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Trickle-Down Theory vs Trickle-Down Reality

02 Nov

[courtesy Google Images]

[courtesy Google Images]

Trickle-Down Theory

In the aftermath of the onset of the Great Recession of A.D. 2008, the Federal Reserve gave trillions of dollars to major (“too big to fail”) banks and set interest rates at nearly zero.  It was presumed that the banks would lend those trillions of “free” fiat dollars to the public at low, low interest rates.  It was presumed that all of the free currency given the banks would thereby “trickle down” to the great unwashed.

It was also presumed that the public would borrow the enormous sums of “free” dollars at fantastically low interest rates to invest in businesses or just buy stuff.  All the resulting public investment and purchasing was expected to stimulate the economy, and—ta-da!—America would almost see an almost instant “Recovery” from the Great Recession.

Historically, this “Trickle-Down Theory” was based on the unstated presumption that “money” still has a physical reality that prevents it from moving easily to another “jurisdiction” —especially if that jurisdiction is on the other side of the Atlantic or Pacific oceans. I.e., so long as “money” was made of gold or silver, it couldn’t easily move to another country.

Money’s former physical nature caused it to be “trapped” in the U.S..  As a result, creditors who had money to lend were generally compelled to accept whatever interest rate is imposed by the Federal Reserve and/or the federal government.

The presumption that money couldn’t easily move to another country was absolutely valid so long as the “money” was made of gold and silver.  But once our “money” became a fiat currency composed of electronic digits, the presumption failed.   Fiat, digital currency, isn’t trapped anywhere and can flow at the speed of light over the internet to whatever foreign market pays the highest rates of interest.

 

Trickle-Down Reality 

In the aftermath of the onset of the Great Recession of A.D. 2008, the Federal Reserve “printed” and gave trillions of fiat dollars to major (“too big to fail”) banks and set interest rates at nearly zero.

It was supposed that, because the major financial institutions had received trillions of “free” dollars, they’d then generously lend those trillions to the public at fantastically low (near zero percent) interest rates.  However, the banks essentially said, “Screw that.  We’re not running a charity.  We’re not lending ‘our’ money (even though we got it for free from the Fed) to anyone for artificially low interest rates.  Therefore, we’ll either keep our trillions of “free” dollars in our vaults or we’ll lend them out at high interest rates to foreign borrowers to make a good return on our investments.

It was supposed that the American public would borrow enormous sums of “free” dollars at fantastically low interest rates to invest in businesses or just buy stuff and thereby “stimulate” the economy back to health.  However, the “crash” of 2007-2008 had scared the public so badly that they weren’t about to borrow anything and go even deeper into debt—regardless of how low the interest rates were.

Because the banks weren’t lending at artificially low interest rates to Americans, and Americans weren’t borrowing at any interest rate, not much of the Fed’s “free money” was loaned into our domestic economy.  Therefore, not much was spent, and the Trickle-Down Theory—that by giving free trillions to the banks and imposing low interest rates, the banks would generously lend, the public would greedily borrow and spend, and the Great Recession would be thereby quickly quashed—failed.

Very little of the trillions of fiat dollars given to major banks actually “trickled down” to the great unwashed.

Result?  The Great Recession of A.D. 2008 lingers still and the “Recovery” remains almost as mythical as unicorns.

Why, this result?  Because digital dollars are no longer “trapped” by a physical nature within the borders of the U.S..

Today, paper, and especially digital, currency can flee from any country that pays low interest rates and go to any country that pays high interest rates.

As a result, low interest rates—which historically helped stimulate an economy by encouraging people to borrow and forcing lenders to accept low interest ratesmay now have the opposite effect.  Today, low interest rates drive currency out of the local economy in search of other economies that pay high interest rates.  Low interest rates thereby cause the local currency supply to shrink and thereby contribute to deflation.

If this hypothesis is roughly correct, then the Federal Reserve’s policy of imposing artificially-low interest rates (which are justified as a means to encourage inflation and economic stimulation) may, in fact, contribute to deflation, recession or even economic depression.

 

•  According to Bloomberg (“IMF Cuts Global Outlook as ‘Frothy’ Stocks Raise Correction Risk”):

 

“‘In advanced economies, the legacies of the pre-crisis boom and the subsequent crisis, including high private and public debt, still cast a shadow on the recovery,’ the IMF said in its latest World Economic Outlook. . . . IMF Managing Director Christine Lagarde warned that officials need to act to prevent a prolonged period of sluggish growth, a trend she called the ‘New Mediocre.’  Raising growth in emerging and advanced economies ‘must remain a priority’.”

