Posted tagged ‘Central bank’

Visual Explanation Of The Deficit And The Debt

November 1, 2013

The visual of this chart is outstanding, it jumped off the page when I saw it. The chart shows our Governments yearly revenue, yearly deficit, and total debt. This is from an article titled Great News! The Fiscal Crisis Is Over! by Jon Gabriel, at ricochet.com. I got there from this article at theburningplatform.com.

https://i2.wp.com/cdn1.ricochet.com/var/ezwebin_site/storage/images/media/images/debtchart/4700766-1-eng-US/debtchart_lightbox.png

Here is a quote from Mr. Gaberiel, “…imagine the green is your salary, the yellow is the amount you’re spending over your salary, and the red is your MasterCard statement.”

What is sobering about this chart is how a seemingly small yearly deficit compounds into a massive amount of debt over time. What is it going to look like in three more years if we continue our $1 trillion yearly deficit?

THE REAL DEBT TOTAL

Unfortunately the $17 trillion is really not the actual debt. If you factor in the unfunded liabilities for Social Security, Medicare, and Medicaid, which have been estimated to be between $55 to $222 trillion, look at chart here, the problem gets exponentially worse. What do you think Obamacare will add to this unsustainable mountain, or valley, of debt?

THE FED RIDES TO THE RESCUE?

Fortunately we have the Fed which can electronically print counterfeit money to pay our way out of this mess. Oh yeah, I forgot, the only way a Government can accumulate this amount of debt is because its Central Bank funds the expansion in the first place by buying Government bonds. Without the ability to electronically print counterfeit money, Governments can only grow to the size of what they can steal or mooch through taxing and borrowing. At a certain point, individuals won’t produce above a certain level if they can’t enjoy the fruits of their labor, and they won’t purchase bonds from a seller whose level of debt makes the transaction seem to risky. The Fed can’t print its way out of the economic reality of scarcity. Their denial of this reality is why they printed us into this mess in the first place.

Related ArticleLet The Counterfeiting Continue! The Fed Is Stuck In Their Feedback Loop, at austrianaddict.com.

Related ArticleThe Fed As Giant Counterfeiter, by Robert P. Murphy, at mises.org.

Charles Hugh Smith, Hits It Out Of The Park With These Articles.

May 6, 2013
Thinker

Thinker (Photo credit: dSeneste.dk)

Lets do some heavy lifting to start the week. Two weeks ago, Charles Hugh Smith, at oftwominds.com, had three outstanding articles that built on top of each other. For him they were relatively short, but as usual were filled with great insights. He talks about what politicians, bureaucrats, central bankers, and intellectuals not only think; but also talks about the incentives and constraints under which they are making decisions: Why their policies of counterfeiting money for funding stimulus programs, bailouts or for increasing their sacred GDP numbers, will continue until economic reality forces a change: Why China and the US are in similar situations, even though (more…)

Government Intervention And It’s Consequences.

December 5, 2012

I found this video on EconomicPolicyJournal.com, it is by Nick Gogerty at gogerty.com. You will visually see the inflating of the housing bubble caused by Federal Reserve money printing. You will also see the bursting of the housing bubble, a bubble which would have never been created in the first place, if not for the Fed’s money pumping.

A toxic brew of, 1)  Government mandating lower lending standards, 2) the Federal Reserve printing the funding for these loans, and 3) the artificial lowering of interest rates because of this counterfeiting, created mortgages that could not possibly be paid back. Banks got bailed out by the Federal Reserve’s purchase of mortgage-backed securities through (more…)