Tuesday, September 27, 2011


U.S. economy on ‘knife edge’ of contraction: Fed economist

The U.S. economy is on a 'knife edge' between growth and contraction and monetary policy tweaks do not seem to be helping, the Dallas Federal Reserve's top economist said on Tuesday.
Any debt-based economy, whether the Fed, the ECB, the IMF, etc. is a pyramid scheme. It works only if ever-widening populations of new borrowers can be found to take out loans for homes, school, medical care, cars. etc. to allow creation of new money which circulates through commerce until it is used to pay the interest on the old money. But, and here is the trap, total aggregate debt always outstrips the total aggregate money in circulation. When new borrowers cannot be found, the system, starts to come apart. At that point, Keynesian economics says that the government has to step in and borrow on behalf of the citizens who have stopped borrowing, to keep plunging them deeper into debt to the bankers.
That is what "growth" means in a debt-based economy; an increase in the size of the total; aggregate debt. The word "growth" is used because ti the unenlightened, "growth" sounds like a good thing. But it isn't. IN the world of debt-based currencies, growth means sinking deeper into unpayable debt, and eventual debt-slavery to the bankers.
There is nothing that the bankers and governments can do with this system that does not increase the debt faster than it increases the money supply.
In this way the basic freedom of the people to refuse to involve the bankers in their lives is removed from them. A life spent in servitude working to pay interest is now mandatory, either directly through credit or indirectly through taxation on the national debt.

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