Throughout the past year there has been some speculation that World War III is imminent. When the general public thinks of war, we conjure up images of horrific bloodshed and even the launching of nuclear weapons. But there is a more insidious weapon that is actually about to devastate economies around the world. What we do know is that the Trump Administration, being so ignorant about foreign affairs, is ready to unleash a barrage of retaliation against our trading partners around the world. These tariffs you are considering, if implemented, could very well be a justification for destructive attacks on the very precarious US financial system by China, Japan, Russia, the EU and OPEC nations along with many other countries.
The way this will play out is that these countries will begin to shed their US debt holdings and in doing so will end the dollar as the world’s reserve status. This is only on the surface. The real danger is an internal war waged against the global economy by central banks. It is the same banks that throughout history have deliberately created financial crises and collapses. Remember the financial crisis of 2008. That financial catastrophe for millions of Americans only made financial institutions that much richer when the US government and the Federal Reserve pumped trillions of fresh cash back into banks too big to fail. . If the US dollar were not the world’s reserve currency, the panic of 2008 would have made the Great Depression look like a picnic.
Today, large sums of wealth can be transferred at the speed of light. The collapse of an economy or economies does not really mean the destruction of the bankers’ wealth. It is the banks themselves that see the national economies as they say mother holding containers. The way this works is that banks can pour their wealth that they can create out of thin air, as long as the US dollar is the world’s reserve currency, into one or more of these containers or economy. They can also circulate that wealth within the container or economy for a while and then dump all of their wealth at any time.
We have to remind ourselves that the destruction of a national economy can be exploited as a means to a greater end. Typically, this so-called higher end means using the crisis to justify further centralization of power or the transfer of power from the public into the hands of the people behind the bankers. Throughout history there have been such transfers. The liquidity crisis of 1914, just after the Federal Reserve was established, led to World War I. Let us not forget the hoarding of financial power by the banks when the League of Nations was created. In 1920 the artificial bubble in multiple asset classes created by the Federal Reserve with very low interest rates. That bubble burst when interest rates rose, causing the Great Depression. The Depression in the US coincided with other fabricated economic disasters in Europe and Asia that led to the rise of fascism and World War II. All of this greatly benefited the banking establishment, as thousands of smaller banks were smashed. This was the beginning of the World Bank, the United Nations, the International Monetary Fund, and the beginning of the European Union. When we realize what has happened we find that in every economic calamity bureaucratic ownership and control is consolidated into an oligarchic class. And, with every financial catastrophe, comes a massive reliance on debt.
Today, we are in an era of burgeoning crisis and believe it or not, the Federal Reserve is fueling the fires of disaster. A disaster that will unleash and explode, a controlled demolition of our financial system. Remember the massive dependency on debt? What we have today are three ticking time bombs, all capable of causing untold mass destruction. Consumer debt: The total debt of American households at the end of 2017 exceeded $13 trillion. the highest in history. Over the last 5 years consumer debt has increased. by the end of 2018, projected consumer debt will be even higher. Credit cards, car loans, mortgages, student loans, etc. all indicate that the so-called economic recovery is all smoke and mirrors. There has been no legitimate creation or revival of wealth. There has just been a greater reliance on the same debt that helped create the 2008 financial crisis. The money from the Federal Reserve only made too-big-to-fail banks that much richer. When the Federal Reserve quietly raises interest rates, everything it does affects numerous asset classes, including housing markets, mortgages, etc., auto loans, credit cards, and student loans. Indeed, when interest rates rise, all other areas of the economy come under pressure. The average citizen with record levels of debt now faces a financial nightmare.
Corporate debt is the most subversive crisis waiting to erupt. With interest rates rising and the amount of corporate debt already on the table, we will most likely see another stock market crash. Today the S&P shows that at least 40% of 13,000 corporations have a debt-to-earnings ratio of 5x. An even higher level than before the 2008 crash. We have to consider that corporations have been exploiting low interest rates to borrow huge sums of cash for the sole purpose of buying their own shares. None of this money went to increase employee wages. Share buybacks are a legal form of market manipulation in which companies repossess shares from the public, which in turn reduces the number of existing shares circulating in the market, artificially increasing the value of shares overall. .
We have to remember that share buybacks have been the main fuel for the longest bull market in history. But this bull market is so fake that even the media has begun to question its validity. Share buybacks depend entirely on cheap debt. Unfortunately, cheap debt isn’t so cheap anymore with the Fed raising interest rates. Eventually, perhaps sooner than we think, another stock market crash is inevitable.
The national debt has been the subject of many presidential debates, and yet it looms higher than ever. In the wake of a possible global trade war, it begs the question of how long it will be before major holders of US Treasuries, such as China, shed their holdings in retaliation. Trump’s folly in refusing to acknowledge the seriousness of our continuing increase in the national debt ceiling only concludes that our national debt will only increase. The Federal Reserve used to be the biggest buyer of US debt. But given that they have raised interest rates, the Fed will most likely not step in if a trade war turns into a Treasury dump. When that happens, it will be too late for our dollar to no longer be the world’s reserve currency. And when that happens, all hell will break loose.
We had better recognize that the three debt contingencies, each deeper each year, are catalysts for an economic catastrophe that will occur if not addressed sooner rather than later. The longer we remain in a perpetual state of denial by elected officials and fail to realize how close we are to economic Armageddon, the sooner all Americans will pay a heavy price. A price we can no longer pay. There is a way to deny the possibility of financial ruin, but first we need our elected officials to recognize how close we are to falling into financial abyss. So we have to implement the reforms that will negate the possibility of financial calamity by introducing the Ten Articles of Confederation of the National Economic Reform.