America is trapped in a deadly debt fire pit – and no one is thinking ‘outside the box.’
Peter Schiff “QE’s creeping Communism” – ZeroHedge 11-3-15
The U.S. economy is slowing remarkably, and despite the continuous assertions by the Fed that rate hikes are likely in the very near future, I believe we are stuck just as firmly in the stimulus trap as Japan. The main difference between the U.S. and Japan is that Japan began this “experiment” from a much stronger economic position. Japan was a creditor nation, with ample domestic savings and large trade surpluses. In contrast, the U.S. started as the world’s largest debtor nation, with minimal savings, and enormous trade deficits. So if Japan, with its superior economic position, could not extricate itself from this trap, what hope does the United States have?
If the Fed is unable to raise rates from zero, it will also be have no ability to cut them to fight the next recession. So the next time an economic downturn occurs (one may already be underway), the Fed will have to immediately launch the next round of QE. When QE4 proves just as ineffective as the last three rounds to create real economic growth, the Fed may have to consider the radical ideas now being contemplated by the Bank of Japan.
So this is the endgame of QE: Exploding debt, financial distortion, prolonged stagnation, recurring recession, and the eventual government takeover of industry and the economy. This appears to be the preferred alternative of politicians and bankers who simply refuse to let the free markets function the way they are supposed to.
If interest rates were never manipulated by central banks and QE had never been invented, the markets could have purged themselves years ago of the speculative bubbles and mal-investments. Sure we could have had a deeper recession, but it also could have been much shorter, and it could have been followed by a far more robust and sustainable recovery.
For America, there is a path back up out of the debt fire pit.
There is a plan which provides for massive debt reduction at ‘ground level’ and restores free market economics.
The liquidity flows from this plan would act as powerful debt quenching ‘blackline’ – in forest fire fighting terminology – and allow for gradual rate normalization and price discovery in the credit markets.
In the precisely the same way that ‘back fires’ are set to eliminate combustible fuel in the advancing path of a wildfire, this economic acceleration plan would quench the explosive deflationary power of debt across all levels of society.
There is only one plan in America that returns the allocation of resources to our citizens, thereby scaling back government control over the daily affairs of the people.
This plan treats all Americans equally. It does not confiscate wealth or redistribute income. It does not involve big government social engineering agendas.
The Leviticus 25 Plan 2015 – $70,000 per U.S. citizen The Leviticus 25 Plan 2015 (1188)