The bankers have set in motion the final stage in the collapse of the euro, the pound and the dollar. Let me work backwards from the immediate to the more long term. The economy is about to hit a wall in Europe and the United States with the rest of the world to follow.
Ben Bernanke, the Chairman of the Federal Reserve Bank, created two trillion dollars and lent it to the big banks. The banks used this two trillion dollar gift to buy US Treasury bonds. That was called sanitizing the money. Which means that newly created money was not put into our hands to be spent so it was not inflationary. Just recently that has changed. Bob Chapman says the banks have just begun a new program to lend that money out into circulation. With fractional reserve banking a 2 trillion dollar loan is deposited into the big banks. It appears as a credit to the banks and they can even under the old rules loan out 20 trillion dollars. This as you can easily figure out will be highly inflationary. This new stage is called debt monetization.
Let me emphasize this point. The current M2 US Money Supply is about ten trillion dollars. Bernanke loaned out (i.e. created) 16 trillion dollars. As I said previously, over 6 trillion dollars of that money went to European banks to buy the toxic mortgage debts the New York banks had sold them. Bernanke did that to keep the biggest criminals in history out of jail. Now he is going to let the banks loan out the two trillion dollars he loaned them originally to buy bonds. But fractional reserve banking will allow them to loan out 20 trillion dollars. So if we add 16 trillion to 10 trillion we should get an M2 Money Supply greater than 10 trillion? Right. No. Not according to the way Ben counts money. But surely adding 20 trillion dollars to ten trillion will increase the money supply 200%. And that is why I say that inflation is coming to the stores in your neighborhood. It might take awhile but it is coming.
I will have to disagree with Bob Chapman’s interpretation of why they are doing monetizing debt. The banks until recently have killed all job creation by refusing to loan to small businesses. This is part of the consolidation program where the big corporations use government regulations to add costs to small businesses and use the banks to cut off their credit to force them out of business. An example in America would be the animal ID and the Premises ID regulations. Tysons chicken can buy one ID for millions of chickens, cut up the chickens so uncleanly that they are all infected with salmonella and throw chicken parts into the river. But a small farmer has to pay more than his potential profit from the sale of his chickens to obey the federal regulations and avoid fines, legal fees and even jail for failure to comply. This forces the small family farms out of business, allows the big corporations to buy them out for a few dollars and raise prices to the consumer. This centralizes all power into the control of the New York and London banks who own everything including the government.
I do not dispute with Bob Chapman the fact that the banks will go from sanitizing debt to monetizing it and that this will spur inflation levels over the next two years. I also concede that the banks might loan out money and that some of it will be given to small businesses. I also concede that all that newly created money will juice up the markets and might even lower the current unemployment rate in America from 23% to a mere 22%. And I will further concede that they will use this huge money spurt to keep the economy going for awhile longer.
But my take is that the majority of those dollars Ben Bernanke just allowed to be monetized will go into acquiring every last thing of real value before the bankers deliberately crash the system. This is part of their long term strategy to bankrupt you, steal your pensions and savings, cut your wages and cut your benefits. A good way to phrase the policies dictated by the bankers to Obama, Cameron, Sarkozy, Berlusconi and Papandreou is this:
‘You must have less so bankers can have more. A lot more.’
The present rate of inflation according to the statistician John Williams at Shadow States is 11% in America and 12% in the United Kingdom. It will go a lot higher given that the banks will soon switch from debt sanitization to debt monetization. If you live in a country where you know debt monetization will not happen, you will still have to suffer from Ben Bernanke’s exportation of inflation. Suppose Jamie Dimon and Blythe Masters at JP Morgan in New York get their hands on half a trillion dollars at 0.078% interest. If anything they buy goes under, they can sell it to Ben Bernanke at 100 cents on the dollar. If they cannot lose, then they will be emboldened to speculate wildly on acquiring companies and buying up commodities. You will pay a lot more when those commodities get to the store shelves. And everyone in the world will pay those higher prices no matter conscientious your nation’s banks are.
