US-led coalition that has been conducting air raids inside Syria. The airstrikes have been going on without any authorization from the Syrian government or a UN mandate since September 2014. The Saudi "exercise" is believed as preparation for a possible ground incursion into Syria.
Reacting to the troop deployment, Syrian Foreign Minister Walid al-Muallem said Saturday, “Let no one think they can attack Syria or violate its sovereignty because I assure you any aggressor will return to their country in a wooden coffin.”
Pavel Krasheninnikov, a deputy of Russia’s State Duma, has warned Saudi Arabia that any military ground operation in Syria without Damascus’ consent would amount to a declaration of war.
The civil war which has been wrecking Syria for the past several years has been funded and backed by Saudi Arabia, Qatar, the United States and other countries. Months ago, when Russia entered the fray to protect their ally, Syria, the Russians began impacting the rebels in a big way.
Within the last week, it became very clear that the rebel/ISIS stronghold in Alleppo, Syria would be surrounded and cut-off by the Russians and the Syrian Arab Army. Once Alleppo is liberated by the legitimate Syrian government, the entire rebel effort will collapse.
That's why this past weekend, Saudi Arabia publicly floated the "offer" of providing 150,000 ground troops for a "U.S. lead invasion force to enter Syria to fight ISIS." Trouble is that ISIS is part of the rebel effort and the Saudis, Qataris' Turks and the USA all knew it. If the Saudis, Qataris, Turks and USA enter with ground troops, it will NOT be to "fight ISIS" but rather will be to protect the rebels!
US Defense Secretary Ash Carter publicly replied that the Saudis had a good idea and he would take it up with our other allies. But if Alleppo falls, then the final holdout of the terrorists and rebels, a city called Raqqa, will fall as well and at that point, the civil war is over and the bad guys will have lost.
As of tonight, February 10, 2016, Alleppo is now surrounded and cut-off. The Saudis are getting desperate to help their rebel/terrorist buddies.
The only way the Saudis, Qataris, Turks and USA can possibly _hope_ to protect their rebel pals is to enter in such massive force, they overwhelm the Russians. This triggers another problem: Russia has a doctrine of using tactical nuclear weapons FIRST to protect their interests and their territory.
TACTICAL NUKES MUST BE USED - NO OTHER CHOICE
During the Cold War, when the old Soviet Union posed an invasion threat to western Europe, NATO's war plan called for NATO to use tactical nuclear weapons FIRST to stop the . . . 20,000 Russian tanks and overwhelming troops.
The same way NATO knew that's the only way to stop 20,000 tanks and several hundred thousand man invasion force, the Russians know it too! And the Russians will be FORCED to use tactical nukes in order to protect Syria.
As soon as those troops and tanks begin to cross into Syria, the Russian S-300 and S-400 missiles will begin taking-out the 2,450 military planes and 460 helicopters. The S-400 is probably the single most advanced anti-aircraft system in the world and the aggressor jets will drop like flies.
But when the 350,000 troops and 20,000 tanks start crossing the border, the ONLY solution for the Syrians and the Russians will be to use tactical nukes. Perhaps those artillery-launched nukes would be fired inside Syria, but they would detonate on the border with Jordan, or Iraq (wherever the troops are entering from) and the wind will start carrying the fallout deeper into those countries. Perhaps the nukes would be fired into Saudi Arabia itself (because that's where the mass of troops is coming from.)
Either way, the Arabs do not seem to realize who they are dealing with. Russia is a nuclear super power. Russia will NOT allow itself to be over-run or humiliated in Syria. Russia will do what Russia HAS to do; and an awful lot of Arab troops, who were lead down the primrose path by the US who is probably telling them they have nothing to worry about, will find out what it's like to see a sudden, bright, white flash, as their troops get vaporized.
The U.S. will not strike Russia back on behalf of the Arabs, because the US knows Russia would then start launching missiles into the US heartland. The Arabs will have been lead down the road to utter destruction, by a US President whose allegiance is questionable. Is he Sunni . . . . or is he Shia? Has anyone bothered to verify it? He certainly gave Iran a sweetheart nuclear deal. Iran is Shia, isn't it?