 

How will the Powers That Be (central banks and/or their owners) “raise growth” on a global level without inflating one or most of the world’s fiat currencies?

Since Quantitative Easing (the Fed buying US bonds with freshly-printed fiat dollars) has ended, the domestic supply of fiat dollars is no longer increasing and the currency is not inflating to the same degree as was formerly true.  Judging from the US Dollar Index (US$X) and the currently falling price of gold, the dollar may actually be deflating.

This is not to say that deflation is currently predominant. In any economic scenario, there are elements of both inflation (some prices, like food and stocks, go up) and deflation (some prices, like gold and gasoline, go down).  These indications of inflation and deflation co-exist at the same time. We say that we’re in a period of inflation when the vast majority of prices are rising.  We say that we’re in a period of deflation when the vast majority of prices are falling.

It may well be that we are still, primarily, in a period of inflation.  But it’s also true that evidence of deflation is growing at a surprising rate.  Deflation that seemed inconceivable a year ago now seems possible.  After two or three generations (40 years) of persistent inflation, we’re now left to ponder whether deflation could soon become predominant.

 

•  Three things happen in conjunction with deflation:

 

  • The value of the currency rises. If you could buy a pound of steak for, say, $5 last year, after some significant deflation, you might buy an identical portion of steak this year for just $3. Although most people suppose the steak is cheaper, the truth is that the dollar has gained purchasing power and is more valuable.  Whenever a currency increases its purchasing power, we have deflation.
  • The burden of existing debt grows because debtors are forced to repay their debts with more expensive dollars. Deflation is absolutely ruinous to debtors, to governments that have enormous national debts, and to nations that have debt-based monetary systems.
  • Deflation is at least a characteristic, and perhaps a cause, of economic depression.

 

If the dollar is allowed (or caused) to deflate, the national debt will grow in terms of purchasing power and become increasingly difficult for the U.S. gov-co to repay.  Sooner or later, persistent deflation will not only make it impossible to pay the principal on the national debt but also make it impossible to pay the interest on that debt and render the bonds non-performing.  Once the government openly defaults on parts of the National Debt, the value of the remaining US bonds should fall and the US dollar might be replaced or at least revalued in some sort of “reset” that will cause prices to rise (inflation) rather than fall (deflation).

If the dollar is allowed (or caused) to deflate, the US economy should slow and perhaps slide into an overt economic depression.

Unless the government wants the national debt to be openly repudiated—i.e., unless the government wants a national depression—the government should do whatever it can to increase the forces of inflation.

Strangely, the Fed seems to be currently allowing (or even encouraging) deflation.  I don’t know if this current phenomenon is accidental or intentional.

But I do know that:

 

  • Since the dollar became a pure fiat currency in A.D. 1971, inflation has reduced the purchasing power of the dollar by about 97%. This established, 43-year trend is evidence that government wants  Unless government has decided to intentionally reverse this 43-year old trend, I presume that government still wants and needs inflation.
  • Deflation is absolutely contrary to the government’s self-interest in reducing the size (purchasing power) of the national debt;
  • A prolonged period of deflation risks a national depression comparable to the Great Depression;
  • During a period of deflation, American products become more expensive and less competitive in foreign trade. With deflation, we’ll export fewer U.S. products overseas and have less jobs here at home.
  • Global free trade compels a multi-national currency war wherein each nation fights to prove that its currency is worth less than the other currencies, so its exports are therefore perceived to be “cheaper” and the best buys on the global market. Insofar as global free trade encourages currency wars, global free trade encourages inflation.
  • The fiat dollar can survive inflation for quite a while, but will quickly collapse under the weight of deflation.

 

Therefore, unless:

 

1) The government has simply lost control of the economy and has no means to prevent the current deflation; or

2) The government wants an economic depression—

 

it should follow that the current evidence of deflation (and falling gold prices) should be of short duration.

Although I’m convinced that our government has been seized by a pack of treasonous whores who are actively working to diminish the power and prosperity of the USA, I nevertheless presume that our government is not yet ready to “pull the plug” intentionally collapse our economy.  I know our leaders are a bunch of lying villains, but I presume that that they’re not yet sufficiently villainous to intentionally collapse our economy and plunge the nation into chaos.

My presumptions may be mistaken.  Perhaps government is already acting to intentionally collapse out economy. If so, you’d better have lots of food, water, guns, bullets and gold stored up because God only knows where we’re heading.

