stormAnd it’s not what you expect…

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by Rory, The Daily Coin

I have known for some time that our economy is in a lot of trouble. Today, that has been confirmed by someone that runs one of the largest, most well known funds anywhere in the world.

We have spent a lot of time on gold and silver the past several months and truly focusing in on our money. Our labor is traded for goods and services that help our lives function in a way that makes us comfortable and, hopefully, happy. We trade our time/labor to someone else who pays us in the currency issued for that jurisdiction. This is how economies develop and, with any luck, a prosperous economy and growing community emerge.

For well over four thousand years silver and gold served this purpose and in some areas of the world this still holds true. Unfortunately, in most of the world we use a central bank issued fiat currency to transact commerce and we trade our time/labor for this fiat currency. In the U.S. we use Federal Reserve Notes (FRN), most people refer to as the “dollar”. If you read the print on the FRN you will quickly learn this is a representation of money and is actually a debt instrument. It clearly states this on each and every denomination of “dollar” printed by the privately owned, Federal Reserve System.

Part of our current situation is as follows. The U.S. retail consumer has amassed over $1 trillion in student loan debt, over $1 trillion in auto loan debt and the federal government is $19 trillion in debt (plus the unfunded liabilities like Social Security and Medicaid which total over $100 trillion) and counting. Brother, can you spare a dime? Our nation is so far in debt it has to look up in order to see the bottom.

Question: How does a person that owes $30,000 in student loans plus another $15,000 in auto loans purchase a home, pay a mortgage/rent or start family when the only job they can find pays them $12-15 an hour? Is that enough income to service the current debt load? The student debt can not be written off as a bankruptcy, the person is stuck with that debt until it is paid off, even if they die, their estate is straddled with that debt – it must be repaid. The auto loan is another story and, my guess is, we will begin seeing auto loan defaults spike within the next 12-18 months as more and more people realize their shiny new toy has lost it’s luster and it’s value.

So, the currency we use is an instrument of debt, our nation is drowning in debt and, according to the TV life couldn’t possibly get any better in the good ole U.S. of A.

Enter Ray Dalio, Bridgewater, which manages over $150 billion in assets around the world, is one of the smartest people in the room – any room – when it comes to financial instruments and how to generate wealth. Recently, Mr. Dalio was explaining how we arrived at our current conjuncture in this unfolding economic collapse.

During this conversation Mr. Dalio explained that Monetary Policy #2, Quantitative Easing, (QE) placed all the financial instruments in the hands of the people that already had financial instruments and thus have left the actual producers out in the cold. QE was designed to provide the people at the top with relief from the financial nightmare that began in 2008.

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Quantitative Easing, buys financial assets from people that have it and it stays in the financial community.

– Ray Dalio, Source

There is, to my knowledge, no clearer, easier to understand explanation of QE than the one Mr. Dalio just offered. The people that have assets are given the means to purchase more assets and that drives up the price of those assets making it impossible for anyone outside this small group of owners to purchase anything of value.

Mr. Dalio goes on to explain the next step in this unfolding nightmare of economic collapse.

We are going to have to move toward, increasingly, the making of purchases that put money directly in the hands of spenders. Because the linkage between having money in the financial assets and having spending is becoming weaker and weaker.

****

Monetary Policy 1 – interest rates have become ineffective. Monetary Policy 2 – Quantitative Easing – purchasing financial assets by the people that own financial assets has become ineffective. Monetary Policy 3 – Central Banks, around the world, printing money and putting money directly in the hands of consumers.

Source

That has to be some of the most terrifying words I have ever typed. It is hard to even fathom how this could work. Which brings me to something I have been thinking about all day.

Our labor, the citizens of the U.S., has been traded to other countries, through bonds sold by the U.S. Treasury dept. Other countries, primarily China, Japan and the OPEC nations, own our labor through the issuance of bonds. How does this work if no one is working but somehow still is receiving an “income”? How do the bonds get paid off and what are those bonds worth? How does China, Japan and the other countries, that own our debt get paid back? Will these countries just accept printed monopoly money? If so, why hasn’t the U.S. Treasury already paid off these bonds? What’s the difference if the debt is paid off today, with monopoly money or tomorrow with monopoly money?

The above is described in the first ten minutes of the video below. I would strongly suggest spending ten minutes giving this a listen. If anyone reading this is managing more than $100 billion in assets, you’re probably good to go, but those that are not managing $100 billion in assets, may want to give this person a minute of your time. He may teach us all a little something about what is coming. And, by the way, if you know what’s coming at you, you have a much better chance of preparing properly for the event once it arrives. The cancer is growing by the day.

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  1. “Monetary Policy 3 – Central Banks, around the world, printing money and putting money directly in the hands of consumers.”

    LMAO 

    Where is my PHD in economics Ray.

    I have said this here at Silver Doctors many many times & at other metals forums as well for YEARS.

    Bail out the people & they will SPEND it ( exceptions are there for those of us smart enough to do otherwise) bail out the bankers & nothing trickles down to main street & you just end up pissing off main street who will eventually come looking for wall street with a rope. 

    • The Metals will be Unattainable , paper will be as the words of politicians.

      Rev 9:13-21 A war that kills one third of mankind.  WW3

      The United States will Not be part of the Beast Nations , after the war.

    • @Ranger

       

      Just remember, Ranger… the banks ask 1st and then TAKE.  Stage 1 of that has been fulfilled and now stage 2 remains.  Don’t leave more than a month’s worth of bill paying money within reach of their little rat-claw hands or it WILL be taken.

