Tag Archives: fiat

On foreclosures fraud, QE and coming new spiral of deflationary forces.

There isn’t anyone at the (nominal) helm who didn’t understood from the very git-go that the only possible way out was a resumption of organic credit growth. All the fraud, lies, deceit, corruption and violation of centuries old jurisprudence were justified (at least in their minds) by national security concerns.

The power-elite have always know that there was a black whole comprised of many different elements, one of which being title insurance, related to challenges in re-securitizing the ponzi. More importantly, they knew that they had at most two years in which to blow another bubble, anywhere/any kind, to get the herd moving once again in a speculative fashion.

Empty nonsense talk from European policy makers.

It is time to end globalism, time to end European Union, time to abandon Euro currency and shut down the Brussels parasitic state once and for all. European people don’t need their stinking opinions on how to run their lives. The sooner this modern economic and political systems come down, the sooner we’ll all breathe easily. It applies to all countries around the world.

How did the US economy get itself into deflation and why we are going through a deflationary crash.

One important aspect of this mechanism that is seldom mentioned is that the modern debt inflation implies that debt is never payed back and that every year it increases by at least the amount of interest. That means that millions of borrowers simply borrow more to pay off previous principal + interest as dutiful debt slaves they are. That is why debt levels are roughly doubling every decade or so. But what happens when debt growth stops? It is not just that nobody is taking on more debt, the actual principal is being destroyed either via defaults or pay downs. That is, if level of debt is staying constant that means that the principal is actually shrinking by the rate of interest, roughly speaking. This is very deflationary in and of itself. And this is what the privately owned Federal Reserve statistics are showing with regards to most privately held debt in USA. More precisely the consumer and other private debt outstanding is actually shrinking since the beginning of 2009 according the reports that are regularly published by this privately owned Federal Reserve and can be verified on its own website.

Credit crisis: What comes next?

As the ongoing debt crisis continues, we have transitioned from Stage One, the initial Wall Street impact of debt-deleveraging, to Stage Two, the Main Street impact, and are now well into Stage Three, the coordinated Fiscal and Monetary response to the debt crisis. The question, then, is what comes next?

Deflation In A Fiat Regime?

In Austrian economics and the definition I use when I speak of inflation is a net increase in money supply and credit. Deflation is the opposite, a net decrease in money supply and credit.