/liberty/ - Liberty

Gold, Property Rights, and Physical Removal

Index Catalog Archive Bottom Refresh
Name
Options
Subject
Message

Max message length: 12000

files

Max file size: 32.00 MB

Total max file size: 50.00 MB

Max files: 5

Supported file types: GIF, JPG, PNG, WebM, OGG, and more

CAPTCHA
E-mail
Password

(used to delete files and posts)

Misc

Remember to follow the Rules

The backup domains are located at 8chan.se and 8chan.cc. TOR access can be found here, or you can access the TOR portal from the clearnet at Redchannit 3.0.

US Election Thread

8chan.moe is a hobby project with no affiliation whatsoever to the administration of any other "8chan" site, past or present.

(34.40 KB 640x400 negativeInterestRates.png)

Negative Interest Rates Anonymous 06/24/2020 (Wed) 11:57:07 Id: b74ca9 No. 3178
ITT we discuss how negative interest rates are going to destroy our collective economic futures.
When will the economy hit the shitter? I know the Fed and the politicians like to kick the can down the curb but it has me worried a bit since this debt will eventually hit the people. I just wonder when.
(42.15 KB 652x438 ClipboardImage.png)

>>3211 It's already hitting the shitter. Stocks are only going up because the Fed is devaluing the dollar to prop up prices. Banks are only making loans to distressed companies because the Fed is backstopping them, but it can only last so long because they do not make money from lending when interest rates are zero and they take on massive risks with corporate balance sheets that are negative. A bankruptcy crisis will hit that the Fed cannot stop because its only tool to boost economic growth is loosening conditions for capital investment, but that will not help in a collapse of investment opportunities due to a cascading failure stemming from lost profit leading to lost jobs, lost income, and lost consumer spending leading to further lost profit. If the Fed ran a normal monetary policy, businesses would have a safety cushion of profits from lending to the US government in US Treasury securities. That cushion is now dead, US government debt yields are negative, the Fed can cut no further and they have no more money coming in. Only those with the biggest cash hoards will survive the fall.
>>3178 How accurate is the image I made in the OP?
>>3233 The investment banks not knowing where to put their money is part of the problem, they buy government debt. The government also doesn't know where to put the money, so they do bailouts. The bailed out companies don't know where to put the money when they have no signaling from consumer demand, so they buy government debt and further cut spending instead of hiring. The central bank sees all of the government debt purchases and surmises it has the go ahead to pull increasingly unnatural policy such as cutting the interest rate to oblivion and Quantitative Easing to line the accounts of banks that already have a zero percent reserve requirement to encourage lending, none of which address the earlier problems. The lesson of it all is that it ignores that the ultimate driver of value is individual work, exchange, and profit, and the entire system is built on taking as great a share of the gain which they create as possible through usury. When you keep nothing of what you make because you have to pay it all away for debt and taxes, you are not spending, you are not saving, you are not a means to your own end but merely a tool. For those that do manage to profit through their work, they cannot escape either. For a usurer will take notice of their profit and either encourage them into debt, or they will use the power of the bank to run them out of competition, or the individual themselves joins the financial cartel because the alternative would be to go out on business. All backed by a government a pawn of the conspiracy and keeps it going with the illusion of participation in a system where only the elite have any say. The world is grossly unjust. The greatest struggle of the 21st century is to own yourself; to uphold your right to individual self-determination, or to surrender it to a leviathan running full-steam ahead into a mountain of human suffering. Remember as JP Morgan revealed: gold is money, everything else is credit. Gold, guns, and grain are the eternal guarantors of freedom.
>>3234 Is there a reading list or books you'd recommend to understand what's happening?
>>3246 For the economic side, Princes of the Yen was a good documentary on how the Bank of Japan decided to fuck over the Japanese economy for ideological reasons. For further information on why the Japanese economy is incapable of growth see Richard Koo's theory of debt deflation. The Japanese economy loaded up on too much private debt in the 1980s that could never be paid off, so for the past 40 years the government has had the choice of either a quick hard crash or taking on a massive public debt to bailout businesses so they don't face an unemployment crisis. This is what the US is going through now, and China will be facing soon. The biggest key to understand the debt bubble though, is the 1997 Asian financial crisis. Long story ahead: Who is underwriting all this bad American debt? Answer is East Asia. After the 1997 Asian financial crisis, the economies of Southeast Asia along with China decided that they would never indebt themselves to foreigners again, and become net lenders to the United States and other developed economies. By selling their domestic currency to purchase American debt issued by American banks, they drove up the value of American financial assets, which had significant negative effects. Number one, it fuelled bubbles. The increase in asset prices led to speculative buying that caused the dot-com, housing, and the current debt bubble. Number two, it propped up the value of the USD. The Dollar is overvalued considering the actual performance of the American economy. However, because foreign investors keep underwriting American debt to store their wealth in American financial assets, the Dollar never drops to a realistic exchange rate. This is bad for American business: it keeps prices of American goods and services too high to be globally competitive, leading to increased unemployment. Lastly it enabled the Fed to start on the course of action it is engaging in today. As foreigners overinvest in American financial assets regardless of the rate of return, the Fed was able to cut interest rates again and again and again to zero because for the international market it didn't matter - their primary concern was safety. If the world was on a gold standard, this wouldn't be a problem as the world would store its wealth in gold reserves which are not partial to any country. Cutting interest rates allows the banks to make