 

•  But assuming my presumption (that government is not yet ready to intentionally collapse the economy) is correct, the government needs to restore inflation. What can government do to increase inflation?

Most people vaguely understand that printing more fiat dollars should contribute to inflation.  If government wants inflation, it should restore the Quantitative Easing that it recently terminated and start pumping more billions of fiat dollars into the economy.  As the domestic money supply grows, each fiat dollar should lose purchasing power and become less valuable.  That’s the essence of inflation.

Most people do not understand that raising interest rates should also contribute to inflation.

I.e., as interest rates fall in the US, creditors don’t want to lend into the US because they can’t make a profit.  Therefore, both foreign and domestic creditors lend to foreign borrowers that pay higher interest rates.

While low interest rates were supposed to encourage ordinary Americans to take out loans to buy cars or new homes, the actual effect may have been to drive fiat dollars overseas where they sparked the recent economic boom in “Emerging Economies”.

As low interest rates drove currency out of the US, the net effect of low interest rates was to reduce the money supply that was actually available within the U.S..  As the domestic money supply was reduced, dollars became increasingly scarce and increasingly valuable.  A rising value/purchasing-power of a currency is the essence of deflation.  Thus, imposing low interest rates should contribute to deflation, a slowing economy, and perhaps even a national economic depression.

Get that? 

The Fed prints trillions of fiat dollars for the apparent purpose of increasing the domestic money supply since, by increasing the domestic money supply, the Fed makes each dollar worth less, and thereby causes inflation which they believe will stimulate the economy.

But, when the Fed suppresses interest rates, it drives currency out of the domestic economy in search of higher returns in foreign markets and thereby reduces the domestic money supply.  Reducing the domestic money supply should make each fiat dollar more valuable and thereby contribute to deflation—which most believe will slow the economy and perhaps precipitate a “Greater Depression”.

Which leaves me to wonder, What the helck is the Fed really up to?

Given that the Fed prints fiat dollars to increase the domestic money supply and thereby cause inflation, but also lowers the interest rates to decrease the domestic money supply and cause deflation, has the Fed become schizophrenic?  What does the Fed really want?  Inflation (economic stimulation) or deflation (economic depression)?

The Fed has repeatedly claimed that it’s determined to restore 2% inflation in the U.S. economy.  I’m beginning to wonder if that claim is a lie.

But, assuming the Fed’s claim is true, and assuming that the hypothesis I’m advancing in this article is roughly correct, it should follow that the Fed will not demonstrate a real commitment to causing inflation and thereby stimulating the economy until it raises interest rates.

I understand that conclusion is controversial and so contrary to conventional wisdom that it may strike most readers as absurd.

Still, some fundamental facts remain to support that conclusion:

 

  • Digital currency is no longer trapped within any nation or economy.
  • Creditors will naturally seek the highest interest rates they can find for whatever funds they have to lend.
  • By lowering domestic interest rates, the Fed should cause creditors to lend their currency into foreign markets that pay higher interest rates.
  • As lenders move their currency from the US economy to foreign markets, the domestic currency supply should be reduced.
  • A reduction in the domestic money supply should contribute to deflation.

 

For me, the implications of those five facts support the conclusion that low interest rates contribute to deflation.

If would seem to follow that, if and when the Federal Reserve decides to start raising US interest rates, creditors should be more inclined to lend into the US markets, dollars should flow from the “Emerging Economies” back into the US, the supply of currency actually available within the US should rise and therefore contribute to inflation that, in theory, should “stimulate” the economy and also raise the price for gold.

On the other hand, so long as the Fed does not raise interest rates, I’ll be increasingly inclined to embrace the seemingly irrational possibility that the Fed is actually working to cause deflation and perhaps even an economic depression.

I know who crazy this sounds.  But the logic of the “facts” I’ve listed push me to this conclusion.

 

•  The US national debt has nearly doubled during the Obama administration.  This doubling is evidence of the government’s unsuccessful attempts to print trillions of fiat dollars and inject them into the economy to provide inflation and economic “stimulation”.  That attempted “stimulus” succeeded only in providing economic stagnation.  The economy didn’t collapse, but it didn’t recover, either.

Although price inflation (at the grocery store, for example) is much higher than government admits, we haven’t yet seen the magnitude of inflation many expected after the Fed injected trillions of dollars into the major banks or after the economic stimulation government had predicted would flow from printing all those trillions of “extra” fiat dollars.

Instead, much of the newly-created dollars flowed overseas to escape low U.S. interest rates.

