The Fed Has Its Finger On The Button Of A Nuclear Debt Bomb

This article was originally published by Brandon Smith at Alt-Market.com

I hear a lot of talk lately in the alternative media (and even the mainstream media) of the potential for World War III. The general assumption when one hears that term is that “nuclear conflict” is imminent. But a world war does not necessarily have to be fought with nukes. For example, we are perhaps already witnessing the first shots fired in a global economic war as the Trump administration gets ready to implement far-reaching trade tariffs. This action might provide cover (or justification) for destructive attacks on the U.S. fiscal system by China, Japan, Russia, the EU, OPEC nations, etc. The ultimate attack being a dumping of their U.S. debt holdings and the death of the dollar’s world reserve status.

Of course, an economic “world war” between nations would in itself be a smokescreen for and an even more insidious internal war being waged against the global economy by central banks.

There is a longstanding misconception that central banks always manipulate economic conditions to make them appear “healthy” and that the main concern of central bankers is to “defend the golden goose.” This is false. According to the evidence at hand as well as open admissions by central bankers, these private institutions have throughout history also deliberately created financial crises and collapses.

The question I always get from people new to the field of alternative economics is — “Why would central bankers crash a system they benefit from?” This question is drawn from a flawed understanding of the situation.

First, there is the assumption that economic systems are static rather than fluid. In reality, vast sums of wealth can be transferred into and out of any notion on a whim and at the speed of light. The collapse of one economy or multiple economies does not necessarily include the destruction of banker wealth. Even if wealth was their top goal (which it is not), global banks and central banks do not see any particular economy as a “cash cow” or a “golden goose.” From their behavior and tactics in the past, it is more likely that they see national economies as mere storage containers.

Banks can pour their wealth, which they create from thin air, into one or more of these many available containers. They can circulate that wealth within the container for a time and then pour all their wealth out at a moment’s notice. One container is no more valuable to them than any other container, and sometimes sacrificing a container can be beneficial.

The perceived destruction of a national economy can often be exploited as a means to a greater end. Usually this “greater end” means exploiting the crisis to justify centralization of power or the transfer of power from the public into the hands of an elitist class.

I have outlined the history of such transfers on numerous occasions, including the liquidity crisis of 1914 (just after the establishment of the Federal Reserve) leading into World War I and the subsequent hoarding of financial power by banks as well as the creation of the League of Nations.

Or how about the artificial bubble in multiple asset classes created by the Federal Reserve in the 1920s through low interest rates? A bubble which was then burst through the aggressive raising of interest rates at the onset of the Great Depression. This crash coincided with other fabricated economic disasters in Europe and Asia, leading to social despair, the rise of communism and fascism and World War II. This crisis benefited the banking establishment greatly as thousands of smaller independent banks were crushed and a handful of major banks devoured all assets. And, let’s not forget that WWII led to the creation of globalist edifices like the United Nations, the IMF, World Bank, the beginning roots of the European Union, etc.

Every new economic calamity seems to consolidate property and bureaucratic control into the hands of the same class of technocrats. And each calamity is linked to a very important economic factor — massive debt dependency.

So, let’s fast forward to today’s era of burgeoning crisis and how central banks like the Fed are feeding the fire of disaster. I would like to focus most of all on our debt situation to illustrate how the Fed can and will trigger an explosion, a controlled demolition of our financial system. What is our debt situation in the U.S. today?

The Consumer Debt Bomb

Total American household debt skyrocketed beyond $13 trillion at the end of 2017, well beyond historic highs. This is the fifth consecutive year of household debt increases, including credit cards, auto loans, mortgages, student loans, etc. This trend suggests that the “economic recovery” so far has not actually been based on any legitimate wealth creation or resurgence, but an even greater dependence on the same debt that helped cause the crash of 2008. The Fed’s money printing did NOT trickle down to consumers as was originally promised.

While these sectors of consumer debt did not necessarily enjoy the same near-zero rates as banks and corporations did after the crash and the bailout bonanza, their rates are now rising along with the Fed’s rate increases. This is affecting numerous asset classes including housing markets and auto loans.

The cold hard reality is that as the Fed raises interest rates all other areas of the economy come under pressure. The average citizen, with his/her record debt levels, is now subject to the machinations of the central bank through the arbitrary shifting of a single data point like “inflation”.

The Corporate Debt Bomb

This debt bomb is possibly the most subversive and the least understood. I have been warning about how corporate debt and rising interest rates could cause a stock market crash for quite some time, but only recently have mainstream analysts caught up to this realization.

