Mrcauser’s Weblog

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Another great thinker who understands the solution…..

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Cut us a big check and we’ll pay off our debts to the banks and then buy new shit. No really! This solves most of the immediate problem of broke dicks struggling to get back on their feet and spending the economy back to boom.

Every time you give banks around the world a bailout they pay it to their owners and the politicians to cover their losses and there is little to make new loans which prolongs the start of a new boom.

Remember, a fiat system goes from boom to bust and back again. You would have to go back to a gold standard to stop it. And as long as the elites are in charge that aint going to happen. And until they have this power taken away we ain’t going to recover.

The next bust will be in your backyard and taking no prisoners when 100 million or so retirees in America start demanding their checks!

And we will get them!

The U.S.A can print all the money they need but it wont buy shit because of the ensuing inflation used to pay off 65 trillion or so in old debts. It remains to be seen if a new political paradigm will show up and make a difference in the way the Empire operates.

I’m betting it will come over the elites dead bodies. Don’t scoff as we see most of the Empire is falling apart as an over  whelming debt load makes the system unsustainable.

oftwominds: You Want Inflation? Here’s How To Get It

You want to create organic inflation, driven by consumers with plenty of cash chasing goods and services? Here’s how:

1. Reinstate the policy of paying 5.25% on all savings, effectively transferring wealth back from banks to citizens. If the banks can’t manage to do so and remain solvent, then close them down and liquidiate their assets and liabilities. Others will rise to take their places.

2. Print $5 trillion in cash, not credit, and liquidate all consumer debt and a couple trillion in mortgage debt for those who are not hopelessly underwater.

3. Aggressively cram down underwater mortgages onto the banks, forcing them to liquidate all their bad debt. Yes, this will reveal them as insolvent, but the goal here is not to save the financial Elites’ impaired assets, it’s to reset the housing market by clearing off all the impaired debt in the system.

By resetting the consumer balance sheet and paying interest, then you would be putting cash into households which could be spent in the real economy.

Is this a wise or prudent policy? I don’t know. The goal here was not to assess that question, it was simply to follow up on the goal of creating inflation. If you want organic inflation, you have to divert the national income from the banks to the citizenry, and you have to reset the housing market.

The Fed’s policies cannot create organic inflation, because all the Fed is doing is transferring wealth to the nation’s Elites. Their spending on luxuries and fine dining are not broadbased enough to generate organic inflation in the entire economy.

Borrowing money does not drive organic inflation: higher incomes and free cash drive organic inflation. If you want inflation, then you have to increase the incomes and assets of 60% of the households, not just the top sliver who own most of the financial assets.


Written by mrcauser

February 17, 2011 at 6:41 pm

Posted in Uncategorized

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