HERE IS HOW THIS WILL BE PRESENTED TO THE AMERICAN PEOPLE
Right now, the mass media in the US is totally silent about how close we are to war. This is by design. When the Saudis and their pals begin the invasion and the Syrians and Russians are FORCED to use tactical nukes to stop them, the American people will suddenly be told "Russia has just attacked our ally, Saudi Arabia, with nuclear weapons. We must enter to defend our allies!" The American people, kept blissfully ignorant of who really started this and why, will say to themselves, "My God, those filthy bastards used nukes . . . .let's get em!" . . . . . and off to war we go.
Obama - if he is Shia - would then achieve another goal: destroying "the Great Satan" as Iran has called us! So we in the US have to ask ourselves, is Obama a Christian - as he has claimed - or is he a Muslim as many have said? And again, if he is Muslim, is he Sunni or is he Shia? We need only look at the sweetheart deal he gave to Iran to get a very good idea of the actual answer!
DIVERT ATTENTION FROM ECONOMIC COLLAPSE
The reason this is going to take place is simple: The government in the US, and those in Europe, need a DIVERSION to shift the public's attention away from the coming economic collapse.
Right now, banks throughout Europe are on the edge of collapse from their bad loans, speculation and corruption. In Germany, for instance, Deutsch Bank has seen more than fifty percent (50%) of its stock value get wiped out, with 40% of that fall since January 1. People are pulling money out in droves. The banks are becoming unstable.
If (or when) Deutsch Bank collapses, they are exposed to "Derivatives" worth $50 TRILLION. When the bank fails, the $50 TRILLION hits the rest of the banks and they collapse too.
In the USA, the "too big to fail" banks are now also heading into collapse because instead of changing when they needed bailouts in 2008, they kept right on doing what they were doing! Now they are all bigger and in worse debt!
The governments do not have the credit or the cash to bail out the banks again, so when the banks go under -- and they will -- the governments need to divert people's attention from the fact that their life savings and retirement moneys have been wiped out; and a "limited nuclear war" is just what they need to shift people's attention away from losing their life savings!
IT MAY ALREADY BE TOO LATE
We may not be able to stop what's coming, but we have to at least TRY. There does not have to be a war.
There is no reason or legitimate interest, in overthrowing the government of Syria and we are backing the bad guys if we continue trying to do that.
If we allow Saudi Arabia and their Muslim buddies to go into Syria, it absolutely, positively will result in immediate war with Russia, and the Saudis are massing so much firepower and armor that the only way Russia can defend Syria is to use tactical nukes.
Once that happens, the US will get sucked-in and our children will be sent to fight and die . . . . all as a diversion from the economic collapse caused by greedy bankers and inept politicians.
Please post links to this article via FACEBOOK, TWITTER, Google+, Pinterest, Instagram, Craig's List and whatever bulletin boards or forums you frequent. We HAVE to get the word out about what is taking place so our fellow citizens are not blind-sided by a war that does not have to take place.
Time is of the essence. There are only a maximum of 18 days left before it all goes to hell, and it may happen sooner than that.
Saudi’s decision to send troops to Syria in an attempt to bolster and toughen efforts against militants is “final,” the spokesman of the Saudi-led coalition force in Yemen announced on Thursday.
Brig. Gen. Ahmed Al-Assiri, said that Riyadh is “ready” and will fight with its U.S.-led coalition allies to defeat ISIS militants in Syria, however, he said Washington is more suitable to answer questions on further details about any future ground operations. “We are representing Saudi’s [decision] only” in sending troops, he said.
Freedom And Central Planning Can Never Coexist 08/13/2015 22:30 -0400
Bond Corruption default ETC Obama Administration Obamacare
inShare2 Submitted by Brandon Smith via Alt-Market.com,
The average person is a statist, whether he realizes it or not. It is important that liberty activists recognize and accept this fact because the truth of our limitations as a movement determines the kinds of solutions into which we should ultimately put our time and energy. The fantasy of a final grand march of an awake and aware majority on the doorsteps of power is just that: a fantasy. Some people might argue that given more time, such an event could be organized or could happen spontaneously. But these people seem to forget that the immediacy of any crisis inspires awareness and cuts the bindings of complacency for only a certain percentage of any given population. With “more time” often comes more complacency, not less.
