Every dollar in new debt adds just 3 cents to America’s GDP. Does that mean that we can increase our GDP by a trillion dollars if we raise the US national debt from $18 trillion to $51 trillion?
No. It does not. In the 1950s we added $2.5 billion to our GDP if we added a billion to our debt. But we are now in a downward spiral. Jim Rickards says we could go negative. By that he means that we could reach a point where the addition of another trillion dollars to the nation debt will actually decrease GDP and send us into another Great Contraction or Depression far worse than 1929-1939.
I define a Depression as a period in time when Unpayable Debts are cancelled en masse. We have more Unpayable Debts than anytime in history. We are headed to the Greatest Financial Crisis ever recorded unless we have worldwide Debt Cancellation.
Note: Depressions cancel debts. Because debt based currencies like the Federal Reserve Note require you to take on a debt before you can create money you are digging a deeper hole every time you let a Banker devise a rescue scheme that does not include scientific Debt Cancellation and the creation of a debt free money like Lincoln’s Greenbacks.
Jim Rickards is an adviser to the CIA and to the Pentagon. I would listen to him but not quite accept what he says at face value. He says that when, not if, the crash comes, that the only banking institution with a balance sheet that can be expanded to save the world is the IMF. Rickards is a member of the Council on Foreign Relations so his loyalties are known. Bankers Uber Alles. My loyalties are elsewhere.
China was arrogantly rebuffed by the Obama administration in 2010 when they asked for a greater role in the IMF. The Chinese have since created an alliance through the BRICS nations (Brazil, Russia, India, China and South Africa) with more than 100 nations who have dedicated themselves to removing the dollar as the world’s reserve currency.
China could apply by September 15, 2015 to join the 4 nations whose money is currently accepted as part of the IMF’s basket of currencies. The alternative is that they wait until 2020 to apply. Today the SDR basket consists of the euro, Japanese yen, pound sterling, and U.S. dollar. To add the yuan to that basket China would be required to open its gold vaults for inspection. Rickards says the Chinese have thousands more metric tonnes of gold than they publicly admit. He talked to a high level gold transportation executive who did an off the books clandestine delivery to China which involved lots of well armed PLA soldiers.
China could open their gold vaults late this summer prior to their IMF SDR application. The amount of gold in their possession is likely so great that the entire world would question whether the US had anything other than gold plated tungsten bars apart from what they stole from the Ukraine. The US has exported thousands of more tons of gold than it has mined. The 144 million ounces they stole from Libya is probably already in China.
The point is that China follows the military doctrine of Sun Tzu. Prepare for the war and defeat the enemy before the first battle. China might be able to declare victory as early as September.
The Chinese could demand a devaluation of the dollar when they become the fifth SDR currency. The Chinese pegged their yuan to the dollar after the treasonous US government had passed NAFTA which closed 57,000 manufacturing plants and ended American 12 million jobs. When the Chinese pegged their yuan to the dollar, they froze out their competitors in Mexico and in Asia. But the dollar peg acts as a subsidy to the American government and has forced the Chinese to accumulate trillions of US dollars in cash and Treasury bonds.
The Russians and the Chinese have been selling Treasury bonds and buying gold and gold mines. The Chinese have been pledging American Treasury bonds as collateral to take out loans to invest all over the world. They announced their plan to invest $100 billion in Africa at their 2010 Beijing Conference. They are bailing out Argentina and are talking to Venezuela. And China has just recently pledged $250 billion in investments to Latin America. I think the Chinese are dumping large quantities of dollars.
Jim Rickards said that the first devaluation of the dollar will be 20 to 30%. But he said there would be several dollar devaluations until the dollar was devalued 80%. This would raise the cost of imported goods 500% to US consumers. That would reduce half of America to abject poverty and cause Nationwide Food Riots.
This need not be.
If Unpayable Debts create Depressions, then we ought not to allow Bankers to charge us interest for creating our money out of nothing.
If Bankers increase the Money Supply 10% in order to add 10% to our debts (i.e. loan us money), then they ought not to be rewarded with interest payments. They offered nothing of their own to us. On the contrary everyone with savings and with wages lost purchasing power when Bankers increased the Money Supply. So why don’t we benefit from money creation? We should because we bear the burden of reduced purchasing power.
If government created the printed currency and the checking account money, then we could all benefit. If the Money Supply grew at approximately the same rate as GDP, then the ratio of money to available goods and services would remain constant. This would offer us stable prices.
America would need to create $550 billion a year in new money if we returned to normal growth. I would like to spend $200 billion a year on building new infrastructure and repairing the old. If your state had 2% of the US population, then your share would be $4 billion a year in free money.
Currently, new bridges and schools are financed from bonds. And like home mortgages most of the payments go to interest. Why should the bank make more than the men who built your house or that new bridge? We ought to finance all infrastructure from newly created money at zero cost to taxpayers. America will need 20 years to catch up with the backlog of repairs and to modernize the country’s physical assets.
If you combine this $200 billion a year in aid with Debt Cancellation of federal, state and local bonds, then you can understand how easy it would be to eliminate property taxes on homes.
As I have said, we need Debt Cancellation. Catherine Austin Fitts said Wall Street stole $40 trillion from us and will steal tens of trillions more. It is only fair that we fund Debt Cancellation by arresting the Bankers and seizing their assets. I have said that if we had a military coup of junior officers, that they could invade Lichtenstein, the Cayman Islands and other offshore bank havens to seize assets. Of particular interest would be the lawyers who would know the corporate names of hot money investors. A lot of that stolen money is invested in America under foreign corporate names. All those bonds, shares and real estate investments need to be seized.
The alternative means of cancelling Unpayable Debts are Hyperinflation like Germany in 1923 and foreclosures like 1933 America. Either one at this time could destroy America, Europe and most of the world.
We must have a non-interest bearing, debt free currency like Lincoln’s Greenbacks to be combined with Debt Cancellation to be funded by asset seizures from arrested Bankers and other criminals.
Only after these events have taken place can we say Bankers Uber Alles has ended.
Related articles:
How And Why An American Military Coup Could Save The World
https://vidrebel.wordpress.com/2013/04/25/how-and-why-an-american-military-coup-could-save-the-world/
In the next article IMF economists admit that debt free money is best.
IMF Economists: ‘We Were Wrong.’ Will Someone Please Tell The Press And The Politicians.
https://vidrebel.wordpress.com/2012/08/19/imf-economists-we-were-wrong-will-someone-please-tell-the-press-and-the-politicians/
Video: GMO Ticking Time Bomb, The Bankers Want You Sterilized And Then Dead
https://vidrebel.wordpress.com/2012/10/07/video-gmo-ticking-time-bomb-the-bankers-want-you-sterilized-and-then-dead/
The next article gives some background on the tens of trillions of dollars stolen form taxpayers.
The Essential Catherine Austin Fitts Reader
https://vidrebel.wordpress.com/2012/09/17/the-essential-catherine-austin-fitts-reader/
Source