Creating a bunch of money out of thin air isn't a recovery by any stretch of the imagination. If it were, we would never have to recover from anything. The Federal Reserve's Monetary System is coming to an end. The monetary system is a major component of the whole economic system. Despite that, today we take it for granted and don’t even ask ourselves how it works and if it is the best solution available or the correct way to manage things. Even though it appears to be stable, history shows that monetary systems changed periodically in the last century (20–30 years on average). The main difference between our current monetary system and the previous monetary system is that today it is entirely based on FIAT Currency, in contrast to older monetary systems that were backed by gold. The costs of the Vietnam war led to the US abandoning Bretton Woods. The dollar was no longer backed by gold but by oil, the petrodollar. 75% of oil transactions and 60% of international trade is conducted in dollars. The world has been pumping up the US economy this way. The US Dollar is today backed with oil , the oil beneath the ground in Saudi Arabia and all the other countries that only accept US Dollar in exchange for their oil. If that wasn't the case, the 1971 debacle would have blown up and ended before 1980. Think of the countries that sell (or sold) oil in currencies other than US Dollar - Russia, Syria, Iran, Libya, Iraq (before we invaded), Venezuela, etc. All countries on our hit list". When Euro-accepting Saddam invaded US Dollar-only Kuwait we saw one of the fastest US military buildups in history quickly put an end to that. All of our pointless wars haven't been about the OIL, it has been over the petro-dollar. The whole petro-dollar scenario that occurred in tandem with removing the gold standard is what has kept the dollar as the world reserve currency since 1971. 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. The Fed is The Mother of all Recessions. The US government continues to borrow and spend at a torrid pace, running massive deficits month after month. The US national debt currently stands at nearly $28.5 trillion. That doesn’t account for the trillions of unfunded liabilities. And there is no end to the spending in sight. There are trillions of dollars in new spending programs coming down the pike. The debt phenomenon isn’t limited to the US. Countries all over the world are following the same path. The world is awash with government bonds as countries borrow more and more in a vain effort to keep up with their spending. Economist Malachy McDermott likens the international bond market to a payday loan scheme. Needless to say, it’s not something anybody would advise getting caught up in. If there is one thing every honest money-saving advisor would agree on, it’s that a payday loan is a bad idea. Taking a high-interest loan backed by nothing but your word to pay off your current account to fuel consumption with no capital investment is just leading you on the road to ruin. However, this simple message of living within one’s means does not seem to have reached the gilded ears of central banks and governments around the world. As inflation rises (who could have guessed the borrowing binge of 2021 would have resulted in higher inflation?), both the EU and American governments are now caught between a rock and … well, a rock. Trapped into a cycle of borrowing to cover current account expenditure, even debt-resistant economies like Germany and New Zealand need to keep on this self-destructive path. The collateral used is bonds, about as useful and as stable as ever; the international bond market has exploded in the last ten years. Some of these modern bonds (In all their shapes and forms) are now also backed by CACs (collective action clauses), meaning that should the creditors agree, they can reduce the amount of payout on the bond if the country issuing the bond is falling behind. Unfortunately, this does pave the way for one of two very bad outcomes: The bonds are bought by friendly creditors like the European Central Bank (ECB), large blocks that will lean favorably on the side of the issuer due to a roundabout political method. As an example, Mario Draghi has more than a few friends in the ECB (being the former head of the organization) and is now prime minister of Italy, taking on oceans of debt. However, once the large political elements decide on the reduction in value, the smaller commercial holders will lose out, and insurance companies that have large holdings of national bonds will take a commercial hit. The bonds are bought by unfriendly nations like China, and they refuse to allow the CAC to be activated, meaning that countries that have issued billions will not be able to burn any bondholders (as Iceland was able to) and will be thrown into further economic turmoil, with the controlling stake of what happens in the hands of rivals. To return to the initial analogy, a bond is similar to a payday loan in that the only promise behind it is that the person taking the loan will have money to repay in the future at an agreed price. For the CAC, now imagine your payday loan is being funded by people in your neighborhood and that this debt can be freely sold to anyone. It’s fine if it ends up in your mates’ hands, but should it end up with that neighbor still annoyed about your house party last Hallowe’en, things could get messy. And what of the money itself? The