In the modern world of high finance, every kind of paper “asset” is looked upon by the investment community as solid. Sub-prime home loans backing mortgage securities, student loans, 70 month term auto loans, derivatives based on the life expectancy of prison inmates, paper gold futures traded on the CRIMEX … heck, everything the Guerrilla likes to call “weaponized paper” are all viewed as “good” investments. Central bankers, and those in the financial community who slavishly follow their vapid jawboning, have come to realize for the first time in history that debt is GOOD and more debt piled on existing debt is EVEN BETTER! They are so in love with the idea of debt piled on debt that they even came up with the concept of Zero Interest Rate Policy (ZIRP) to continue financing their never-ending global debt bubble. Yet even that wasn’t good enough, so now the central banker cabal is out trying to convince the world that Negative Interest Rate Policy (NIRP) is an even nobler idea.Come one, come all! Buy it up, suckers! Doesn’t everyone want to hold a debt instrument that they pay bankers to hold? This is a scam of monstrous proportions!
What else would you expect from idiots who decided that human smuggling, illegal drug sales, and prostitution should be counted as part of national GDP? Recall, dear readers, that it was the Economic Silver Back who said central bankers were smoking crack. It sounded like an outrageous claim until one of them was caught in the UK doing just such a thing! Yours Truly also stated in his careful manner that central bankers are whores. I’m sure many of you thought “no way, that can’t be true!” and then BANG police caught a central banker in the Netherlands selling her services at night after she had finished selling out her country’s wealth during the day. Folks, I implore you to listen because the sooner you understand that the people running your nation’s economic and political apparatus are criminally insane, the sooner you can protect yourself from these psychopaths!
An Idiocracy, Not A Republic
To borrow a term from one of The Guerrilla’s favorite films, western nations have, as a whole, transformed themselves from republican democracies into socialistic idiocracies, otherwise known as societies ruled by idiots. Readers of Rogue Money and The Guerrilla know well that the U.S. Federal Reserve is no stranger to idiocy. Even the Fed’s stupendous idiocy, however, has been outdone by its depraved, moronic cousin across the pond. The actions of the European Central Bank (ECB) are a clear and blatant example of just how out of control the lunatics running the western world are. These people couldn’t successfully run a lemonade stand, yet somehow they are running a central bank that guides the fate of millions of lives.
A case in point, with all the turmoil facing the debt-laden, hard-asset poor West, is the fact that its central bankers STILL REFUSE TO BUY GOLD! ECB head case, “Super Mario” Draghi even went so far as to state in response to the Euro crisis that the ECB has “discussed all assets but gold.” What, pray tell, do these nut-job apparatchiks fear about sound money?! Why do they fear honest markets? Surely, they have a clue that quantitative easing, ZIRP, and NIRP have done nothing but destroy economies, vaporize capital formation, and put to an end anything remotely resembling price discovery. Why would any western central bank that is drowning in debt not buy gold? Does that make any sense?
The Cloned Wars
Not a day goes by without the subservient, corporate U.S. media parroting lies of recovery in the hard face of 34.6% unemployment, 48 million people on food stamps, and 51% of 25-year-olds living in their parents’ basement because they can’t find a job. The insanity of the lies is beyond ridiculous. We have truly passed the point of no return. The Guerrilla laughs every time he hears some economic genius from a central bank espousing “target inflation” of 2% on the cable TV news. These criminals know full well that a majority of the public has no clue how inflation operates, except in connection to the items that they buy every day. Ninety-nine per cent have no idea what a PCE deflator less food and energy is or if it has gone up or down in real inflationary terms.
Listening to these psychopaths is like opening your door to a vampire who asks to be invited into the house. Central bank bloodsuckers do the same thing to you on a daily basis! They tell you in soft, beguiling tones how they will maintain your paper based wealth and then proceed to destroy it before your very eyes.
The truth, dear readers, is this. Janet Yellen, “Super Mario” Draghi, and Mark Carney are clones who say and do what they are told to do by the Bank for International Settlements (BIS), a fascist organization that is on record as having helped the Nazis launder loot stolen from across Europe in World War Two. They are told to convince you that inflation is at 2%, or even less. They are told to claim that the Consumer Price Index (CPI) is steady, an outright lie that flies in the face of the dying middle class, failing big box retailers, and a working class devastated by shrinking wages.
The clearest example of their lies is the Keynesian paradise of Japan, where like much of the West the CPI is alleged to be “steady.” Prices, however, are not as steady in Japan as deflationists Jim Rickards and Harry Dent would have you believe. For almost three decades the productive capacity and savings of the Japanese people have been pillaged. At the same time, the labor force has been shrinking as the population of Japan ages. In short, the underlying fundamentals of the Japanese economy have collapsed leaving Japan, like the U.S., to suffer from localized deflation due to systemic hyperinflation. Sound crazy? Not at all! The phenomenon is known as a “stagflation” and Japan has experienced it for more than 20 years due to a massive debt hangover of inflated real estate prices, ludicrous corporate mal-investment, lunatic government spending, and huge private sector losses on the Tokyo stock exchange.