So, history becomes a kind of balancing act, with crisis generating the necessity of intelligent and moral action in some people but rarely, if ever, in most people (even during the American Revolution, in which patriots represented a stark minority). The reason that the culture of freedom consistently plateaus and remains stuck at underdog status is because human beings are, first, often acclimated to the idea that crises are things that only happen to other people, and, second, they are obsessed with the idea that governments should retain prohibitory and administrative power over the public as a means to "prevent" crisis from occurring (the sheepdog and sheep mentality).
Not all people necessarily “love” their current government, but many citizens tend to see the idea of government as an inevitability of a stable society. They assume pre-eminence of the state because they have never known anything else. Not only that, but as people separate into political and ideological factions, often based on false paradigms (such as the false left/right paradigm), they covet government as a kind of tool or weapon that can be used for “the greater good” if only their side had total control of it. Very few people in this world want to shrink government down to a manageable size comparable to that which existed just after the American Revolution, and even fewer would entertain the idea of erasing central governments entirely. The allure of the federalized state as a means to impose ideological control over others is intoxicating.
Central planning acolytes see society as a a single unit, or engine, in which all the people are parts rather than autonomous individuals. They believe that if any part acts outside of the bounds of the engine, the entire machine could break. According to their fuzzy logic, everything you do as an individual affects everyone else, therefore, the collective state must mold and control each individual's behavior in order to ensure that what you do as a singular person does no harm to the whole. This philosophy is the primary rationale for EVERY push for centralization, but it is based on a faulty premise.
Governments are run by people, people commonly more flawed and corrupt than the average citizen. Central planners adore the use of government as a means to reign in populations and to compel conformity and "oneness", but centrally planned systems always revert to a divided structure in which a criminal minority separates itself from the collective in order to rule over that collective. The elites actions violate the integrity of the engine as they attempt to drive the engine according to their own twisted ideals, leading to disaster and the end of the supposedly safe environment which the central planners had originally claimed was the benefit of central planning. Thus, the central planning model is an inherently self destructive and foolish one.
At bottom, the only viable purpose of any central government is to safeguard individual liberty. All other claims and supposed benefits are irrelevant. Infrastructure, food and water, health, education, public security, etc: All of these issues can be provided for voluntarily at a local level by common people without the aid of a central authority. The original intent of the U.S. Constitution and Bill of Rights was to LIMIT government to the job of ensuring the continuance of a free citizenry. One could certainly argue that that role has been lost; not because of the constitution itself, but because of the lack of vigilance needed to defend the integrity constitution. One could also argue that the very nature of a federal government is one of inevitable corruption; many of the founding fathers did as the document was drafted, after all.
I will say that the constitution and the Bill of Rights are representations of natural law and inherent conscience, and it has taken elitists over two centuries to mostly dismantle them. At this point, a complete end to any form of federalization may be called for, but the founders certainly tried their best to create a government system that could be controlled by the people.
It was war, of course, that was used to dismantle constitutional protections...
Most of the outside or foreign threats we face today as a nation (threats often used to rationalize centralized government and standing armies) or have faced in the past century were directly or indirectly CREATED by our own government apparatus and by the banking class through covert means. Funding and training of Americas future enemies has been a grand pastime for the power brokers and politicians that reside in this very country. Without such people and the structures they exploit, it is not outlandish to suggest that the past hundred years could have been a period of peace and prosperity rather than mass death through engineered war, state culling, and mass enslavement through artificial debt constructs.
In a culture where vigilance is encouraged rather than labeled paranoia, in a culture where productivity is enabled rather than obstructed, in a culture where free thought is treated with interest rather than disdain, government holds no value.
The only people who understand the true nature of government and still value the existence of an overreaching state are the people who would like to take advantage of the unchecked power such a state affords. We often call these people “elitists.” They often call themselves elitists. Big government serves only the interests of these elites. Everyone else is either a hapless victim of it, a useful idiot in service of it, or a revolutionary opposed to it.
When a government becomes a power mechanism for a select few, it has lost all relevance. When a government like ours here in America violates the tenets of individual liberty despite its constitutional mandate, in the name of “protecting” individual liberty, that government no longer serves any purpose. Even further, when a government’s policies are designed only to ensure its own continued dominance rather than the freedom and prosperity of the citizenry, that government becomes separate from the people and is, by extension, an enemy to the citizenry.