crux of the payday loan economist’s arguments is that all of this money will yield future dividends. It will be invested and reinvested and slosh through the pipes, creating jobs and money and whatever else they think sounds appeasing. But we know this doesn’t happen. Malinvestment, expensive vanity projects, and the discouragement of savings will mean this money would have been better burned than spent, at least we could have gotten utility from the heat. In the midst of this, our old friend Mr. Krugman, the genius who thought that the internet would be a failure and one of the architects of the 2008 crash, has been shouting from his high horse about leprechaun economics again. Unashamedly offensive (under the placating guise of “Fortunately, the Irish have a sense of humor”. Thank you Mr. Krugman, but we didn’t find caricatures in Punch funny and we don’t find you funny) and consistently wrong, Krugman cannot see the value in Ireland maintaining a low capital gains tax. However, his tax and spending binge plans (nothing has changed since Keynes) are the epitome of reckless consumerism. He and his payday cronies want to create a utopia where no one ever really has to pay anything back, and there is unlimited credit and resources. But Mr. Krugman, I’m afraid the Irish do find a pot of gold at the end of their Rainbow in the form of Jobs, FDI (foreign direct investment), and a better balance of trade. What we find with these payday loan economists is an unpaid bill, possibly in the hands of our enemies, that will have to be paid, as the party doesn’t last forever, and eventually, someone needs to be paid. The Fed claims that America has never been better in terms of economy. Mixed signals are coming out of the US government that raise speculations about a new recession. The government says there is a possibility of a recession, but US manufacturing has already sunk into recession in June after two consecutive quarters of decline. Why? All this is happening as a result of the trade wars, a slowdown in China and other trading partners. The US Federal Reserve says manufacturing fell by a 2.2 percent annual rate in the April to June period. The total industrial production has lost 1.2 percent, in both cases the second consecutive quarterly decline. Experts say tariff uncertainties and a general slowdown in the global economy are the reason behind the dive into recession. Economists warn that an uptick is unlikely in any time soon and the economy won’t be on a track to be sustained in the coming months. Many wonder how everything came to this, especially after the Tax Cuts and Jobs Act of 2017, which allowed a tax credit for employers. At first, there has been a meaningful improvement in the pace of economic growth. It not only lowered taxes but featured reforms to business taxation that improved the incentives to invest domestically and keep headquarters in the US. Yet, the trade policies are ruining everything. The aluminum and steel tariffs hurt consumers of metals far more than they helped US producers. The global growth was slowing down, but the escalating trade war with China amplified the crisis. In a Ponzi economy (debt-based financial system), the debt must grow exponentially. When the serf aren’t getting the job done then the government picks up the slack. Regardless of who borrows the currency into existence, it is still an exponential function or you have a liquidity crisis like we did in 2008. Yes, the end game is an implosion of the financial system, but EVERYONE should know that by now. When the US Bond Market goes deeply negative, you'll know the monetary system has failed. Out-of-control deficits and negative interest rates are indicators of a failing currency. I believe the plan is to keep the economy artificially propped up with borrowed money so our congress will feel more and more free to keep spending. They are led to believe there is plenty more where that came from due to very low borrowing rates of US treasuries. So when the economy does collapse and workers are laid off, and corporate profits collapse because people are buying less, the result will be a great reduction in revenue going into the US and state treasuries. So we have all this spending allocated, but very little money coming in. Everything will go haywire. The yields on US treasuries will skyrocket and the fed will stop secretly printing money in order to buy them. Banks that have heavily invested in equities and securities will fail. The government will have to compound the situation by laying off people. A domino effect, the likes of which we have never seen, will be the result. Total collapse of the world economy. Conspiracy theory? Yes. Would it make a good movie? Sure, why not. Will it happen? We'll have to wait and see. Calling what is about to happen a recession is like calling Noah's flood a drizzle. What's gonna happen? First we will have hyper deflation as most of the major corporations and tax donkeys default on their debt. Then we will have hyperinflation as the Fed bails out everyone with tens of trillions of Papiermarken released from helicopter drones (except for the mothership which will be piloted by Powel.) Then the people in despair will call out to their gods in the central banks to save them, which they will agree to do in return for their first born sons. 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. 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