I would like to comment on a few current events. The Rothschilds who own BNP Paribas and Santander banks were forced to put money into Soc Gen (Societe General) to keep it running for another few weeks. The biggest Italian banks including Unicredit are on the ropes as are the Royal Bank of Scotland and Barclays in England. The CEO of Dexia, the largest bank in Belgium, was forced to resign. The CEOs of UBS and Deutsche bank went public saying the European taxpayer had to pay more taxes and receive even fewer benefits. Left unsaid was the bankers plan to monetize debt and to inflate away your ability to buy food and pay your bills. But as I just said,
‘You must have less so bankers can have more. A lot more.’
The CEOs of the banks were out warning Europeans that they will have civil war and martial law if they do not give every last euro to the bankers. Let me explain once again the fallacious nature of a fractional reserve banking system. There is absolutely no way you can avoid a bank collapse. It is inherent in the design and the bankers knew it when it was created. This system goes all the way back to the banks of Venice that went bankrupt in 1348. The bankers were allowed to escape with their loot to Wales and to the Netherlands where they took their old banking practices with them.
When a bank loans you ten thousand euros or dollars, you are obligated to pay back the ten thousand plus one thousand more in interest. Please note that you are obligated to pay back more money than he created. That loan cannot be repaid until the banker creates more money by creating even more money. There is a school of economics which says the government must borrow more money if unemployment is high and everyone else is afraid to borrow as they fear they cannot make the payments. Well, if the businessman can’t afford to make the payments, neither can the unemployed taxpayer. This fraudulent school of economics has dominated academia and the Western governments since the 1920s for a reason. That reason is because it is good for bankers. And the corollary is that you and your family do not count for anything.
Presidents Lincoln and Kennedy saw no reason why the government should have a national debt. They thought it was preposterous that the government gave the right to create money to the banks. Then the government gave the bankers Treasury bonds in exchange for the money the government should have created in the first place. Since the bankers do not create enough money to pay the interest, the government must borrow more and more until it reaches its limit and even goes beyond that. The US national debt is not 14.6 trillion dollars. It is more than 20 trillion dollars if you count those Freddy Mac and similar bonds.
The unemployment rate is 23%. That debt is unpayable. It was known by the bakers when they created this system that it would fail. They have been doing this for over 700 years.
No unpayable debt will ever be paid by the borrower.
The bankers know that. They just want to raise taxes and have Austerity cuts so they can squeeze every last dollar, euro and pound out of you. Then they will intentionally collapse all of the currencies .
On the horizon for September is the crisis in Greece and the German Bundestag vote on Frau Merkel’s policies to bail out the euro. She is a traitor to the German people. She is selling them, their businesses, their family farms, their pensions, their savings and their paychecks to the London and New York banks. If she had a conscience, she would be ashamed of herself. Her party lost their sixth straight local election. She has no coalition partners left as the Free Democrats left. She is facing a revolt led by the 81 year-old former Chancellor Helmut Kohl. Merkel only has 239 of 622 seats in the Bundestag. She depended on the Free Democrats for their 93 votes to form a coalition. The Social Democrats and the Greens are crazy people who do not understand money and business. The Merkel government could collapse by the end of September. It will be interesting to see if the euro lasts until October or even November. The euro will go first because it is an artificial construct and the Europeans have no love for it. The pound will go next because they are so closely entwined with the continent. Then the New York banks will be asked to pay a couple hundred billion dollars in Credit Default Swaps (a kind of insurance) they will owe on those failing European bonds. I predict they will refuse to pay. The New York banks are broke and cannot pay. Ben Bernanke will step up to replace the Germans as the euro’s cash machine. He will create as many trillions of dollars as needed to keep things going for as long as possible. He might loan some out to the insolvent European banks and even buy more toxic assets. He might even do more currency swaps with his ECB counterpart Jean Claude Trichet. Incidentally, his name Trichet in French means cheater. That is the most likely scenario at this point.
When will it all collapse? I do not know. But I do absolutely guarantee you that whatever the inflation rate is today in your country it will be twice as high by the end of next year.
Lest anyone accuse me of anti-Semitism, I have not mentioned that Trichet, Bernanke and Mervyn King, the head of the Bank of England, are all Jewish. They obviously were not selected for their positions because they are smarter than we are. My dog would be a better Fed Chairman than Ben Bernanke.
You can hear the Bob Chapman interview here. Warning the man doing the interview is rather crude for some tastes.