UNITED STATES (VOP TODAY NEWS) – Recently, more and more often there are talks in alternative media about a possible Third World War. Usually this is associated with the fact that a “nuclear conflict” is inevitable.
But in a world war it is not necessary to fight nuclear weapons. Now we are seeing the first shots in the world economic war, as the Trump administration is preparing to apply trade tariffs with far-reaching consequences.
This action can justify destructive attacks on the US fiscal system by China, Japan, Russia, the EU, the OPEC countries, etc.
The last attack is the discharge of their debt obligations in the US and the loss of the dollar’s status as a world reserve currency.
Of course, the economic “world war” between countries in itself would simply be a cover for an even more insidious internal war against the world economy by the central banks.
There is an old misconception that central banks always manipulate economic conditions to make them seem “healthy,” and that the main problem of central banks is “to protect the golden goose.” This is not true. There is real evidence that central banks have consciously created financial crises throughout history.
The question that newcomers always ask in the field of alternative economy, why do the heads of central banks tear down the system from which they benefit? This question is based on an erroneous understanding of the situation.
First, there is an assumption that economic systems are rather static. In fact, huge amounts of wealth can be operated at the speed of light and at someone’s whim. The collapse of one economy or several economies does not necessarily mean the collapse of the wealth of a specific banker. Even if wealth was their main goal, world banks and central banks do not consider any particular economy as a “cash cow” or a “golden goose.” Judging by their behavior in the past, most likely, they consider national economies simply as storage tanks.
Banks can pour their wealth, which they create from the air, into one or more of these many available tanks. This wealth can circulate for a while in a reservoir, and then they can spend all their wealth overnight. One tank for them is valuable no more than any other, and sometimes it is useful to sacrifice one or another reservoir.
The alleged destruction of the national economy is often used as a means to achieve a higher goal. Usually this “bigger end” means using the crisis as a justification for centralizing power or transferring power to the public in the hands of an elite class.
Such transitions have happened many times, in particular, it was a liquidity crisis of 1914 (immediately after the creation of the Fed), which led to World War I and the subsequent accumulation of financial power by banks.
Or an artificial “bubble” in several classes of assets created by the Fed in the 1920s. due to low interest rates. “Bubble”, which then burst after an aggressive rise in interest rates at the beginning of the Great Depression. This collapse coincided with other artificially created economic crashes in Europe and Asia, which led to social despair, the growth of communism, fascism and World War II. This crisis strongly influenced the banking sector, as thousands of small independent banks were destroyed, and several large banks absorbed all assets. And let’s not forget that World War II led to the creation of globalist institutions such as the UN, the IMF, the World Bank, laid the foundation for the creation of the EU, etc.
Each new economic collapse consolidates property and bureaucratic control in the hands of the same class of technocrats. And each collapse is associated with a very important economic factor – a huge debt dependence.
And now let us take the present era of the growing crisis and how central banks, such as the Fed, fan the fire of the catastrophe. I would like most of all to focus on the debt situation to show how the Fed can create an explosion, controlled demolition of our financial system. How does the debt situation in the US look like today?
– Consumer debt bomb –
The total US household debt increased by $ 13 trillion at the end of 2017, significantly exceeding historical highs. This is the fifth year in a row that there has been an increase in household debt, including credit card debts, car loans, mortgages, student loans, etc.
This trend suggests that the “economic recovery” has so far not in fact been based on a legitimate creation or the revival of wealth, but on an even greater increase in dependence on the same debt that helped lead to the collapse of 2008. The Fed’s money printing did not affect consumers, as was promised initially.
Despite the fact that these sectors of consumer debt did not always use zero interest rates, like banks and corporations after the collapse and profitable process of bailout, their rates are now growing along with rising rates of the Fed. This affects many classes of assets, including housing markets and auto loans.
The harsh reality is that since the Fed raises interest rates, all other areas of the economy are under pressure. The average citizen, with his record levels of debt, is now exposed to the machinations of the central bank due to an arbitrary shift of one data point – “inflation.”
– Corporate debt bomb –
This debt bomb is perhaps the least understandable. Corporate debt and rising interest rates may cause a stock market crash for some time, but analysts only recently realized this.
Today, institutions such as S & P Global Ratings note that at least 37% of the 13,000 corporations surveyed have a level of debt that is even higher than in 2007 when the Lehman collapsed and the credit crisis began.
However, concerns are not just about debt obligations. Consider the fact that corporations use low interest rates to borrow incredible amounts of cash for the sole purpose of buying their own shares. Redemption of shares is basically a legal form of market manipulation, in which companies buy shares from the public and significantly reduce the number of real shares on the market, thereby artificially increasing the value of each share as a whole and keeping the Dow in green.
Redemption of shares was the main driver of the longest “bull market” in history. The “bull market” is so fake that even the mainstream media have recently doubted its reality. The redemption of shares is entirely dependent on cheap debt, and cheap debt disappears against the background of an increase in the Fed interest rates. A natural reaction in the stock markets will be a disaster.
Some people may wonder whether the Fed does this “intentionally” or they simply do not understand what they are doing. I would like to recall the recently published FRS reports from 2012, in which Jerome Powell, now chairman of the Federal Reserve, has repeatedly spoken about the negative reaction in the markets, after the Fed begins to reduce its balance and raise interest rates,
It is believed that Jerome Powell himself knows exactly what will happen when the interest rates rise, and he still continues to raise them, and also to reduce the balance of the Fed much faster than originally stated to the public. How can anyone in their right mind claim that the Fed deliberately does not reduce the American economy?
– National Debt Bomb –
The wick of this debt bomb will burn much longer than other bombs, but after a potentially global trade war (World War III), the question arises as to how long it will take before large US treasure hunters such as China retaliate in their revenge shares.
Given that Trump refuses to oppose the ongoing increase in the ceiling of the national debt and the addition of an infrastructure spending plan of $ 1.5 trillion, it is unlikely that our national debt will continue to grow. Therefore, foreign investment is necessary.
It is important to remember that the Fed was the largest buyer of US debt, or “buyer of last resort”. Now the Fed stopped quantitative easing and quickly reduced its balance. Thus, the only buyers are foreign central banks and investors. The Fed, most likely, will not intervene if the trade war turns into a plum of Treasury bonds. Or they will not interfere, until it’s too late to stop the crisis.
During the eight years of Barack Obama’s presidency, the state debt, in fact, doubled. This was a rather volatile level of issuance of debt obligations, even for a country with a currency that has the status of a world reserve currency. If we lose foreign investment and the status of the world reserve currency, this accumulation of debt will continue to pursue us.
It is important to remember that, whatever happens in our economy and the world economy, central banks, such as the Fed, have completely contributed to the creation of “bubbles”. The Fed knows exactly what it does.
The economic war may in some cases be as destructive as the nuclear war. It can destroy entire groups of the population, breed tyrants, enslave people’s minds. Such wars are very serious. And to all who are guilty of the emergence of these wars, it is necessary to treat extremely harshly.