more and more loans, and indebt more and more of the population. For those at the bottom, they can never escape, but for those at the top, it's perfect. However, the more and more debt you load on, the worse and worse economic performance gets: the money to pay for the debt has to come from somewhere, it doesn't appear out of thin air. That money has been coming out of the wages and savings of the average American household. If your business has lost market share because of competitive devaluation, you have to go into debt. If you load up on debt, you have to cut spending. If you cut spending, you have to cut pay and fire workers. Lastly, households that have stagnant incomes or lost jobs can only provide for themselves by borrowing or draining their savings. When the central bank is creating inflation to force households to spend, your savings only lose value, so most practical course of action an individual can take is taking on debt. This keeps the economy juiced for a few years, but at some point, the party stops. Everything is too overpriced to continue functioning, markets are paralyzed as investors fear their savings have become worthless, money stops flowing to lenders, banks face bankruptcy. This was what happened in 2008. The US government then stepped in, and the Federal Reserve, and decided it was going to borrow on the credit of the American taxpayer to keep the system running. Money that the citizens of the United States had forfeited to their government with the understanding that it would be used to keep them safe and prosperous, was used to save international banking. This kept the banks afloat, and it saved the investments of foreign lenders. For the average American though, it saved nothing. They lost their jobs, their homes, and their health. They would struggle to rebuild their incomes for the next decade while major banks would accelerate the growth of China. In 2015 though, the cracks started showing in Asia. The Shanghai stock exchange crashed. This led to a flight of capital back to the American domestic economy. Banks started lending left and right to companies that had never made a profit. The Fed did nothing with interest rates as asset valuations began to soar, because employment was still not growing. Employment had no reason to grow though, because these companies were never profitable. They were only making money because some sucker was willing to fund them. Real employment rates only began picking up in 2016, once Americans finally had enough in the bank to be able to participate comfortably in consumer spending. This only led to the debt situation becoming worse though, because investors entered into a euphoric mood and poured money left and right into unicorn assets with no intrinsic value. This began breaking apart in late 2019. The United States was near full employment, and incomes could not grow because American companies were still either uncompetitive or outright fraudulent. The Fed had to cut interest rates and reintroduce QE. And then the pandemic hit. The market was on the verge of another liquidity crisis. The Fed's priority: to maintain price stability. The money to keep prices from falling had to come from somewhere. So, it began to enable direct asset purchases. Lending out money that never existed to Blackrock to purchase stocks and bonds to keep prices from falling. Great for shareholders, but an utter disaster for the economy. Prices are too high for individuals to participate. The more the Fed keeps this up, the worse real growth will be, and this will cause companies to go bankrupt across the board. The only way you can can pay off a debt is if someone else is spending. If you cannot pay, you default. People are not spending, because they have lost jobs, lost income, and prices have not fallen to reflect lost demand. The smart shareholders will start selling off USD for gold and other stores of value because they know the longer they hold on, the less it will be worth. The Dollar is backed by the value of financial assets, and when those assets are worthless because the companies they belong to have gone bankrupt, the Dollar will be worthless in international exchange. The market will deflate while prices inflate as goods can no longer be sourced from abroad. This could all have been prevented by a stable exchange standard such as gold, which have would prevented the creation of money by fiat to settle debts that never should have been issued, since ledgers would keep track of the real quantity of money in circulation to ensure that all balance sheets globally are settled. The basis of this argument can be seen in the book "Trade Wars are Class War" by Michael Pettis and Matthew Klein released in May 2020, however their conclusion is flawed because they hope like many economists do that government intervention can resolve the issue rather than a return to an independent issuance of money. In the past when democratic governments did represent the craftsman, the farmer, and the shopkeep, they did indeed have the motivation to keep these forces at bay. In the modern day however, when governments have been captured by bankers, corporate monopolists, and social ideologues, all of whom benefit from the current disorder, in my opinion they no longer have this capacity. Now, independence in financial affairs must be established by decentralized consensus, rather than conferred from above. The founding fathers may have curtailed the infinity of government, but it is up to our hands to curtail the infinity of the bank.
>>3265 There's another post that I'd like to make some time about how the price of this economic distortion has led to social disorder and also on how the Fed's mandate is contradictory in the current environment and is bound for failure, but that is for another time. I also think the information needs to be compiled into a singular argument because the failures are both global and domestic.
>>3266 Lastly in case it skips my mind in the future, the body of fiat that banks, hedge funds, and corporations have come into possession of is so great that they can no longer make investments of value, because they cannot deploy their vast stocks of capital into a startup without causing it to become overpriced. This is has lead to scenarios such as Warren Buffet sitting on $137 billion in cash and equivalent instruments, and Apple on $207 billion. It isn't because they're stupid, it's because the monetary system is broken.
When the elites shut down the Internet and wall off the cities, you will know that the globalists have started liquidating the 99%. Just look what is happening in Myanmar, France, Greece, South Africa, Cuba, Hong Kong, Canada, Germany, Australia, and the Netherlands to see your future.


Forms
Delete
Report
Quick Reply