November 14, 2013
Bangkok, Thailand
"It's a big club....
and you ain't in it."
-- George Carlin
It must be a byproduct of
the government-controlled education system; people still think they live in
a free country with a representative democracy. It's anything but.
Voting, elections, etc. are
all just illusions to make people think that they have some influence in
society.
A tiny elite orchestrates
the whole system. And one of the most influential conductors is the Federal
Reserve, a body soon to be chaired by Janet Yellen. Her confirmation
process begins today.
Since most people have no
idea how central banking really works, her confirmation hearing today is
just a footnote.
Even people who are
otherwise financially sophisticated simply trust that the men behind the
curtain know what they're doing.
This is quite strange when
you consider that central bankers have nearly total control over the
economy.
In their sole discretion,
they are able to set interest rates, conjure money out of thin air, finance
trillion-dollar government deficits, bail out commercial banks, etc.
And through these tools,
they have the power to manipulate the prices of just about anything, from
the Google stock to real estate in Thailand to turnips in Sri Lanka.
For the last several years, the
US central bank has set the example for the rest of the world in
aggressively using their policy tools.
Most significantly, they
have unabashedly printed money in unprecedented quantities. And this has
not been without consequence.
For some, the effects have
been beneficial.
Rapid expansion of the money
supply has pushed asset prices up all over the world. Stocks. Bonds. Many
commodities. US Farmland. Artwork. Fine wines. Just about every asset class
imaginable is near its all-time high.
People who are already
wealthy have the available funds to invest in these markets. So their
wealth has grown even more-- exponentially.
The middle class, on the
other hand, is experiencing an entirely different effect of money
printing-- retail price inflation.
And anyone who has been to a
gas station, airport, university, doctor's office, grocery store, etc. over
the last few years understands this phenomenon very well.
A typical middle class
family has little excess cash to invest after paying for rapidly increasing
living expenses. Food. Fuel. Mortgage. Insurance. Etc.
And whatever wages or
savings they have are being eaten away by inflation. So while the wealthy
are getting wealthier exponentially, the middle class is actually getting
poorer.
This explains why the wealth
gap in the Land of the Free is the largest since 1929 at the start of the
Great Depression.
Central bankers are
responsible for much of this. In conjuring money out of thin air, they are
benefitting one segment of society at the expense of another.
And with Janet Yellen soon
chairing the Fed, very little will change.
Yellen has made it clear
that she will continue to print unlimited quantities of money despite
overwhelming data that such actions are ineffective and destructive for the
the majority of the population.
Kyle Reese from the first
Terminator movie sums up the consequences for the middle class rather
succinctly:
http://www.youtube.com/watch?v=zu0rP2VWLWw
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1 comment:
yes i too feel it's a fact of life on this planet called earth, in that it is a animal kingdom, and man is a human animal with it's chain of command of force and lies. where one is to physically beat us for all to see (chain gang crews is the worst), and to insure that we all not do what we did to get the beaten. the other is the llies of church and state, to control our minds with shame, fear porn, and docile behaivor that only works on the meek and kind, not the elite who make the rules, and break them as they see fit, for they are above the law, this has always been to thousand of years on this hell hole planet of animal instincts survival tactics.
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