The same process has been underway in the U.S. for some time. Yes, the central bank clones have done their jobs well, using intelligent sounding words to hide the truth and comfort the dying patient that is the American economy. Words and inflated paper assets, however, will not save the dying patient, nor will the financial chemotherapy of quantitative easing and ZIRP/NIRP, which are killing the tumor and the patient alike. It is a true two-for-one deal.
Undeterred, the clones of central banking continue to follow the edicts of dead Emperor Keynes. They continue piling debt on top of debt while claiming that this time the results will be different. The witch doctors of bankster voodoo economics have not stopped the implosion. They have done nothing more than create massive economic distortions that hide the truth about the bankrupt West. The GDP of all the industrialized western countries (Japan included) is nothing more than reshuffled debt. Examine the GDP of the indebted western nations and Japan and you will see that it hasn’t moved in more than 20 years. All of the “growth” that is reported is new debt poured atop old debt to maintain current levels and to keep capital destruction at bay.
This process is akin to bailing water from a boat in which more and more holes are appearing. The bailing will fail eventually and the boat will sink to the bottom. Until then fictitious numbers must be wheeled out to prove that everything is stable and that investor confidence should remain strong. This is, after all, what the game is all about, right? Draw in the suckers to invest in the paper trash that the central bank clones CTRL+P into existence. Buy our debt, they cry! It’s good for you!
The Debt Star Is Live
The awake among us know that the biggest financial debt bomb of all time is now primed to blow. Thanks to eight straight years of frantic central bank “emergency measures” the West has amassed a debt-load 4x higher than what it was in 2008. In the U.S. alone the Fed’s $5+ TRILLION balance sheet is impossible to offload amidst an economy that is contracting. Green sh*t has replaced the “green shoots” and the Loch Ness Monster of deflation is a cover story being used to prove why more “stimulus” is needed. Below all of it lies the bankrupt wreck of Keynesian economics from which the last remaining dregs of wealth are being sucked. What does this say about those who argue the world is facing a deflationary depression, especially those who have come from Ivy League institutions and have never worked or even traded a single day of their lives? Shills and spooks is what the Guerrilla calls them. Readers beware!
Returning to the fruit cakes at the ECB, remember what “Super Mario” promised back in early April and what he has repeated since? He said the Euro would be saved “by any means necessary,” meaning QE and the buying of any bonds that were not hammered down. This frenzy of “asset” purchasing will continue well into 2017 because Eurozone banks are on the verge of complete collapse from the toxic debt they hold. Like the Fed did in the U.S., the ECB needs to “repair” the balance sheets of failing Eurozone banks by buying up bonds.
Banks and the media all over the Eurozone celebrated the ECB's new “vigilance,” effectively propelling Draghi to the rarified status of super idiot! After all, what has the slick Italian banker and Goldman Sachs alum wrought with his QE bazooka? Little of real consequence, the Guerrilla would argue. He has managed to keep a horde of pathetic, mismanaged zombie banks on life support. He has allowed the dimwitted socialist governments in the European Union (except poor Greece) to continue borrowing at a massive rate and to continue pumping bonds into the already flooded market.
The Ponzi continues, my friends. That is what the central bank clones have achieved. The Debt Star has charged its massive Stimulus Beam Weapon and let loose on the West’s asset prices. Everywhere in the bankrupt West asset prices are ballooning despite zero fundamentals supporting such a move. To quote a former clone and head of the Bank of England, “we have blown the biggest bubble in history!” The Stimulus Weapon of the Debt Star is the empty promise of central bankers to keep the western world’s economic Ponzi scheme fueled “no matter what the cost” and to fend off the boogieman of “deflation.” Extend and pretend is the official policy of the West’s “Run to Failure” business model.
And sound money, what of that? The Guerrilla predicts that precious metals and commodity prices will exit the current artificial price cycle soon. The central bankers will need a new excuse for their insanity and I predict this will be “the world is in turmoil” or “the banks are facing failure” or “emerging markets are imploding!” The Debt Star’s Super Stimulus Beam Weapon has allowed central bankers to blow an economic bubble far larger than the one that led to the 2008 collapse. They have created Lehman Bros. clones out of entire nations. All of the major players this time, banks and countries alike, are sitting on ticking time bombs of debt masquerading as central bank life support. Bankers are firm in their decision. They must save the system by any means necessary! For the western economies, however, and for those in the emerging world that have gorged themselves on the crumbs of central bank largesse, there is NO WAY OUT.