-- Posted Thursday, 23 April 2009 | | Source: GoldSeek.com
By R. D. Bradshaw
In the past year, the Goldsmiths have broached the possibilities of deflation in at least four presentations (parts 27, 47, 54 and 56) in the context that the present economic deflation pressures are coming precisely from the plutocratic ruling Rothschild Cabal. But ultimately, the Goldsmiths have allowed that the eventual threat will devolve to a hyperinflationary blow off.
In support of a total deflationary collapse, there have been several scholarly and perceptive articles by different writers. In the Goldsmiths (Parts XXVII and XXXXVII), I have discussed the excellent work of John Olaques on how the banks receiving the bail out funds are simply not loaning those funds out to the public to cause inflation. As I noted, these banks are socking the bail out receipts into US treasuries to hold in their vaults. This process is adding to the deflationary threat.
Then there is the very pessimistic work of the Market Ticker in the Goldsmiths, Parts LIV and LVI. This source builds a powerful argument for a total deflationary collapse within a year. If this thing strikes in 2009, as predicted by the Market Ticker, it will be devastating for America and much of the rest of the world.
Finally, I must mention the very scholarly work of Professor Antal E. Fekete of the San Francisco School of Economics. He has written some great articles on the subject of inflation versus deflation as published by goldseek.com.
In his very informative and provocative study on the Quantity Theory of Money, Professor Fekete addresses the work of Chicago economist Melchior Palyi and the marginal productivity of debt (the ratio of additional GDP to additional debt—thus the amount of new GDP contributed by the creation of new debt). He then notes that presently the volume of outstanding debt is rising faster than GDP (actually since 2006, the marginal productivity of debt dropped below zero for the first time since 1945). His conclusion is that the more debt adds nothing to GDP, but causes economic contraction. Fekete then posits that the present situation is a sign of an imminent economic catastrophe.
I mention the above three studies supporting a deflationary collapse because if any of them or all three of them are correct then a deflationary collapse will soon come and regardless of how much money Washington spends and irrespective of how much the US monetary base is increased by the Fed.
The Contrary View
Aside from the above beliefs on a hyper deflationary blow off, there are, of course, a number of procrastinators who opt for a hyperinflationary blow off. Many of these persons believe that such a collapse will come soon—like maybe this year.
For my part, I too have believed the hyperinflationary threat but I have chosen to follow the thinking of John Olaques, in the Goldsmiths 27 and 47; in that the hyperinflationary blow off is being delaying thru the present work of the money changers to deflate things and in the practice of the big banks to sock the expanding US money supply into bonds and notes for holding without allowing these expansions to chase goods and services in the US economy (thus, it is clear why this increase in debt is not causing any increase in GDP).
Hence, my take has been that though there is presently a deflationary push on by the money changers, it is not succeeding in doing much beyond slowing down the rate of inflation. In this sense, the pending hyperinflationary blow off is being delayed, stalled or deferred till later. In other words, hyperinflation is on the way; but the efforts of the money changers are such at present to delay the eventual reality of hyperinflation. Thus, it’s coming but the timing is later.
For purposes of this Goldsmiths study, I must stick with my prevailing position on this question which is that ultimately hyperinflation will be the catalyst to destroy the economy of the US and much of the rest of the world.
But I May Need to Qualify My Position Slightly
I see no reason to totally change my basic position on this question presently. But the very excellent works of the Market Ticker and Professor Fekete, in the context of my own remarks at the Goldsmiths, parts XXVII and XXXXVII, prompt me to now read a little more caution into the question of when on the coming hyperinflationary blow out.
Professor Fekete’s words are very compelling to open the possibility that indeed we could soon face a hyper deflationary fall brought on because of the expansion of debt which has reached the saturation point where more debt does not produce more GDP. Of course, based on the work of John Olaques and my own comments in the Goldsmiths, Parts 27 and 47, it is a given that most of this increasing new debt cannot possibly increase GDP because it is being socked away in the bank vaults of the money changers.
Clearly, as long as the present US monetary profile prevails, there is a contraction under way. This contraction could conceivably reach the blow out stage as envisioned by the Market Ticker and Professor Fekete. In other words, if things don’t change fairly soon, we could conceivably have a hyper deflationary fall beyond anything imaginable.
In the Goldsmiths, part 47, I outlined the basis problem. The big banks are getting this increase in the money supply and socking it away in their acquisitions and holdings of US bonds, notes and paper. They are simply not spending it to cause inflation. Simultaneously, unemployed and needing people are using credit cards to live on. This means that Americans are incurring more debts which precipitate high usury interest rates of 10 to 20% per annum.
When one adds the credit card debt load to the already existing payments demanded from most of us for mortgages, car payments, etc, it means that we have a huge debt service load. This process is demanding that most of us use much of our income to continuously service this debt load. In this system, the big banks are the total winners as almost all of the people become heavily indebted to the bankers.