Result?  After all of the Federal Reserve’s heroic printing, our fiat dollars were inflated somewhat (but much less than many expected)—and the US economy remained stagnant and unstimulated.

We didn’t get much inflationary bang for our trillions of freshly-printed bucks.

Why all those trillions of freshly-printed fiat dollars didn’t cause more inflation has remained a mystery.

I suspect that the explanation for the minimal inflation achieved over the past six years was the Fed’s simultaneous determination to impose near-zero interest rates.  Strangely, the Fed has been stepping on the “gas” to cause more inflation by printing more fiat dollars at the same time it’s been stepping on the “brake” by suppressing interest rates, causing an outflow of domestic dollars and a reduction in the domestic currency supply and thereby contributing to deflation.

If my conjecture is roughly correct, it implies that either the Fed is either too dumb to understand that reducing interest rates drives money out of the country and thereby contributes to deflation—or, that they’ve only been pretending to cause inflation (by printing) when they really wanted deflation (by holding interest rates down).

Both explanations are scary.

Either the people running this economy are too dumb to have the job, or the people running this economy never wanted the Recession of A.D. 2008 to end, never really wanted us to inflate our way out of the Recession, but are currently working to cause deflation and an overt economic depression.

 

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17 responses to “Trickle-Down Theory vs Trickle-Down Reality

  1. genomega1

    November 2, 2014 at 11:47 AM

    Reblogged this on News You May Have Missed and commented:
    Trickle-Down Theory vs Trickle-Down Reality

     
  2. palani

    November 2, 2014 at 1:50 PM

    The answer is ‘trickle up”. There is no trickle down. Money is borrowed into existence. Those who borrow frequently experience bankruptcy. Or even worse they experience lifetime servitude to pay their debts off. The Fed and government might want you to borrow more so that the employment rate will look better or the balance of trade or to reduce government deficits or any number of other oddball reasons but the one who creates the money (that would be ‘the debtor’) gets to volunteer into a system where he/she cannot guarantee there will be a checkmark in the WIN column at the end of the day.

     
  3. Toland

    November 2, 2014 at 4:23 PM

    Newly printed money doesn’t get into the hands of consumers until the commercial banks lend it. This explains the lack of significant inflation despite everything the Fed has been doing. Since commercial banks have not been lending, the Fed’s printing frenzy hasn’t reached consumers. Thus consumer prices haven’t gone up that much.

    The reason the Fed changed its tune and is now tightening up is to support the US dollar as the main currency of international trade, central bank reserves, etc.

    No one with a basic knowledge of geopolitics should be surprised by this. The strong-dollar policy has played a central role in the world’s power structure for 70 years. The global Financial Syndicate isn’t going to let go of the US dollar until they find a better basis for their empire, which so far hasn’t happened.

    This cartel also runs the banking system of Japan, which explains that country’s recent move to support the strong-dollar empire by weakening their own currency in relative terms. Expect similar “cooperation” from Europe – another territory under Financial Syndicate control – in the near future.

     
    • Adask

      November 2, 2014 at 4:45 PM

      I’d say that, “No one with a basic knowledge of geopolitics should be surprised by this. The ILLUSION OF A strong-dollar policy has played a central role in the world’s power structure for 70 years.”

