The United States government and the Federal Reserve must keep interest rates near zero – because if they don’t, there will be great difficulty in paying the interest on the debt they’ve accumulated, which could bring it all (the economy and our way of life) crashing down.
There’s one problem though. The only way the United States can maintain their zero interest rate policies is for the world to continue accepting the dollar as the world’s reserve currency. The thing is – they’re not, and plans are nearly implemented to circumvent the United States dollar for major countries such as Russia and China (and others).
The carrot and the stick approach (by the United States) isn’t working so well anymore. The carrot (the strength of the dollar) is becoming increasingly rotten and the stick (the willingness to use the military) has weakened considerably as Americans have grown war weary.
As the dollar collapses, the affect it will have to the ‘man on the street’ at best will be a substantially lowered standard of living — or at worst it will be a complete economic collapse as the $hit hits the fan while we fall off the cliff into complete and utter social chaos.
Even with the recent FED tapering, the fact is that ‘we’ are still borrowing many tens of $billions each month to maintain the illusion that our economic system is healthy. It may be fooling some of the people, but it’s certainly not fooling everyone.
There are only a few ways this game can go – and they all lead to severe pain…
Human civilization has never before been so ‘modern’ and technologically advanced as today. We’ve never had it so good. We are able to live a soft and cushy life, and for the most part can get whatever we want, while there are safety nets for those who cannot get what they need.
Why then in the 21st century (if we have it so good) are so many people becoming ‘preppers’ and becoming ‘prepared’?
“You can ignore reality, but you can’t ignore the consequences of ignoring reality.” -Ayn Rand
Summing up the present (distorted and fraud) economy, Karl Denninger recently said during an interview with Greg Hunter:
On Friday, Reuters reported that one of the world’s largest banks, the Bank of China had sold to its customers a ‘wealth management product’ of the China Credit Trust Co., which is set to mature on January 31.
But the thing is, the ‘product’ does not have the money…
Investors have just been warned that they might not be repaid, stating in a phone interview with Reuters that “a situation completely does not exist in which the Bank of China will assume the main responsibility.”
A mega default here could send shock waves throughout the financial world, and the situation exemplifies the precipice on which we stand…
Americans know deep inside that things are very dire indeed and getting worse by the second. Overwhelmingly, they no longer believe the economic numbers from the government. Lies – all lies and propaganda…