Saturday, October 20, 2012
How can there be both inflation and defaltion?
How can there be both inflation and deflation?
The answer is simpler than you might think:
Control of Money Printing in the hands of a Central Banking Cartel is used to amass a tremendous proportion of global wealth for the very few Banks and financial institutions closest to the banks in the cartel.
The Fed, which is owned by the banks in the cartel, prints money and gives it to the banks. The banks buy the politicians and fashion laws that allow the banks to lend 20 dollars for every dollar the Fed gives them. Then the banks create new legislation allowing them to gamble 50 to 100 dollars in the risk markets (through derivatives) for every dollar the Fed gives them.
This creates tremendous financial bubbles as every market eventually becomes a very high risk market.
The deflation results from the bursting of financial bubbles. Real Estate is always the biggest casualty. But anything and everything is pumped up with risk capital: Stocks, Bonds, commodities and all sorts of derivatives.
The Inflation results originally from the very printing of money. But it is exacerbated a thousandfold by the massive money creation that is required to clean up the burst bubbles - (With public funds.)
For a while the all-powerful central banks can orchestrate a seeming equilibrium between the inflation and deflation by pumping more and more printed money into the insatiable Banks.
The asset deflation masks the monetary inflation thus creating the illusion of stability while both deflationary and inflationary forces expand in their respective realms.
As the bankers (and those financiers closest to them) get richer and richer, the vast middle class gets poorer and poorer.
The result is eventual chaos - or totalitarian style fascism,
What's the solution?
Break up the banks. Allow only small banks to service communities with banking activities. And let the Investment Banks gamble all they want and go broke when they fail.
Everyone from Paul Volker to David Stockman advocates this solution.
It's so damned obvious.
It will never happen.
Because the banks own congress.
Prepare for the chaos.