       
  4. mrtideman

    November 2, 2014 at 5:07 PM

    Alfred, Have you seen that (as of last Tue., Oct. 28th) the U.S. Mint is selling 1964-2014 JFK silver half dollars (P, D. S + W in proof condition ) for $25.00 each? Or $100 per set of four. Or in other words for twenty five dollars in debased coins from The Coinage Act of 1965 you can buy one fifty (50) cent piece for the ratio of fifty times as much. Or in other words, like here in New Hampshire when us “working stiffs” get our payroll check we ought to be able to “cash” it into the “lawful money” as prescribed by the statute: R.S.A. Chapter 275:43,I http://www.gencourt.state.nh.us/rsa/html/XXIII/275/275-43.htm of then to take to the local Coin Shop for to sell these Coinage Act of 1792 quality coins into the debased ones for to spend in commerce in the marketplace. What does your state have for such a similar statute if any? Here in Laws of N.H. of 1794 we “consent”ed to The Coinage Act of 1792 in Chapter 28 in Vol. 6 @ page 155. See also our N.H. Article 97: http://www.nh.gov/constitution/oaths.html as annotated to this. We never “consent”ed to The Coinage Act of 1965. That has been foisted upon us by “The banksters” of trying to con us into taking inferior coin. It’s time to sue these Bank Directors in court for a violation of their oath to abide by the law in the state in which they do operate, of to comply with that “Pay to the Order” of the name of the employee put there by the employer of an ORDER to the bank to “pay”* as I ORDER the coin as prescribed by law! (;-) To “pay” is NOT to exchange a check being an ORDER to pay into a paper note PROMISE to pay, as technically you are not getting “paid”. Plus by 12 U.S. Code 411 these Federal Reserve Notes are LIMIT-ed to in-house business that the local banks agree to let you have by some custom-over-ride of the law. In the old days they banks would exchange a dollar bill for a silver dollar, but now they do not. Plus as you wrote that: ” The Fed prints trillions of fiat dollars for the apparent purpose of increasing the domestic money supply ” that is technically wrong in the first degree because it is not “The Fed” or Federal Reserve System that prints these but that of it is done by the “Fed”eral government’s Bureau of Engraving & Printing that buys from The Crane Paper Company in Dalton, MAss. and then sells it of ALL such denominations of from the one dollar to the one hundred ($100) dollar bill to “The Fed” for only about 6-cents each. Of when delivered, since somebody robbed the truck once of going from point A to B but were only charged with the attempted stealing of personal property, not money, as not yet monetized. The A = of the BEP to that B = particular Federal Reserve Bank (with the private corporate seal to THAT particular BRANCH bank A to L = 1 to 12, of have you noticed that only the $1 + 2 dollar bills have such regional seals now? – the rest of just the general corporate seal. The Fed is supposed to deposit so much gold bullion with that agent of Uncle Sam OR give over a gold certificate of such WHEN the notes are thus shipped to their member banks in that region. Just the other day I asked for a $100 pack of ones and got a pack from an entirely different region! What’s up with that!? I hear the cries of: “Audit the Fed,” but it ought to be that our Congressmen ought to audit that agent of Uncle Sam who is supposed to be paid this bullion to back up the notes as NOT supposed to be fiat. It’s in their contract with us: Section 16, Part 15 thereof The Federal Reserve Act of 1913. When I wrote to the U.S. Treasury several years ago I asked how much bullion was supposedly placed on deposit or gold certificate given over for the pallet of notes from which my George Washington dollar bill came from and all I got was a letter of to in effect saying of to: Get Lost! So back to your story here of “The Fed has repeatedly claimed that it’s determined to restore 2% inflation in the U.S. economy. ” Well that is not good enough for me. I claim no such percentage as such inflation is that of “taxation without representation”. The gold bullion is supposed to be there to back up what us who claim that these dollar bills be redeemed for the quality of coin as prescribed by law, and if they want to screw their member bankers then so be it. I will not let my local banker off the hook: he WILL pay me what I ORDER and if he has to pay this 50-fold amount then so be it. Another alternative is to visit his local coin shop and buy the well-worn Walking Liberty and/or Ben Franklin half dollars for only $9.00 in the debased coin. I do not require NEW coins, just that they comply with the law!

     
  5. Henry

    November 2, 2014 at 5:21 PM

    Adask wrote: “Strangely, the Fed seems to be currently allowing (or even encouraging) deflation.”

    Strangely? Your own logic seems to imply this is the natural bias of the Fed.

    You argue that the US government, being a debtor, prefers inflation. Does it not follow that the Federal Reserve, being a creditor, prefers deflation?

     
    • Adask

      November 3, 2014 at 9:41 AM

      That would be a logical inference if the Fed and government weren’t working in concert.

      But, is the Federal Reserve really a “creditor”? Insofar as it can “spin” currency “out of thin air,” does the Fed really provide “credit” that is of value? Or is the Fed merely a printing agency similar to Kinko’s?

      If I lend you an ounce of gold that I paid for with the savings from my labor, I’d say I’m a creditor. But what am I if I merely lend you a check for $1,000 that’s NSF and can never be truly cashed? Am I a creditor or a con-artist, or what?

       
      • Henry

        November 3, 2014 at 4:51 PM

        > But, is the Federal Reserve really a “creditor”?

        It certainly is. Credit is their main business. Did you think US dollars were issued by the government? Nay, they’re loaned into circulation by the Fed.

        > Insofar as it can “spin” currency “out of thin air,” does the Fed really provide “credit” that is of value?

        There’s nothing for sale – including the food you eat, electricity you’re using, and gold – that the Federal Reserve’s “out of thin air” credit can’t buy. I’d say this represents value of some sort, wouldn’t you?

        > Or is the Fed merely a printing agency similar to Kinko’s?