Governments and the elites behind them retain control over populations through the use of central planning. Central planning is essentially a bureaucratic structure that bottlenecks productivity, resources, academia and ideas until all progress and expression require approval. That is to say, central planning is a machine that turns rights into privileges. It also sets up bureaucracy as the final arbiter of who is considered an authority in any particular field and who is a “layman.” These designations are not based on individual ability, intelligence or accomplishment. Rather, they are based on subservience and the level of blind faith in the establishment each person is willing to display in order to attain professional status.
Some of the most ignorant people in any given field or profession are often those deemed “experts” by establishment institutions, from politics, to law, to medicine, to economics, to science, to history, etc. The sad fact is mainstream experts are rarely the most knowledgeable, but they are the most indoctrinated.
As central planning gains ground, it moves away from more subtle institutional dependencies into full-bore tyranny. The line between permission and despotism is razor-thin, and this is where we in the U.S. stand today. Most nations around the globe are socialized nations, with central planning as the very foundation on which their societies stand. For the most part, these cultures are disarmed and servile with a modicum of perceived freedom that is treated as a privilege granted by the state rather than an inborn right of natural law. Yes, many societies have “freedoms,” as America does; but the difference is that these societies can have their freedoms confiscated at any given moment on the whim of the political elite. They have no recourse to obstruct such an action and no power to remove the offending system that rules over them when they finally get fed up.
In the U.S., central planning is surely prevalent and socialization is on a fast track. But Americans, whether they know it or not, still retain the ability of independent response — as we saw at Bundy Ranch, for instance, or in the defense of shopkeepers in Ferguson, Missouri, despite threats from government. We will lose our advantage of independent action if we allow the following changes to occur within our culture without a fight.
A disarmed population is utterly useless, philosophically and organizationally impotent, and easily ruled. Take a look at simpering weakling societies like the U.K., which prohibits anyone under the age of 18 to purchase plastic knives and punishes victims of crime for physically defending themselves. Governments that seek to undermine personal liberty ALWAYS disarm their respective populations if they can get away with it. In America, the only reason we have not yet been disarmed is because the establishment understands that revolution would immediately follow any attempt and that revolution would be seen as justified. I believe ultimately that disarmament in the U.S. will not be fully attempted until after a national crisis has been triggered.
Centralized Health Standards
The real purpose of Obamacare was not to provide universal health insurance. Such a task is utterly impossible in an economic system that is in the midst of decline with an aging population and reduced profit opportunities for the young. Socialism works only as long as there is someone from whom to steal money and resources. No, the purpose of Obamacare was to bond the healthcare industry to government in such a way as to make it an official appendage of the state.
Already, we have seen the push for the use of doctors as government informants, the issuance of forced vaccinations regardless of religious orientation or philosophical objection, increased taxation in the name of “harmonization” of care, etc. Beyond all this, the system must continue to perpetuate its own usefulness. And, I have no doubt that one day we will see such things as mandated health appraisals of individuals up to and including psychological health, as well as restricted care based on age, life habits or even ideological orientation. If the state can have your flight status restricted merely for your political beliefs, then why not one day have your access to medical care restricted?
We have heard it said many times that people should be required to attain a “license” before they are allowed to have children, but who gets to decide who is eligible for the “privilege” of children? Well, under a population planning scenario the state and its central planners do, of course. And what makes such people so ethically competent as to deserve this power over the right to family? Not a thing. In many cases, bureaucrats are the most psychopathic and unintelligent people in any given society.
Some people might argue that this kind of development is unthinkable in America and not a legitimate concern. But already in the U.S. we have seen instances of Child Protective Services abducting children belonging to parents with political conflicts with the existing establishment and living habits outside of the mainstream. We also live in a system in which many parents are forced by law to hand over their children to state-controlled schools for half of every weekday (as home-schoolers are attacked as aberrant child abusers). We are only a short step away from a world in which having a child invites as much government intrusion and restriction as rearing a child.