    • Helicopter money, food stamps, housing subsidies, basic living income, call it what you choose, it will take place. Many people currently employed in service industries will be replaced – does anyone remember what a Travel Agent was, we call them expedia.ca now – and many of the self-important muddled managers and other lard-azzes who occupy chair space will be replaced by better technology, robots and ‘the internet of things’.

      How will all those unemployed and under-employed people provide for basic food, clothing and housing? There are already 100m people who don’t work in the US, forget the BLS nonsense, so what happens in 5 years when self driving vehicles put cabbies out of work. Uber? That’s a fad that will disappear when a driver is not required. Bus drivers, truckers? Any warehouse workers, assembly or production line people out there feeling mega confident about your employment future? Pick an industry or job category, most functions can be done with machines, ie technology, and Presto! No human input required, say goodbye to 90% of those jobs!

      It’s not a question of if, simply when.

  2. Instead of dropping money out of helicopters, they should get into infrastructure spending–roads, bridges.sewers, water, etc. Lord knows, our countries need it–and every construction job usually spins off about 5 other jobs–one of the highest multipliers there is.

    The dollar may become confetti, but the end product lasts for decades.

  3. Reckon what would have happened if the Trillions (yes Trillions) in QE was given out proportionately to every American Tax Payer, You know, just the ones of us who pay taxes and no freebies to illegals or other grunts? Vegas would not have enough hotels, most of the  people would be out of debt, the spenders would go broke and the DOW would be at 50,000!

    Big difference Hillary!

  4. Re: “Monetary Policy 3 – Central Banks, around the world, printing money and putting money directly in the hands of consumers. That has to be some of the most terrifying words I have ever typed. It is hard to even fathom how this could work.”

     

    Actually, not scaring or terrifying at all, and easy to implement. Best of all, it is totally justified, since millions of Taxpayers who worked for a lifetime, earning and saving for retirement, were robbed in 2008 by criminals on Wall Street. This money was not lost or destroyed. It was stolen. By deception, lies of omission, and outright lies, illegal collusion, insider trading pump & dumps, and 101 other means not yet revealed, the life savings of millions of Taxpayers was stolen. These are not baseless accusations. The testimony of Alayne Fleischmann is sufficient to convict JP Morgan of criminal behavior that was commonly practiced by its peers. Overall, trillions of Dollars were stolen from millions of Taxpayers.

    The injured parties demand full restitution, since this savings is their sole means of survival. Given the unreasonable disparity in wealth between those who control and directed the criminal actions, versus the victims; restitution is justified. The amount owed is due to the unbelievable extent of the fraud, see here: http://www.SiriusDisclosure.com
    Due to the fraud described above, each Taxpayer is owed at least one million Dollars. Social Security is an appropriate mechanism by which to return the stolen wealth.

    • what troubles me most is that we as lifelong tax payers,( the real owners of our country) should receive some rebate. as in the fed.gov owns 70% off all land and resources in our country. so when they sell said resources.wouldn’t one think that hey, they are selling my lumber,my gas, my WATER ESPECIALLY, then where is our cut. would we let these goons come into our homes,and stage a garage sale, then keep all the money? there is our stolen wealth!!!!!!!!!!

  5. C’mon, THAT is an old hat! What are 45 million people relying on food stamps? This is printed money given to the people. We ARE already at that point and have been for quite a while. Will they ramp this insanity further up? No doubt about it, but it will fail as ultimately the money hyper-inflates into worthlessness (vis-a-vis the purchasing power of PMs).

  6. The government is giving $1,000,000,000,000 a year to the mooch class. That form of QE has been going out of one set of pockets into  other peoples pockets for decades.   The recipients do nothing to earn it.  It’s handed over without ANY qualification.  That trillion dollars year over year is very close to the increase in the national debt.  The national debt increases by a trillion and is bought by many, all of who are buying the QE’d efforts of 100% indigent people, 100% financed by the long term efforts of those who must, some day, pay this off.    US debt auctions are still over subscribed by 2.5 to 3 to 1.

    Buying our labor?  Not exactly. Buying the lassitude; the lack of labor and effort of the Mooch Class is more like it.

    Students receive 100% of their tuition provided by loans from the government, resulting in an educational welfare system that produces ill-educated young people facing a mandated $15 wage labor market.  No employers will to pay that to over educated young people with negligible work skills, degrees that have little bearing on the low end bar tender/restaurant worker $15 hour minimum wage mandated by the socialists who think $15 an hour is the be all end all of poverty and wage inequality.

    Enter the  brainy mugs amongst us  who saw this coming; crunching the numbers down to the last penny.  It took about a New York second to calculate when R2D2  starts at Wendy’s with their 6,000 roboservers coming on line, taking Ashley and Tyler, freshly minted BA degreed candidates for Mommy’s Motel 6 3 hots and a cot with a side of EBT and pushing them into the permanently unemployed.  Mom gets to pay the student loan, having co-signed for that.  Tyler’s new F150 has a subprime rate of 14% and due for repo next week.   He’d gladly pay you Tuesday for a hamburger flipping job today.  At least Ashley’s been able to line up 3 shug daddies to pay her loans, 3 tricks a week and no strings attached.  Old farts are gittin’ some at $1,000 a month, no strings attached.   Ashley’s figured out how to turn her only asset into a paying gig job as a furniture girl

  7. He is not really promoting the investment in silver and gold, only to keep a portfolio of 5 % Gold and 5%  Gold Stocks, leaves me with a 90% investment in what?   Paper and bonds have no value and stocks are coming down. My portfolio  in physical silver and gold miners is 90 %.   He invested in 2015 for 10 million FRN in Silver Wheaton Corp. He did pretty good when you look at the stock.

    But if helicopter money  is a fact, how will they then maintain a healthy inflation?

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