        The Fed doesn’t actually print anything. The US treasury does that. So, if anyone is merely a printing agency similar to Kinko’s, it’s the US Treasury filling orders for the Fed.

         
  6. Roger

    November 2, 2014 at 10:14 PM

    Lately we see the Federal Reserve going “from tapering to tightening” in order to defend the U.S. dollar. After a period of inflationary abuses, the Fed (in concert with other central banks) has been forced to shift gears to keep the U.S. dollar strong in relation to other currencies – so that the following status quo will be maintained:

    “Besides being the main currency of the United States, the American dollar is used as the standard unit of currency in international markets for commodities such as gold and petroleum… Some non-U.S. companies dealing in globalized markets, such as Airbus, list their prices in dollars… The U.S. dollar is the world’s foremost reserve currency. In addition to holdings by central banks and other institutions, there are many private holdings, which are believed to be mostly in one-hundred-dollar banknotes (indeed, most American banknotes actually are held outside the United States).”

    http://en.wikipedia.org/wiki/International_use_of_the_US_dollar

    The world’s currency markets know what’s up. That’s why the U.S. Dollar Index has been on a steady rise recently. It hovered around 80 for years. Last month it hit 85, then on Friday it crossed above 87.

    @Henry

    You asked Al the following question: “You argue that the US government, being a debtor, prefers inflation. Does it not follow that the Federal Reserve, being a creditor, prefers deflation?”

    The answer is obvious (yes), so there’s no need to disturb Al over it. I’ve read the article and shall explain it for you.

    The idea is that debtors (e.g. the US government) prefer inflation because it decreases debt in real terms. Specifically, inflation means debtors repay what they owe in dollars that are worth less than the ones they borrowed. Due to inflation, a debtor borrows expensive dollars and pays back cheap dollars.

    As you observe, the same logic works in reverse.

    Thus, creditors (e.g. the Federal Reserve) prefer deflation because it increases debt in real terms. Specifically, deflation means creditors get paid what they’re owed in dollars that are worth more than the ones they loaned. Due to deflation, a creditor loans out cheap dollars and gets paid back in expensive dollars.

    So good catch there, Henry.

     
  7. mrtideman

    November 3, 2014 at 1:03 AM

    Thanks Roger for that wiki link [ http://en.wikipedia.org/wiki/International_use_of_the_US_dollar ] of to the “dollar” as some “basket” currency of preference by the powers that be in the countries of the word of that most of these paper $100 bills are held overseas; like http://en.wikipedia.org/wiki/Saddam_Hussein ‘s bunch of them in the hovel he was found in under the ground. To me a REAL dollar is so many grains of silver in coin form. Like in the question of: animal, vegetable or mineral? What is YOUR dollar or so-called dollar? All this talk of “the dollar” is that of the FEDERAL RESERVE Notes of the CORPORATION and so that “dollar” ought to be capitalized as per their Name, and so The Dollar. “They” want us to believe that multiple bunches of dollars can be carried around in some basket. But that my dollar needs more than a mere wicker basket to hold paper dollar, or dollar bills is the COMPLETE phrase, but a vault, or a cash register, of not just to put the notes into but ALSO for the coins: BOTH. It’s like in that “Twilight Zone” episode with the actor H. M. Wynant of when he insists that: “You MUST believe!” to which I say no: I will not believe in this so as to become a “basket case” that “they” want you to be like that lukewarm frog that they boil to death. Wake up, and read what I wrote above IF Al ever gets it out of Moderator mode of maybe him wanting to see how far you all go down this path of talking “their” language of that somehow without a bullion deposit per pallet that we are what? Supposed to trust them not to print more than us lukewarm frogs can take!?

     
  8. mrtideman

    November 3, 2014 at 10:26 AM

    Hey Alfred, You “manipulation” of this discusswion is very interesting, in like putting mine of above @ 1:03 a.m. earlier this morning on hold until AFTER yours of 9:41 a.m. of like treating my first post still in moderation mode as a hidden footnote eh?> of when, if ever to post? After the readers here get

     
    • Adask

      November 3, 2014 at 10:50 AM

      Hey Tideman, your paranoia is equally interesting.

      I don’t “manipulate” the timing of any comments on this blog. I can’t. It’s technically impossible. With one exception: for reasons I don’t understand, WordPress requires me to “approve” some comments but not all or even most comments.

      Therefore, if your 1 AM comment required my “approval” before it would be posted and I went to bed at 9:30 PM last night and didn’t get up until about 8 AM this morning, and didn’t read my email until around 9 AM, then I wouldn’t have had the notice, need or opportunity to approve your comment before 9 or 10 AM this morning. If that strikes you as evidence of some sinister plot to ruin the effect of your carefully-timed comments, welcome to the world of paranoid delusion.

