Like they’ve fixed the educational and medical systems, and turned everything else they’ve touched into crap. From Bill Bonner atrogueeconomics.com:
BALTIMORE, MARYLAND – Things go wrong.
The Wall Street Journalpublished this alert last night:
Democratic leaders are trying to shepherd two complicated legislative packages: a roughly $1 trillion bipartisan infrastructure bill and a sprawling healthcare, education and climate package whose proposed $3.5 trillion price tag and contents are still under intense debate within the party.
At the same time, the government’s funding is set to expire at 12:01 a.m. on Friday, Oct. 1, which would partially shut down the government if Congress doesn’t act. Lawmakers also are feuding over who is responsible for raising the debt limit and avoiding a potentially catastrophic default. Absent swift action, Treasury Secretary Janet Yellen notified Congress this month that the Treasury may be unable to keep paying all of the government’s bills on time during October.
Reuters calls it a “moment of truth” for Congress.
Politicians grandstand. They argue and point the finger at each other.
But if the spending is interrupted, it won’t be interrupted for long. The real truth is that Democrats and Republicans agree on the important issue – that the rip-off of the American public must go on.
And today, we look at one of the most nightmarish features of the End of the World As We Have Known It: hunger.
It is hard to imagine widespread hunger in the U.S. The country is so rich, so big, so productive… food is so plentiful… and its people are so fat. What could possibly go so wrong as to cause people to go hungry?
Countries like Italy, Spain, Portugal, or Greece cannot survive stagnation due to elevated levels of unemployment and the small size of the business fabric. Therefore, the ECB seems to ignore the risks of perpetuating the perverse incentives to bloat government spending and debt.
The European Central Bank announced a tapering of the repurchase program on September 9. One would imagine that this is a sensible idea given the recent rise in inflation in the eurozone to the highest level in a decade and the allegedly strong recovery of the economy. However, there is a big problem. The announcement is not really tapering, but simply adjusting to a lower net supply of bonds from sovereign issuers. In fact, considering the pace announced by the central bank, the ECB will continue to purchase 100 percent of all net issuance from sovereigns…
…With all the conspiracy theories that somehow the bankers are the real culprits in creating excess money supply, there has been an evolution in central banks that has finally crossed the line since 2019. The Federal Reserve was, once upon a time, responsible. The Fed was originally designed as an authority to create money, which was an elastic money supply. That made perfect sense when the Fed was designed in 1913.
Yes, the bankers owned the shares BECAUSE the Fed was actually designed to do what JP Morgan did in herding the bankers together to save the day during the Panic of 1907. Morgan convinced the bankers that if they did not chip in money to bail out the troubled banks, panic would unfold, and ALL the banks would be hit as a contagion. They listened and joined his effort to stem the Panic of 1907. The design of the Fed was to recreate what JP Morgan put together. The shareholders were the bankers because it was a bail-out fund for the bankers, and TAXPAYER money should not be used to bail out the bankers.
Democrat President Woodrow Wilson signed the 1913 Act, creating the Federal Reserve as well as the income tax.
Slowly, but surely, the public began to realize: “We have been waiting for a return to the good old days and a fall of prices back to 1914. But prices have been steadily increasing. So it looks as if there will be no return to the good old days. Prices will not fall; in fact, they will probably keep going up.” As this psychology takes hold, the public’s thinking in Phase I changes into that of Phase II: “Prices will keep going up, instead of going down. Therefore, I know in my heart that prices will be higher next year.” The public’s deflationary expectations have been superseded by inflationary ones.
Recently here on Mises Wire, Sammy Cartagena wrote a brilliant article demonstrating thatTwo Percent Inflation Is a Lot Worse Than You Think. In it, he demonstrates that the manageable 2 percent inflation year over year we all have gotten used to is a whole lot less manageable than we tend to think. But in it, he also cited explaining that “over 23 percent of all dollars in existencewere created in 2020 alone.” From that he explains that while future inflation is important, he is focused on past inflation for the sake of his article, which is where these two articles diverge because this will be questioning future inflation. Anyone paying attention has seen that there has obviously been inflation this past year whether throughprice increasesormore subtle ways to sneak inflation into the economy. However, when we look at the massive spending bills and the aforementioned fact that over 23% of dollars have just recently been ushered into existence, it leaves many asking why has there not been proportionally drastic inflation?
