The Economic Collapse

How does one go about devastating an economy without hurting the super rich? Credit, that's how. To understand how this all came about, we have to take a journey back in time. We must look at the previous Great Depression and events leading up to it. First and foremost, for an economic crisis to spread far and wide, the individual entities of that economy must be tied together.

The formation of the central bank that we call the Federal Reserve was the first step in tying the economy together. This move was widely debated and defeated in a number of previous attempts to get it in to law. In fact, several central banks were formed and dissolved in the history of the US. In the end, the right people managed to get enough positions in Congress the Fed was formed. With this system in place, the American people were now in debt to this company for every dollar printed. Smaller banks received loans from the Central Bank. A few years after its formation, the bottom fell out. Rumors circulated about an inevitable collapse and people lost faith in the markets. As the collapse began, the panicked public flocked to the banks to remove their cash. During this process, the Central Bank calls in all debts. The result was catastrophic. The banks had invested the depositor's money along with loans from the Fed in the markets. Now the markets have no value, the banks are bankrupt and any remaining cash is owed to the Federal Reserve. As part of the plan to recover, the Central Bank bought up many of the struggling banks, the FDIC was formed and we were removed from the gold standard. This last move essentially meant there was nothing backing the US dollar except the credit or word of the US government.

Now let's fast forward to the eighties. Credit becomes the word of the day and decade. Credit card companies are springing up everywhere and the popular concept of credit ratings take hold. Eventually, there is an economic boom and everyone is racing to keep up with the Jones. Silicon Valley has taken off and America has something it hasn't had in a long time - a new product. Meanwhile, the US continues to slide into an ever deeper trading deficit. More and more we ship jobs off overseas, sell out to foreign companies and accept that everything we buy is "Made In Taiwan". The US has become the best customer for economies world wide. Soon, massive US companies that provide services such as insurance, investing and other essentially "empty" products, begin to appear all over Wall Street. One by one, we hear of merger after merger and a new word becomes popular - conglomerates.

Through this process, executives and investors make money hand over fist. The popular words become diversified assets, portfolios, shares, etc. Eventually, these capitalist ideas spread all over the world. The USSR collapses, Europe unites and the European Union and its unified currency are formed. This unification ties together many different economies and the future looks bright. However, lurking beneath all this is a huge problem. There is no actual product.

Some where, some how, some wise guy gets the big idea to actually ask what the liquid value of all these investments is. The big OOPS happens. There is no value to most of it. Clever people have mastered to credit business. Build a company, get billions of dollars based on an assumed value of paper assets from investors, banks and insurance companies. Make your millions or billions while the getting is good and then retire before the wise guy shows up and asks that question. The problem: Credit is not real.

For years, we have asked why the people in Washington couldn't understand that a huge trade deficit was a bad idea. Surely they can see that you can't buy more than you sell - it is simple economics. Well, it depends on how you see it. If we open our minds to a bit of imagination, we can see a reason for all this. If we were to suppose that the Central Bank aka The Federal Reserve intended to crash the economy in the The Great Depression in order to purchase other banks and businesses at super discount prices, then it isn't hard to imagine how this has become global and why everything that has happened COULD fit this plan. To crash America was easy and remains so as there is no gold standard and we still operate on credit instead of value. To crash the world however, a few things have to happen:

1. You have to get the economies more tightly nit together - The European Union
2. You have to get the economies dependent on a common customer - The US trade deficit

Now by exercising the near same events of the depression, you can affect a global economy. The US consumer has lost its buying power and can no longer afford to buy either domestic or foreign products. With the US being the number one consumer of most of the world's products, the effects are felt far and wide. In the end, the richest 1% still controls 60% or more of the money. So, where's the payoff for doing such a thing?

There are several pay offs. First, many businesses and assets are once again very cheap to buy for those who still have the money to do it - the 1%. They will grow these companies as they did others in the past and then get out before the next oops. Next, those that did not unite under the EU soon will. They will be lead to believe that it is the only way out and they will go for it. In the US, the government will borrow tons of interest laden cash from the Fed, the chosen few large companies will consume the smaller and the path will be set for a North American Union. We will watch and we will see that the companies get fewer and larger. Ever bigger conglomerates will emerge. When these super conglomerates crash, and they will, the effects will be even worse than now.

So here is what to look at and look for -

Has the wealth of the richest 1% in this country been affected?
Will their wealth and ownership in today's failing companies increase before this is over?
Has there ever been a significant period of time where we had no national debt and neither went to war or suffered economic recession and in these instances, was borrowing from the Fed the solution?
How many mergers did we allow to take place in the now massively de-funked companies?

Take a look at these facts, do the research and consider this article.