      In fact, I don’t recall being called on the “approve” you comment. But it may be that I entered my own comment on the subject before I was called on to approve yours. If not, and if there was any delay in posting your comment, WordPress is responsible and I suggest you forward your complaint to them

      In the meantime, my recommendation is that you try to eat more vegetables and get more sleep.

       
  9. mrtideman

    November 3, 2014 at 11:58 AM

    O.K. Al, I get you now, of I think that WordPress holds any and all comments over a certain # of characters, letters and words, etc. for you to “approve” not in content, as I don’t require you to “agree” 100%, but that of to post, as like that “free speech” phrase of you are allowed to say +/or write such, but that I do not have to “take” or “like” it, of this is a work-in-process as I’d like to share with you and others what I have learned over the years and decades of finally coming down to “brass tacks” as “they” say. So here is what I had already written before reading your reply, of thanks for the explanation:

    “Hey Alfred, You “manipulation” of this discusswion is very interesting, in like putting mine of above @ 1:03 a.m. earlier this morning on hold until AFTER yours of 9:41 a.m. of like treating my first post still in moderation mode as a hidden footnote eh?> of when, if ever to post? After the readers here get

    …[ get] a dose of reality? of when I tried to type this word or phrase it blipped out on me and registered it instantly here, of thanks for the what? cut-off of to await what the others might have as a homework assignment from you, the teacher, to read that before my reply to this of your 9:41 a.m. one?

    Of yes, with my private audit attempt of the U.S. Treasury in trying to find out from what pallet #___ my George Washington dollar ($1.00) bill came from and what, if anything, was put up in bullion form for that to be distributed to their member banks by 12USC411 as required by Section 16, Part 15 thereof the contract being The Federal Reserve Act of 1913 they do work “in concert” of this cover-up of less and less gold bullion with possible kickbacks to the government agent(s) who are supposed to play by the rules of the game, being THE contract, but what? and where? of WHO determines how much gold bullion is to be placed on deposit per pallet? Or a gold certificate* from the Fed to Uncle Sam supposedly guarantees that if we call it in it will be there. A call-in, like when so many of the “Sheeple” demand/ claim payment on the notes as a promise to pay. Not us directly, but their our local banker under 12USC411 as these notes are for internal purposes only of loaned to us on a temporary basis of ever since 1968 I think it was when the direct window for to exchange for the silver dollar it represented closed. But that the in-direct still exists, but try getting your “bankster” to pay on such is WHY I did write my first attempted posting here of HOW to FORCE the issue through the payroll statute, of I would really like for if you +/ or any reader here in whatever state could likewise find out what your labor laws read and DO it of to claim the “lawful money” too, since as a statute is not technically THE law, but may be an unlawful statute as the law IS the constitution (as there can be no such unlawful law) and that as Roger Sherman put into Article 1, Section 10 of the U.S. Constitution that only of gold and silver coin for both. Of yes, the Congress may regulate, modify or whatever in quantity of gold or silver within the lawful money but not the quality, of which the latter is reserved to that of the commerce coins per The Coinage Act of 1965 as “legal” money.

    This being typed on my Hotmail account for a copy & paste to here that be what now? because of its length of back to moderator mode? (;-) Then so be it if so, as for you to incorporate more as to spoon-feed to the others is O.K. with me so long as we all get to the truth about these crooks in government in conspiracy with the Fed. This con or “spin” , as you call it, of “like” printing from a machine at KINKO’S is that IF the Fed really did monetize the notes by the deposits they are really lending “credit” of something of value, but at what law-ful $dollar amount? If the note cannot be redeemed for 100% of what it is supposed to represent it’s a con by the Papa Fed to their member banks and us who, by custom over-ride of the law therefore “consent” that A = B = C that we will pay back in these type of dollar bills what was loaned to us, but when we trade such for our labor, that is where the THEFT is! That’s why I only accept “pay”ment on the check to me in coin, of the debased variety taken on a temporary basis while giving them a verbal and written U.C.C. Notice of Dishonor of to return for The Coinage Act of 1792 coins later, but if not of then to sue them in civil court, as I tried the criminal way once by calling in the local C.O.P.s., but which Police Academy never taught them these basics, of they’re part of the problem of that they SAY that they are Law EnFORCE-ment, but are actually customs officers, as in this custom over-ride of the law.