The major piece that is holding back even more inflation than we’ve already seen is a public expectation of a return to normal…
And yet, the primary objective ofanygovernment is to increase its size and poweras rapidly as the populace will tolerate it. The only reason that they rarely do this quickly, is that they can’t get away with it. Like boiling a frog, it takes time to lull the populace into submission, bit by bit.
And, in order to make sure that the public do not figure out what’s been done to them, the news reporting becomes Orwellian in its endless repetition of a false narrative.
It is, however, true that, “You can’t fool all of the people all of the time.” Eventually, the Band-Aid peels back to reveal an infection that’s far beyond what had been generally perceived. It then falls away in layers, as increasing numbers of people become aware that they’ve been scammed – that the media is entirely corrupt and that the media’s owners – big business – have, with the enthusiastic compliance of the government, robbed them on a wholesale basis.
Well, that sounds reasonable… even beneficial. But, unfortunately, that’s not really the whole story.
When QE was implemented, the purchasing power was weak and both government and personal debt had become so great that further borrowing would not solve the problem; it would only postpone it and, in the end, exacerbate it. Effectively, QE is not a solution to an economic problem, it’s a bonus of epic proportions, given to banks by governments, at the expense of the taxpayer.
But, of course, we shouldn’t be surprised that governments have passed off a massive redistribution of wealth from the taxpayer to their pals in the banking sector with such clever terms. Governments of today have become extremely adept at creating euphemisms for their misdeeds in order to pull the wool over the eyes of the populace.
At this point, we cannot turn on the daily news without being fed a full meal of carefully- worded mumbo jumbo, designed to further overwhelm whatever small voices of truth may be out there.
Let’s put this in perspective for a moment.
For millennia, political leaders have been in the practice of altering, confusing and even obliterating the truth, when possible. And it’s probably safe to say that, for as long as there have been media, there have been political leaders doing their best to control them.
The world might face a financial disaster comparable with the
2008–2009 crisis because of problems accumulated over the last 18
months, which are a byproduct of measures implemented by governments to
battle the spread of Covid-19.
That’s according to the
Central Bank of Russia, which published a Monetary Policy Guidelines
draft report on Wednesday. According to the institution, the world
economy could enter a crisis scenario due to both the increase of global
debt held by countries and the increasing number of companies with weak
According to the draft, the bank has
developed four separate scenarios for the near future, up to 2024.
According to its so-called ‘baseline’ scenario, a recession is avoided
as countries achieve their vaccine targets and advanced economies shift
toward monetary policy normalization.
However, the other three possible scenarios paint a decidedly
grimmer picture. In the first instance, the pandemic worsens
significantly causing an economic crash worldwide. In the second, the
pandemic improves, but problems accumulated over the pandemic
deteriorate the economic situation considerably causing a rise in
inflation. In the third, monetary policy normalization by advanced
economies is accompanied by unsteady dynamics in financial markets,
causing a lack of confidence in investors. This is the worst of the
three negative scenarios, the bank says.
Russia’s economy is
suffering from stubbornly high inflation, which currently sits at 6.5%,
and has been blamed for eating significantly into living standards in
the country ahead of upcoming parliamentary elections.
Central Bank of Russia Governor Elvira Nabiullina revealed that the
institution would be hiking its rate to match its key interest rate to
the 6.5% annual inflation rate in a bid to encourage saving and
discourage borrowing. The bank wishes to get this figure down to the
publicly announced target of 4%.
Gazprom Neft will switch from US dollars to yuan and rubles to
pay for refueling aircraft flying to or from China, the company’s CEO
Alexander Dyukov told reporters on the sidelines of the Eastern Economic
“We are starting in September, and by the end of the year we can transfer virtually all payments for aviation fuel in China to yuan,” Dyukov said. He added that settlements for refueling Chinese airliners at Russian airports will be converted into rubles.
The agreement has been reached between Gazprom Neft, which operates 34 airports in China, and China’s national jet fuel operator,
after a lengthy period of talks regarding a move away from making payments in US dollars.
This is the first time, however, for the
Russian-Chinese aviation fuel business to transfer payments to national
currencies. According to Dyukov, test settlements in yuan and rubles
showed an additional economic effect.
… Moscow and Beijing have been pushing for a greater role of their respective currencies on the global financial market and have made a number of steps to lower their US dollar holdings in the past several