There is too much liquidity in the Banks and in Wall Street, but None in the streets of America. And people still wonder how this will end. How did the Federal Reserve morph from a provider of temporary liquidity to being in control of the entire money supply via digital minting! The Fed seems to NEVER retrieve or retire from what they initiate. Is it really consistent with our form of government that the unelected and unaccountable would have so much POWER? M2 was increased by 27% in less than a year. Who decided? Who approved? One man made the decision to expand the NATION's money supply to that degree? And create massive inflation? Article 1 section 8 gives Congress the power to mint, and that power can NOT BE DELEGATED. This new Fed since 2009 when Bernanke promised QE would temporary, has aided and abetted an increase of the national debt by 20 TRILLION DOLLARS!!! The monetary nuclear fission reactor was sold to the public as producing free energy created out of thin air. Created debts are the fuel, splitting the currency by debasement, producing inflation, the power which runs the State. Unfortunately the engineers were economical with the truth. The monetary fission system is fundamentally unsound. The spent debts pile up as highly toxic waste, emitting interest and poisoning the nation In perpetuity. The Federal Reserve must be shut down for good. Under QE the Fed buys treasuries and bonds from the US Treasury, from banks, or from the market. In reverse repos the Fed sells securities to the banks in return for their excess cash. The privately owed Fed is only accountable to their owners, the bankers. Their duo mandate is pure theatre for the masses. It's simply about wealth transfer from every entity to the bankers. Plan and Protect yourselves accordingly. Welcome back to The Atlantis Report. You are here for your daily dose of the truth, the whole truth, and nothing but the truth. Please take a second to hit the like button, hit the subscribe button, and don't forget to also hit the notification bell. Thank You. This inflation vs. deflation argument is so silly to me. It’s quite obvious that if the markets were left to their own devices, that deflation would win. There, the deflationists can be happy knowing that they are mathematically correct. However, the only thing even more obvious than that is the undeniable fact that governments and central banks simply will not allow that to happen. And history shows this quite clearly. I’ve heard people like Harry Dent say deflation is coming since gold was $800/oz. It’s going to $400 he’d say. When it got to $1200, he’d say it was going back to $800. At $1600 he said it was going back to $1000, etc etc. Every single time deflation starts to win, they just print more. And they will never stop. To think that they would stop printing and let deflation win, would require one to believe that they will voluntarily let bankruptcies soar, banks fail, economies crumble, and send millions of angry people into the streets in violent riots, all for a lack of printed currency. And doing so, would risk seeing the mob destroy the central banking system and sending the central bankers to the gallows. No central banker is going to allow that when they can simply push CTRL-P instead. The notion that they would allow a guaranteed disaster today, when they could print instead and maybe cause a disaster tomorrow, is just nonsensical. It ignores all past precedent and history and basic human nature. If you flip a coin and head is inflation and tails is deflation, there’s a 50/50 shot that either could win. But if you flip the coin heads and call the game over, inflation wins. If you flip tails and then say we have to flip again, then deflation can’t win for more than a few seconds until the next flip. And eventually, no matter how many times it lands tails, if you just immediately reflip, then eventually it has to land on heads. That’s very much what this inflation vs deflation argument is like. The deflationists can be very smart and have very sound arguments. But in the end, the game is rigged and the only possible outcome is inflation. Can central banks allow rates to remain near zero, nominally, and negative, on real terms, while inflation heats up?” Yes, of course they can. Should they? No, but they absolutely can do so. If a central bank is willing to print enough currency, they can make the interest on the bonds be whatever they want. But for arguments sake, imagine that they have to buy 100% of the bond market in order to keep rates low because there is zero private demand for them. With no bond market available to provide a market signal as to the currency’s value, how would anyone know it’s value? You’d have to look at its ability to be exchanged for goods and services from foreign markets, that’s how. And just how willing do you think a foreigner would be to accept a country’s bits of paper, when he knows that there’s absolutely nothing behind it other than a printing press! Not so much right? So then in order to conduct trade, the foreigner would require an enormous amount of the currency. In essence, commodity prices would skyrocket, which would feel like inflation to the citizens. In the absence of a real functioning bond market, the commodities and forex markets will be what ultimately determines the currency’s value. And then of course, what inevitably happens is that the country will need something, say food, so they will print whatever it takes in order to not starve. Then prices quickly spiral upward until the currency is worthless when the foreigner won’t sell them food for any amount of currency, no matter how ridiculously many zeros are printed on it. This is the wheelbarrow of cash for a loaf of bread time. We’ve got a ponzi scheme of inflated asset prices. What do you do now? It’s a catch 22. Let it collapse and feed back into the financial system. Carry on inflating it and create an even worse crash at some time in the future. Central bankers prefer option two. Hopefully someone else will be in the hot seat when the whole thing collapses, and it will be their fault. Neoclassical economics produces ponzi schemes of inflated prices. When they collapse it feeds back into the financial system. Neoclassical economics still has its 1920’s problems. At the end of the 1920s, the US was a ponzi scheme of inflated asset prices. The use of neoclassical economics and the belief in free markets, made them think that inflated asset prices represented real wealth. 