Overt Militarization Of Police
Yes, many people would claim that overt militarization of police has already occurred. I would say that they haven’t seen anything yet. We do not yet live in a country where jacked out cops with armor and M4 carbines stand on every street corner 24/7, but it won’t be long before this becomes our everyday environment. With politicians openly suggesting extreme measures to combat “lone wolf terrorists,” up to and including internment camps for “disloyal Americans” (thanks for at least being honest about your intentions, Wesley Clark), all it would take is one large-scale attack to inspire enough confusion in the population to provide cover for a full-blown police state. Central planning survives and thrives through fear. Fear is defeated through preparedness, planning and mindset.
A person cannot plan or prepare for crisis if he is not allowed to manage his own resources. In Venezuela today, the government has locked down all food production and is rationing out necessary supplies through sophisticated electronic tracking due to economic crisis. Make no mistake, America is just as vulnerable to financial disaster as any Third World nation, if not more so. Resource management will be the inevitable result. In fact, the Obama administration has already positioned itself for resource management through his National Defense Resources Preparedness Executive Order. Government officials will call preppers “hoarders” and argue that no one person should be allowed to have more than he needs. Once again, the argument will be that the self preservation mentality of individuals actually harms the collective.
We already have a centralized and socialized economy for the most part, but private trade and production are still possible. Central planning is designed to wipe out alternative forms of trade and subsistence so that all people can be made dependent on the singular state. As in Venezuela, we should expect that economic declines will be used as a rationale for a clampdown on individual trade. The only way to fight these kinds of measures is for average people to become avid producers and be willing to fight back physically against confiscation and government-controlled rationing.
Beyond trade controls, centralization will culminate in economic “harmony” through multilateral currency schemes, ending in a one-world currency. A single currency system by default calls for a single economic authority, and this by default calls for a single political authority. A one-world currency is not only a fiscal coup for central planners; it is also a stepping stone toward world government.
A cashless system is a kind of unholy grail for central planners because it allows for total control of economic trade. Electronic-based currency systems can be dictated from the comfort of a computer, and savings can be erased or limited arbitrarily. Cashless systems also allow banking structures to operate without the normal consequences of supply and demand fundamentals. Today, even in our massively corrupt financial system, one cannot get around the concrete effects of diminishing demand, endless debt obligations and criminal fiat creation. We are seeing these effects vividly so far in 2015, just as we saw then in 2008. In a completely cashless system, though, debts can vanish, capital can be stolen and shifted away from the public in a more precise manner, taxes can be excised without waiting for taxpayers to comply, and demand can be artificially generated with digital fiat directed to the correct accounts without any trail to follow.
Of course, there will be damages. But, those damages will be foisted upon the general public incrementally until Third World living standards become normal, and no one will be the wiser after a couple of generations. Control of the population would be absolute, while any dissent could be met with immediate financial reprisal, as activists are sentenced to starvation.
The examples listed above may be measured as extreme, but every single one has support within our existing government structure either legally or through actual programs already being implemented. The speed at which they might occur is an unknown, but the desire for them by central planners is absolutely certain. There is no good or benevolent form of central planning. There is no scenario in which the system will not be abused because such power concentrated in the hands of any group of human beings invites abuse. Therefore, the only prudent course, the only solution to the absolute terror of complete state power, is to reduce government down to a shell of its current size or to remove its existence entirely and focus on localized systems and independent trade and infrastructure development. If the federalized state as an edifice no longer exists, then it can no longer be exploited by evil people.
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THIS IS A GREAT ARTICLE THAT SHINES A LIGHT ON PROBABLY THE NUMBER 1 REASON OUR COUNTRY IS BROKE AND GOING DOWN THE TUBES, IT'S BASICALLY THIEVERY BY CENTRAL BANKS:
TO VIEW THE GRAPHS AND CHART, CLICK ON THE LINK, IT WOULDN'T LET ME BRING THEM OVER:
America: Bankrupt And On Borrowed Time
04/07/2015 17:00 -0400
Capital Expenditures Fail fixed Market Conditions Money Supply Reality
inShare Submitted by Thad Beversdorf via First Rebuttal blog,
Thomas Jefferson is credited with the following sage advice, “The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.” And so it seems sometimes the answer is right in front of us all along and we just fail to see it.
We hear a lot of talk these days about inflation. For decades the western world has been misled about a necessity for inflation to grow an economy. This is entirely false. Inflation has no relevance to economic growth; inflation is a depressive force on an economy and it can only come by way of increased money supply.