Today, institutions like S&P Global Ratings are showing that at least 37% of 13,000 corporations examined have a debt to earnings ratio of five times, making them “highly leveraged.” This debt level is also even higher than it was in 2007 just before the collapse of Lehman and the beginning of the credit crisis.

The concern goes beyond debt holdings, though. Consider the fact that corporations have been exploiting low interest rates to borrow incredible sums of cash for the sole purpose of purchasing their OWN stocks. Stock buybacks are basically a legal form of market manipulation in which companies buy stocks back from the public and greatly reduce the number of existing stocks circulating in the market, thereby artificially increasing the value of each stock overall and keeping the Dow in the green.

Stock buybacks have been the primary fuel for the longest bull market in history, a bull market so fake that even the mainstream media has been questioning its validity lately. Stock buybacks are completely dependent on cheap debt, and cheap debt is disappearing as the Fed continues raising interest rates. The natural reaction by stock markets will be a crash.

Some people may question whether or not the Fed is actually doing this “deliberately,” or if they are simply ignorant. I would refer them to the recently released Fed minutes from 2012, in which Jerome Powell, now the chairman of the Federal Reserve, talked repeatedly of the negative reaction that would occur within markets once the Fed began cutting its balance sheet holdings and raising interest rates after addicting equities markets to the drug of easy profits.

Jerome Powell himself is recorded as knowing exactly what will happen as interest rates rise, and he is continuing to raise them anyway, while also cutting the Fed balance sheet far faster than was originally telegraphed to the public. How can anyone in their right mind argue that the Fed is not bringing the U.S. economy down deliberately?

The National Debt Bomb

This debt bomb has a much longer fuse that the other two, but in the wake of a potential global trade war (World War III), the question arises as to how long it will take before major U.S. treasury bond holders like China dump their holdings in retaliation.

With Trump refusing to take a stand against the continued raising of the national debt ceiling, and the addition of his $1.5 Trillion infrastructure spending plan, there is little doubt that our national debt will continue to rise. Therefore, foreign investment is essential.

It is important to remember that the Federal Reserve used to be the largest purchaser of U.S. debt or the “buyer of last resort.” Now, the Fed has ended quantitative easing and is cutting its balance sheet swiftly. So, the only buyers left are foreign central banks and investors. My prediction is that the Fed will not step in if a trade war escalates to a treasury bond dump. Or, that they will not step in until it is far too late to stall the resulting crisis.

In Barack Obama’s eight years as president the national debt was essentially doubled. This is a unsustainable rate of debt issuance, even for a nation with the world reserve currency. If we lose foreign investment and the world reserve currency then that debt accumulation will come back to haunt us.

It is important to remember that whatever happens within our economy and the global economy, central banks like the Fed have fully facilitated the bubbles produced as well as the inversions that result. The Fed knows exactly what it is doing. And all other factors, from the Trump trade wars to foreign dumping of U.S. treasuries and the dollar, will be a distraction from the banking elites truly culpable.

Economic warfare can in some cases be just as devastating as nuclear warfare.  It can wipe out entire populations, give rise to tyrants and enslave the minds of individuals through the weaponization of resource scarcity.  Such wars, though less psychologically immediate as our cinematic fears of atomic doom, should be taken very seriously, and the culprits behind them have to be dealt with harshly.

***

If you would like to support the publishing of articles like the one you have just read, visit our donations page here. We greatly appreciate your patronage.

You can contact Brandon Smith at: brandon@alt-market.com

After 8 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.

Why The Globalists Need A War, And Soon

This article was originally published by Brandon Smith at Alt-Market.com

It is difficult to gauge and understand geopolitical and economic events without first comprehending the fact that much of what happens in the world is engineered to happen and with a specific encompassing goal in mind. If you subscribe to the theory that all is random “chaos” and outcomes are circumstantial or coincidental, then you will be lost in the dark on most things. If you think a globalist “conspiracy” would require “too much control” or foresight, I would point out that organized conspiracy by people in power is a matter of history, not of theory. If such cabals were prevalent in the past, it is rather foolish to dismiss the reality that they are prevalent today.

In my articles “The Economic End Game Explained” and “The Economic End Game Continues,” I outline considerable evidence supporting the following conclusion: International financiers and political puppets in Western AND Eastern countries share a deep rooted ideology called “globalism” or the “new world order.” This ideology demands total centralization of economy and government resulting in a single global fiscal authority, a single global monetary system and a one world ruling structure. Obviously, such a pursuit would take extensive time and planning. It is a long term project, with moments of accelerated change.

