Look at what the central banks are going to unleash.
August 28 (King World News) – Gregory Mannarino, writing for the Trends Journal: Let’s start off with this. Today more than any other time in human history, NOTHING is what it appears to be.
Lies, distractions, and every other conceivable manner of deceptive tactic is being weaponized and applied to keep an unknowing public in complete darkness as to what is happening to them.
The system, THEIR SYSTEM, has been twisted into an in our face nightmare state for the middle class. A psyop, an extreme counterintelligence sabotage de-construction propaganda scheme on an unprecedented scale…
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A key component of their system, of which we are all FORCED to participate, LEGALLY REMOVES wealth/ownership/liberty and freedoms from the masses and pushes it right up to the elite class.
Does that sound a bit harsh? It’s time to wake up, as a new phase is about to begin.
Despite the current propaganda campaign against us, the fact is this; the world economy is contracting at its fastest pace on record, while at the same time, central banks are hyper-ballooning not only world debt, but also the currency supply/monetary base.
This mechanism is deliberate, moreover, it is designed to INCREASE demand for more central bank issued notes. As the currency loses purchasing power/is devalued, MORE CURRENCY MUST BE CREATED as it now takes more central bank issued notes to buy everything and anything.
Obviously, this process is massively inflationary, but it gets worse. Just this past week the Federal Reserve announced that it is about to cut rates beginning in September, effectively instituting a quantitative easing monetary policy.
Quantitative easing/QE is emergency monetary policy.
It was this same monetary policy/QE, which was implemented during the stock market crash of 2008. QE greatly inflates the debt. QE introduces VAST amounts of “new money” into the system, and this new money is then used by the issuing central bank, in this case the Federal Reserve, (which is neither federal and has no reserves), to buy back or monetize the debt…
ALERT:
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This “new money” pumped into the system further distorts asset prices, it artificially inflates the price action of risk assets/stocks. Artificially suppressed rates open up a doorway for cash to make its way into the stock market. Artificially suppressed rates also inflate the price of real estate.
“New money,” which is in reality not money, but currency introduced into the system, IS AN ECONOMIC DESTROYER. Easy money is inflationary as it is currency purchasing power negative.
Suppressed rates allow corporations to borrow cash for next to nothing, who then go on to sell their own corporate bonds/debt at higher rates and therefore profit from lower rates. Suppressed rates fulfill a corporate agenda and destroy small businesses. Is it any surprise to you that GONE are the mom-and-pop shops of yesterday?
Lower rates also allow banks to reduce the rate of interest which they pay to savers via their interest earning accounts.
Since 2008, when the Fed began QE, savers have been robbed blind of TRILLIONS of dollars in realized gains. Moreover, now that the Fed is about to enter upon a rate cutting scheme as to further destroy the middle class in favor of fulfilling the corporate agenda, savers are about to be robbed even more.
“New money creation” has an expansive and disproportionate effect upon different classes of people. The effect of new money pumped into the system benefits some, at the expense of the masses, this is called The Cantillon Effect.
The Cantillon Effect. As “new money” is pumped into the system by central banks, certain groups (banks, Wall Street, corporations, and the elite class), get access to this money first. Having access to new money first allows these groups to gain an arbitrage opportunity, they’re able to spend money before prices increase across society via inflation.
As new money is introduced into the system, it takes time for the new currency to “trickle down,” or make its way through the economy down to the regular guy/gal. The amount of time that it takes for “new money” to trickle down depends on economic conditions. For example, in a slow or contracting economy the time it takes for new money to trickle down can take YEARS. And by the time that this new money trickles down to the regular guy/gal, it has lost a vast amount of purchasing power.
In conclusion, central banks are unleashing the floodgates via the mechanism of artificially suppressed rates and currency devaluation—and the economy will suffer; however, the illusion of a higher stock market will fool the masses into believing that the economy remains strong.
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