The apex of the discussion is that price increase does not equate to inflation. Inflation is but one of two paths for rising prices. More specifically, prices can rise by way of supply/demand fundamentals of an asset itself and by way of supply/demand fundamentals of the currency form being used to transact the underlying asset. The prior will raise prices in all currency forms while the latter, being inflation, will raise prices only in that relevant currency.
For inflation to occur demand for a given currency must decline relative to its supply. This can happen if consumers lose faith in a currency and thus demand less of it, or by governments increasing supply without proportional increases in demand. The latter is exactly what we’ve seen over the past 100 years but to such a grotesque degree over the past 8 years that it may have actually shattered the foundation of the economy of which it was driving. This is precisely the chain reaction that Thomas Jefferson had warned us would result from a private central banking system.
Once the economy is broken an epidemic of resource misallocation leads to an immense narrowing of income distribution, ultimately paralyzing the velocity of money; the result being an income-less society save for an elite slice. This leads to mass public and consumer debt creation in an effort to stave off the collapsing natural demand that ultimately ends in deflation when the debt efforts, after a short reprise, actually hasten the collapsing demand by hammering the final nail in the budgetary coffin. At such a point deflation is essentially infinite as people are willing to trade anything for a dollar to purchase food, or inflation is infinite as people will simply circumvent dollars and barter; an interesting paradox that in practice will be a moot point given the vast majority will have nothing to trade for food or dollars because ownership is no longer a reality.
It seems then, that Jefferson’s prediction is theoretically sound, but let’s see if we can find any empirical evidence to either support or refute his cautionary message. We know that dollar inflation has been approximately 2400% since 1913, 2000% of that devaluation coming subsequent to 1971 when Nixon moved to a pure fiat currency. The reason we moved to a fiat currency is to remove the restriction on money supply that is inherent to a convertible currency. We can see in the next chart that inflation is directly linked to money supply, which has seen around 1700% increase since 1971.
This ‘easy’ money accelerated significantly around the mid 1990′s and this has led to a misallocation of resources. To see this, let’s look at the relationship between corporate fixed capital expenditures and dividends. The idea being that fixed capital expenditures are economically productive meaning they lead to economic expansion, whereas dividends divert cash off corporate balance sheets and thus detract from capital expenditures, having a contractionary force on the economy.
The above chart clearly depicts a significant change in the economy’s allocation of corporate resources at the same time money printing accelerated. Fixed capital investment was a much larger share of GDP than dividends up until the mid 1990′s when that began to reverse. Again moving to a market environment that promotes a contracting rather than expansionary economic process. We should be able to see this effect actually taking place via declining capacity utilization. As a result of that we should then see declining labour participation rate and declining incomes from slack in the labour market. Looking at the data this is exactly what we find.
Notice that all three indicators begin to trend downward around 1998, shortly after (and one could suggest as a direct result of) the resource misallocation that began a few years earlier in the mid 1990′s. The next link in this chain should be an expansion of consumer loans in an attempt to offset the resulting demand deterioration from the weakening job market conditions.
We find abundant empirical evidence in the above charts showing an acceleration of consumer debt during the mid 1990′s and again around 2009. And this is perfectly in line with our theory and so we seem to be on the right track. Now the obvious result of massive increases in consumer debt is that ownership is being replaced by indebtedness. That is, to a great extent now we rent or borrower our assets as opposed to owning them.
In the above chart we see that home ownership is now back to the level it was before we ended Bretton Woods in 1971. And it’s not just housing, today about 75% of new car sales are being financed and with longer maturities than ever before. In short, ownership of the 2 major assets typical to the traditional American family has been on a sharp decline for the past 10 years with no signs of slowing.
The American dream is built on ownership because it represents substantive progress by way of building a family’s net worth. A net worth that has declined by 40% since 2007 for all but the very top of the economic food chain. But it’s not only the American dream that is in retreat. The reality is that over the past 8 years increases in public debt have outgrown increases in GDP. The nation is borrowing more than it’s producing and spending more than it’s collecting every quarter. A trend that is to continue and to worsen each and every new year according to the CBO’s own projections.
Where does this leave America and really the rest of the western world whose data will mirror the US?
Bankrupt and on borrowed time.
Testing the Rocker Badge!
Live Exchange Rate