Uncommon Sense

January 19, 2017

But When We are Wealthy …

But when we are wealthy … well, the song has the same notes but the lyrics change when countries go from poor to rich.

I have made the point in previous posts that “free trade” is a weapon used by the “haves” against the “have nots.” (Free Trade’s basic function is to prevent the have nots from competing with the haves by selling them our more cheaply made stuff so they cannot develop a capacity to make that stuff for themselves and become our competitors.) China’s President just stated that China is committed to free trade. Therefore China has left the Club of Have Nots and entered the Club of Haves.

A similar dichotomy occurs within nations between those who are now “rich” and those who are “poor.” One often hears from the plutocrat’s representatives (pretty much all elected representatives now) that we can’t solve our problems by printing money. To do that would cause rampant inflation! Plutocrats do not like inflation because they are debt holders and they do not want those debts being paid with dollars worth less than when the debts was created.

And while simply adding dollars to the nation’s balance sheet can cause inflation it doesn’t have to, consider the $16 – $29 trillion the Federal Bank “printed” in the wake of 2008 financial sector meltdown to fix the frauds of the financial sector. Have you noticed the rampant inflation caused by this? No? Neither have I because there was none.

This yuge amount of money is four to seven times what Social Security would need to remain solvent … forever (depending on whose estimates you choose to use). Or a similar amount of money could have been printed to bail out all homeowners or student with onerous loans, but if one were to suggest any Social Security insolvency to be solved this way (there is no such thing currently, of course) or an effective homeowner/student bailout this way, you will hear the plutocrat’s representatives cry loudly that “We can’t solve our problems by printing money. To do that would cause rampant inflation!”

In other words, to solve their problems, it is okay. To solve our problems it is absolutely forbidden.

Note The money isn’t actually printed as $100 bills or any other kind of currency. Here’s how it works. If the Fed gives a bank $10,000,000 and it is required to keep a 10% “reserve” by law, then most dweebs like you an me think that the bank can load $9 million of the $10 million, keeping one of the ten in reserve. No, fool, that $10 million becomes the ten percent and the bank issues $90,000,000 of loans. So, $10 million just became $100 million. Note that the bank never handles any printed money in these transactions, they just add numbers electronically to accounts. Easy peasy.

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