1929 – Wakey, wakey time Why did it cause the US financial system to collapse in 1929? Bankers get to create money out of nothing, through bank loans, and get to charge interest on it. What could possibly go wrong? Bankers do need to ensure the vast majority of that money gets paid back, and this is where they get into serious trouble. Banking requires prudent lending. If someone can’t repay a loan, they need to repossess that asset and sell it to recoup that money. If they use bank loans to inflate asset prices they get into a world of trouble when those asset prices collapse. As the real estate and stock market collapsed the banks became insolvent as their assets didn’t cover their liabilities. They could no longer repossess and sell those assets to cover the outstanding loans and they do need to get most of the money they lend out back again to balance their books. The banks become insolvent and collapsed, along with the US economy. When banks have been lending to inflate asset prices the financial system is in a precarious state and can easily collapse. What was the ponzi scheme of inflated asset prices that collapsed in Japan in 1991? Japanese real estate. They avoided a Great Depression by saving the banks. They killed growth for the next 30 years by leaving the debt in place. What was the Ponzi scheme of inflated asset prices that collapsed in 2008? It was a nearly $14 trillion pyramid of super leveraged toxic assets that were built on the back of $1.4 trillion of US sub-prime loans and dispersed throughout the world. We avoided a Great Depression by saving the banks. We left Western economies struggling by leaving the debt in place, just like Japan. It’s not as bad as Japan as we didn’t let asset prices crash in the West, but it is this problem has made our economies so sluggish since 2008. In 2021, the world is a ponzi scheme of inflated asset prices. The use of neoclassical economics and the belief in free markets, made them think that inflated asset prices represented real wealth accumulation. The central banks have to keep pumping in liquidity to stop all the ponzi schemes collapsing. When banks have been lending to inflate asset prices the financial system is in a precarious state and can easily collapse. The central bankers were struggling to keep all these ponzi schemes going before the pandemic. Why is neoclassical economics so bad for financial stability? We never did learn as much as we should have done from 1929. Neoclassical economics produces ponzi schemes of inflated prices. When they collapse it feeds back into the financial system. Neoclassical economics still has its 1920’s problems. What’s wrong with neoclassical economics? 1) It makes you think you are creating wealth by inflating asset prices. 2) Bank credit flows into inflating asset prices, debt rises faster than GDP and you eventually get a financial crisis. 3) No one notices the private debt building up in the economy as neoclassical economics doesn’t consider debt. What is the fundamental flaw in the free market theory of neoclassical economics? The University of Chicago worked that out in the 1930s after last time. Banks can inflate asset prices with the money they create from bank loans. Henry Simons and Irving Fisher supported the Chicago Plan to take away the bankers ability to create money. “Simons envisioned banks that would have a choice of two types of holdings: long-term bonds and cash. Simultaneously, they would hold increased reserves, up to 100%. Simons saw this as beneficial in that its ultimate consequences would be the prevention of “bank-financed inflation of securities and real estate” through the leveraged creation of secondary forms of money.” Margin lending had inflated the US stock market to ridiculous levels. Richard Vague had noticed real estate lending balloon from 5 trillion to 10 trillion from 2001 – 2007 and went back to look at the data before 1929. Real estate lending was actually the biggest problem lending category leading to 1929. The IMF re-visited the Chicago plan after 2008. Existing financial assets, e.g. real estate, stocks and other financial assets, are traded and bank credit is used to fund the transfers. This money creation of bank credit inflates the price. You end up with a ponzi scheme of inflated asset prices that will collapse and feed back into the financial system. At the end of the 1920s, the US was a ponzi scheme of inflated asset prices. The use of neoclassical economics and the belief in free markets, made them think that inflated asset prices represented real wealth accumulation. 1929 – Wakey, wakey time Why did it cause the US financial system to collapse in 1929? Bankers get to create money out of nothing, through bank loans, and get to charge interest on it. What could possibly go wrong? Bankers do need to ensure that money gets paid back, and this is where they get into serious trouble. Banking requires prudent lending. If someone can’t repay a loan, they need to repossess that asset and sell it to recoup that money. If they use bank loans to inflate asset prices they get into a world of trouble when those asset prices collapse. As the real estate and stock market collapsed the banks became insolvent as their assets didn’t cover their liabilities. They could no longer repossess and sell those assets to cover the outstanding loans and they do need to get the money they lend out back again to balance their books. The banks become insolvent and collapsed, along with the US economy. When banks have been lending to inflate asset prices the financial system is in a precarious state and can easily collapse. What was the ponzi scheme of inflated asset prices that collapsed in Japan in 1991? Japanese real estate. They avoided a Great Depression by saving the banks. They killed growth for the next 30 years by leaving the debt in place. What was the ponzi scheme of inflated asset prices that collapsed in 2008? It was a nearly $14 trillion pyramid of super leveraged toxic assets that was built on the back of $1.4 trillion of US sub-prime loans, and dispersed throughout the world. We avoided a Great Depression by saving the banks. We left Western economies struggling by leaving the debt in place, just like Japan. It’s not as bad as Japan as we didn’t let asset prices crash in the West, but it is this problem has made our economies so sluggish since 2008. The last lamb to the slaughter, India They had created a Ponzi scheme of inflated asset prices in real estate, but it collapsed. Now they need to recapitalize their banks. Their financial system is in a bad way, recovery isn’t going to be easy. This was The Atlantis Report. Please Like. Share. Leave me a comment. Subscribe. And please take some time to subscribe to my backup channels, I do upload videos there too. You'll find the links in the description box. You will also find a PayPal link if you want to make a donation. Thank you wholeheartedly to all those of you who have already donated. Stay safe and healthy friends!
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