    So you’re right Al, when the bank loans you “like” a check (or their notes) that’s for Non-Sufficient Funds, that can never be cashed for you directly anymore, other than into the debased coin variety, they are not a lawful creditor, but may be a legal creditor and so a con-artist to that degree. *Plus has anybody ever seen these gold certificates? I don’t mean the yellow sealed ones of years ago that circulated in the public, but that of the $100,000 and $1 million ones, etc. given over to that agent of “Uncle Sam” for the deposit on THAT pallet of notes in lieu of the gold bullion. If my local bank, as a member of the Fed doesn’t pay me the silver dollars as prescribed by law here in New Hampshire then I want the civil court jury to direct their verdict like to order that the local bank order the Papa Fed to pay and if they don’t then for me to bring in that agent of Uncle Sam who dealt with this regional Fed in Boston for Region 1A to let me lien that gold certificate if any or if not then to sell the local bank building at a Sheriff’s Sale so that I can get paid this “lawful money”. The lawsuit has already been filed last month, of it yet to be served by Deputy Sheriff for the bank to file an Appearance and Answer with thirty (30) days of the service of process and so by mid November to mid December.

    Plus on the proof-read another thought came to mind of that what exactly are these $1.00 bills? Exchangeable into only the debased variety of coin? or both? Of the bearer having to what? prove they got such for their payroll check, but having consented to that to be exchanged for that only? unless contested? In the old days it was everybody at par value of they got that silver dollar for the note. Now what do we have to do? Attach a copy of our payroll check to such equal number of bills as the amount on the check to be paid in the “lawful money”? Reference R.S.A. Chapter 275:43,I here in New Hampshire and the equivalent in YOUR state? Or what? “They” say that you “consent”ed to such debased coin up-front and so you waived your rights? Then that #x amount of gold bullion representing only ___-cents of every dollar bill is backing for us who know AND assert our rights. You, Al can be like the next Tupper Saussy, as like in his The “Main Street Journal” of the 1980s of to spread the word that of us “working stiffs” to get our salary or wages paid in the quality of coin of thus all this political talk of increasing the minimum wage in quantity of dollars is not really needed when The “Sheeple” wake up and demand/claim the quality of coin they deserve. “

     
  10. henry

    November 4, 2014 at 6:35 PM

    If the fed significantly raises interest rates, how will the US government pay interest on the debt without either raising taxes or cutting spending on government programs? About 8 trillion dollars will have to be refinanced next year at the higher rates. Your analysis may be correct but wouldn’t make the financial system very brittle? If one company can’t repay it’s loans, or one country opts out of buying US notes, or an earthquake occurs, or a strike, or a dozen other events could cause the system to crack. The total, on-budget, US debt is approaching 18 trillion but the total debt (mortgages, student loans, car loans, …) is approaching 59.5 trillion and the unfunded liabilities (social security, Medicaid, …) is approaching 115.5 trillion. the sum of these numbers divided by the number of taxpayers divided by the number of taxpayers is more than 1.5 million dollars. The median worker makes $28,000. Health care per capita costs was $7,000 in 2009 and higher today. The people are getting poorer. The average amount of savings per family is less than $9,000. Almost 93 million adults are not in the labor force.

    If the financial system does crack, what follows?

     
    • Adask

      November 4, 2014 at 7:56 PM

      A very bumpy ride.

       
    • Toland

      November 4, 2014 at 8:37 PM

      “If the financial system does crack, what follows?”

      Look to recent precedence for a guide. What has followed elsewhere in the world under similar circumstances?

      Answer: Austerity measures for the poor and middle-class put in place by emergency managers who, coincidentally, all happen to be former employees of Goldman Sachs, JPMorgan Chase and Citigroup. Meanwhile, the national birthright gets privatized into the hands of the international billionaires who now own everything with which America’s future prosperity could have been built.

      That’s the modus operandi of the NWO in this phase of their plan for global conquest. We the People can help their dream come true by losing confidence in our constitutional rule of law, disengaging as much as possible from the political processes that will decide our fate, assuming a passive position, and staying glued to the TV screen as the international billionaires have their way with us.

       
      • palani

        November 5, 2014 at 6:43 AM

        “If the financial system does crack, what follows?”

        The financial system became cracked in the 20’s and what followed was Roosevelts action in 1933 of declaring a monetary system not based upon gold. To this day the civilized world has not recovered so the answer …. what we have now is what follows. Expect more of the same. Imagine a world where a soda costs $10. Where a ditch digger makes a grand a day yet yearns to have his big Mac to cost $4.95.

         

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