Fake-Money Reparations
Thursday, 6/25/2020 09:01
Pass a fake $20 and get killed. Pass $1 trillion, get praised...
The FAKE-MONEY system has created two very different countries,
writes Bill Bonner in his Diary of a Rogue Economist.
To put it in its starkest form, in one of them, you get killed for passing a fake $20 bill. In the other, you get your mug on Time magazine's cover as a "hero" for passing trillions of them.
In one of them, you get 33 times more "stimulus" money than in the other.
In one of them, you can expect a good job with a rising income. In the other, you'll be lucky if you have a job at all.
These two Americas weren't the product of natural economic evolution. They're the sour fruit of a corrupt, fake-money system.
The fake-money system makes something as loony as reparations seem plausible. We wonder about what else might be coming down the pike.
We begin with a look at what happens when the fun stops. That is, when the T-Bird gets taken away. Here's MarketWatch:
"Stephen Roach, Yale University senior fellow and former Morgan Stanley Asia chairman, has a warning for US Dollar bulls. The prominent economist says that the era of the US buck may be coming to an end and is forecasting a 35% decline soon in the US currency against its major rivals, citing increases in the nation's deficit and dwindling savings."The lecturer said during CNBC's 'Trading Nation' on Monday that the rise of China and the decoupling of the US from its trade partners is setting the stage for a dramatic weakening of the US currency in the next few years that is likely to end the supremacy of the monetary unit as the world's reserve currency."
The Dollar is a kind of "circuit breaker"...the weakest link in the whole fake-money chain. The feds have almost unlimited power. They can pay off their cronies and make the rich richer. They can give $1,200 checks to everyone.
They can build bridges...attack poor foreign countries...hand out free money to poor people...provide bread and circuses for the masses...outfit their spooks and their goons...subsidize...bribe...hire...lend...and spend until the cows come home.
In short, they can do almost any damn fool thing they want – as long as they can pay for it.
But all of these transactions take place in US Dollars. And while they can produce as many Dollars as they want, they can't force people to take them seriously. Generally and eventually, the more you "print," the less they are worth.
As the fake Dollar goes, so goes the empire. That is, they go down together.
It's always more dangerous coming down a mountain than going up. And neither the illustrious Federal Reserve chief, Jay Powell, nor the stable genius in the White House can think of any better policy than to tie us all to the fake Dollar...print more and more of them...and stumble down Everest.
Meanwhile, the rot at the heart of the system is causing Americans to move to the extremities. Red or Blue...conservative or liberal...for or against.
And the two sides are moving farther and farther away from each other.
Donald Trump seems to be firmly in charge of one side – pitching "law and order" as a campaign theme.
The other side has yet to find its voice. Democrats chose Joe Biden as their candidate. But in a period of late, degenerate empire, the center turns to mush. People distrust and dislike "the system." They know it is corrupt and inept.
They want a solution...and a strong leader – a Maximilien Robespierre, Vladimir Lenin, or Juan Perón – to take them to the promised land.
In Biden, they have chosen the status quo. Even if he wins the election, we doubt that will take them very far.
Because the one policy that both left and right agree on is money-printing. To simplify, Mr.Trump favors printing money for corporations, bridges, walls, cronies, the military, Wall Street, and the Deep State factions that support him.
The Democrats, on the other hand, favor a universal basic income, free medical care for everyone, free education, more "social programs"...and more money for the Deep State and Wall Street, too. (And maybe even reparations.)
But US savings are already tapped out. If the feds were to borrow honestly, they would have to let interest rates rise – which would deepen the recession.
Alternatively, they could raise taxes to pay for these programs...But that, too, would simply weaken the economy they claim to be "stimulating".
So, there's really only one choice. All of this spending – whether by the right or the left – will have to be covered by "printing-press money."
Already, Mr.Trump's regime has printed more fake money in a shorter period of time than any government in the history of the world. He has spent...and borrowed...so much that even his Republican colleagues are alarmed. Here's CNSNews:
"A coalition of conservative leaders sent a letter to President Donald Trump and Senate Majority Leader Mitch McConnell (R-Ky.) warning that the congressional spending in the coronavirus must stop because it's getting very close to $10 trillion, which is more than the government spent fighting the Revolutionary War, Civil War, and World War I and II combined."
The US deficit is edging up to 20% of GDP...And yet, the feds are promising even more fake money.
On the table is Trump's plan to spend $1 trillion on infrastructure. From Bloomberg:
"The Trump administration is preparing a nearly $1 trillion infrastructure proposal as part of its push to spur the world's largest economy back to life, according to people familiar with the plan."A preliminary version being prepared by the Department of Transportation would reserve most of the money for traditional infrastructure work, like roads and bridges, but would also set aside funds for 5G wireless infrastructure and rural broadband, the people said."
Also, here's the Democrat's plan. CNBC:
"If House Democrats have their way, a second batch of checks would be deployed to qualifying Americans. That's based on the HEROES Act it passed in May."Those payments would be similar to the first round – up to $1200 per individual or $2400 per couple. And this time eligible dependents would stand to receive $1200, up from $500, for a maximum of three per family."
Where does all this money-printing lead? What happens when the T-Bird gets taken away?
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