The globalists refer to the process of their intended change as the “global economic reset.” A reset of the world’s economic processes is not so far fetched as skeptics like to argue. When an organized group of ideologues maintains control over the currency production and interest rates of most nations on the planet, it would hardly be difficult to manipulate politicians, manipulate legislation or even scientifically conjure financial bubbles and collapses. By extension, it would also be simple to trigger international conflicts if needed.

But why would war be a necessary ingredient to globalization?

War is the ultimate distraction, the ultimate divider and, perhaps ironically, the ultimate consolidator. In the past century, war always seems to follow or coincide with economic crisis events that are later exposed as products of the banking elites and their aggressive monetary policies. And, in the aftermath of these wars, supranational institutions are often founded (like the League of Nations, the United Nations, the Bank for International Settlements and the International Monetary Fund) as “solutions” to preventing mass tragedies from ever happening again. War is a social steroid promoting mutation, usually in an unhealthy way.

In recent years the concept of “world war” has given way to a more insidious trend of constant and sporadic regional wars. In most cases these regional wars have helped to contribute to the steady downfall of the U.S. through accumulating national debts as well as international distrust or hatred. In fact, one might conclude that if we were to look at the macro-picture of the vast array of regional wars being perpetrated by the globalists we would see that all of them combined are amounting to a kind of world war in a different form.

That said, the globalists will need a new and far larger catalyst for their reset, and soon. Why? Because a sizable distraction is essential to the next phase of the ongoing collapse. A pervasive scapegoat is needed; one that can be blamed for almost any negative scenario. This draws public attention away from the globalists themselves as the culprits behind fiscal crisis, maybe so much so that it will take decades before the mainstream ever questions what actually happened, if they ever question anything at all.

The fear generated through an uncertain war also acts as a form of psychological alchemy, transmuting the collective public mindset to accept centralization they never would have accepted otherwise.

Here is the issue at hand — central banks are seeking a monetary reset more than anything else. A monetary reset demands massive debt, followed by massive stimulus, followed by fiscal tightening, then massive inflation, followed by currency implosion that opens the door to a replacement structure (most likely in the form of blockchain technology and cyrptocurrency). The credit crisis of 2008 conveniently provided at least two of these elements so far, vast debt and stimulus measures. Today, we are beginning to witness the fiscal tightening phase of this process.

As I have been warning since before the Fed taper of QE, the central bank trend will lead to a removal of stimulus support, facilitating a crushing blow to bonds and equities markets. Now, interestingly enough, the Bank for International Settlements is warning of the same thing as 2017 comes to a close. It should be noted that this is not the first time the BIS warned of an impending crash; they also predicted with keen timing the derivatives and credit crash back in 2007. This was, of course, too little too late for the masses to react in any positive way, though.

Their latest warning arrives on the heels of the December Federal Reserve meeting at which it is widely expected that the central bank will raise interest rates yet again while taking the next step towards reducing their balance sheet. Many mainstream and alternative economists doubted the taper of QE and doubted the hiking of interest rates. They were wrong. Just as the doubts over the Fed balance sheet reductions are wrong. The pullback in these measures will invariably strike bonds and equities in a negative way. Time is running out.

But, the banking elites have taken steps. For example, they have in place a perfect distraction in the form of the Trump Administration. With Trump loudly and proudly taking credit for the stock market bull run over the course of the past year, who do you think the public will blame when those same markets go south as the central bank pulls the rug out? Probably not the Fed or the establishment banks.

Trump has also in an odd way created the perfect rationale for the Fed as they increase interest rates and end the cheap money that has been feeding stocks for so long. With the passage of Trump’s tax “reform” plan, the fed can now argue that interest rates MUST be raised in order to create incentives for treasury investment and to pay for Trump’s intended public works programs and military expansion goals. Meaning, the fed can claim it is not culpable for any negative effects from removing cheap capital from the table because Trump’s actions demanded it.

I would also point out that in most cases in history the Fed has lowered interest rates immediately following tax cuts and reforms. They did this after Reagan’s tax reforms in 1981 and in 1986, as well as after George W. Bush’s tax reforms in 2001. Juxtapose that with 2018, as the Fed intends to continue RAISING interest rates in the wake of Trump’s tax reforms. Meaning, they are taking the opposite action from what they have often done in the past.  Something to think about…

Trump’s tax plan itself is primarily a distraction from the real problem. First, when comparing tax brackets from this past year to the intended tax brackets for next year under the Trump reforms, there is almost no change whatsoever for the average American. The only major reductions in taxes are, no surprise, in the form of corporate tax cuts; reducing the corporate tax ceiling from 35 percent to 20 percent. This is trickle-down economics at best, and not a solution to a single problem facing the public and the country in terms of the flailing economy.