The Bottom Line
My basic thesis remains intact. There is no way to avoid the coming eventuality of a hyperinflationary collapse. In the mean time, pending the arrival of this eventuality, we could have a temporary deflationary fall of a major magnitude (although I have consistently argued that while the money changers are causing a deflationary fall they want it to be limited or contained and not get out of hand to rile the people up in anarchy and rebellion).
I think that if we do face a significant deflationary fall, as is possible, then the politicians will go wild and pass out money on the streets to any and every body. In other words, the process of bailing out and paying money essentially to the big banks will fall by the wayside as the give aways shift to the man on the street (right now, the average American has received very little of the bail out funds as most of this give away money has been going to the big banks; but this focus could change in a deflationary collapse).
With too serious of a deflation, even the bankers will get scared of the possibilities of revolution and anarchy in the streets which could get people so mad that they will start hanging money changers, along with politicians. This is a very dangerous situation that the Rothschild Cabal has set up.
Yet, there is something else on the horizon which clarifies why the Cabal has chosen this path of deflation knowing full well that whether deflation or inflation, they will ultimately rile up the people so much so that internal social problems could force them to get into their private jets and speed off to other countries around the world where they hold passports and have secret bank accounts in place.
Thus, the present bank bail out scheme is designed for them to steal and plunder all of the remaining wealth in the United States. They are keeping the dollar high in value so that when the time comes, and they must leave the US, they can transfer/convert their dollar assets to things of more permanent value in more stable foreign countries—like hard currencies, gold, silver, real estate (in certain foreign countries or in valuable US farm land), other commodities, etc.
I am sorry to say that the likes of Bernanke, Geithner, the Rothschilds, etc are not stupid people. Actually, it would be good for the US if they were just dumb. No, I think they know exactly what they are doing. This whole process has been carefully thought out. It is not a random change operation; though some persons still believe this fairy tale nonsense. The fat cats are going to plunder and steal the last remaining vestiges of wealth in America. And when the time comes, they will, if necessary. save their own hides by fleeing to a safe foreign country of their own choosing. Those of us remaining in the US will be faced with a collapse—hyper deflationary/hyperinflationary.
Hence, in conclusion, I must allow that maybe the plutocrat imposed deflationary scenario could plunge downward in such a fashion that the thinking of the deflationists will prevail for a season. But in that case, our politicians will go wild and flood dollars to people on the street so fast and furious that the ultimately predicted hyperinflation will come into being. As long as the bail out funds have been going to the big banks for them to sock the give aways in US notes/bonds in their bank vaults, it has not caused hyperinflation. But if and when the give aways start going to the collective American people, hyperinflation will soon be on us.
In terms of whatever laws are in effect to restrict the Fed in its money creating capacity, they all mean little or nothing for two key reasons. First the Fed is never audited, checked or verified. Its operations are conducted in secrecy. Therefore, the Fed can do as it chooses. And last, if necessary, the President/Congress can amend or change whatever law/rule deemed necessary. So if the Fed claims that it can’t print money to flood the US streets, the law can be changed.
Even presently, in WWII and on other occasions, the Fed reportedly monetized debt by simply exchanging Federal Reserve Notes with the Treasury for US notes and bonds. This process has allowed the Fed to greatly increase the money supply without a hitch in comparison with how thing are if the Fed has to use its open market operations to buy notes and bonds on the open market.
Too, since the Fed receives interest income on all of its US notes and bonds (which is in the range of hundreds of billions of dollars annually), it is constantly receiving huge payments from the Treasury which allow it to be able to buy treasuries at random thru its open market operations and undertake other measures to manipulate and control the markets.
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Back issues of the Goldsmiths, by the editor of the Analysis of News, can be accessed from a Google or Yahoo search engine by typing in “R. D. Bradshaw” Goldsmiths. Several hundred web sites can be found with the back issues and with translations to Spanish, Italian, German, Chinese and other foreign languages. Goldseek.com has most of the back issues of the Goldsmiths. Finally, the “Archives-Goldsmiths” of this website (www.analysis-news.com ) has all of the Goldsmith articles issued to date.
Besides the revelations contained in the Goldsmiths’ articles, the work of the plutocratic financial market manipulators to conspiratorially manipulate and control the financial markets (to make more profits and install a world government under their management) is also addressed at length in the periodic analysis of the news and in other articles produced at www.analysis-news.com. This website has an article of interest to any person interested in understanding the market Manipulators. It is the Hidden Secret of the Manipulators, why they succeed and how to follow their manipulations.
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-- Posted Thursday, 23 April 2009 | Digg This Article
| Source: GoldSeek.com