Second, why are we talking about income tax “reform” when we should be talking about abolishing the income tax and the Federal Reserve altogether? Whatever happened to that dialogue? It has disappeared down the memory hole.

Trump’s tax plan will do nothing to slow or undo the current economic crisis because the crisis stems directly from central banking monetary policies and interest rate manipulations. Tax reform is far too little far too late, and stands as nothing more than meager bone thrown to conservatives to keep them quiet for a while. This is what Trump’s tax reform does do very well, though — it rallies conservatives around Trump, regardless of whether it actually helps them or not. Much like Obama’s universal health care bill, which has proven to be a continued disaster in practice, but was rather successful at the time of its passage in rallying the liberal base. Trump is certainly going to need a base of public support if he is going to initiate a major war campaign.

North Korea continues to be the most likely powder keg for the next distraction event. Two months of quiet led people with short attention spans to dismiss the notion, and perhaps some of them will double down and continue their denials, but it is growing more difficult to ignore by the day. I would argue that North Korea is the most viable option simply because almost no one expects a war with the isolated nation to happen. The level of complacency despite all the signals to the contrary is palpable.

The U.S. has staged three aircraft carrier groups in the region for the first time in a decade. Major combat exercises are underway, designated Vigilant Ace 18, specifically designed to simulate an invasion of North Korea with over 230 aircraft and 12,000 American troops participating. North Korea has warned of “nuclear war” as a consequence.

North Korea may have the ability to follow through, at least on a limited scale, as they have recently test launched what appears to be a huge leap in missile technology — an ICBM capable of carrying multiple warheads and striking the Eastern seaboard of the U.S. How the North Koreans came to possess this technology so quickly is a question everyone should be asking.

In response, the war rhetoric has been amplified. White House National Security Adviser H.R. McMaster has stated that North Korea is the greatest immediate threat to the U.S., saying that the potential for war “is increasing every day.” Warmonger and enemy of the Constitution, Lindsay Graham, has stated that the families of U.S. military personnel should be moved out of South Korea for their own safety, and that “We’re getting close to military conflict.”

So how close is close? I maintain that war with North Korea is likely by the second quarter of 2018. I also maintain the globalists will continue the strategy of multiple regional conflicts and global economic warfare rather than a one-off global nuclear mess that would wipe out trillions of dollars and decades of effort put into infrastructure and surveillance grids.

This would be advantageous to the globalists if they plan to continue interest rate hikes and stimulus removal by central banks around the world. It would help hide the effects of balance sheet reductions on stocks and it could expedite the fall of the dollar as the world reserve as Eastern and European nations apply alternatives like the IMF’s SDR basket system in response to the massive debt brought on by a military quagmire for the U.S.  In other words, catastrophic fiscal developments that were already going to happen anyway due to central bank sabotage will be entirely blamed on geopolitical crisis rather than the true culprits.

Finally, will the East step in militarily to prevent a conflict in North Korea? No. China has already stated that if North Korea attacks first, then they will not obstruct regime change by the U.S.

This flies in the face of those that believe in the false east/west paradigm. China has left the door wide open to potential conflict. If the globalists want a war in North Korea, they will create a war in North Korea, and the Chinese have publicly admitted they will step out of the way to let it happen. A false flag is probable. More provocations leading to a violent response by North Korea would also be rather easy to produce. So far, North Korea remains the best existing shock and awe event to hide a globally disintegrating economic situation. Would the globalists pass up an opportunity like this? There is no reason for them to do so.

Special Note: Moriarty’s speech on the “inevitability of war” is a rather accurate portrayal in my opinion of the globalist mindset – rationalizing the artificial engineering of conflicts because “human nature” dictates that such events will “happen anyway”, so why shouldn’t they benefit? Of course, if human nature was a reliable ally of the power brokers, then they would not need to engineer these crises in the first place. Such is the insane circular logic of organized psychopaths.

***

If you would like to support the publishing of articles like the one you have just read, visit our donations page here. We greatly appreciate your patronage.

You can contact Brandon Smith at: brandon@alt-market.com

With global tensions spiking, thousands of Americans are moving their IRA or 401(k) into an IRA backed by physical gold. Now, thanks to a little-known IRS Tax Law, you can too. Learn how with a free info kit on gold from Birch Gold Group. It reveals how physical precious metals can protect your savings, and how to open a Gold IRA. Click here to get your free Info Kit on Gold.