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The Cheque-Kiting Economy
To date, I and every other economic commentator have failed dismally in our efforts to communicate the insane manner in which all Western economies have been mismanaged (and effectively bankrupted). Specifically, we have failed to convey to the average person the inherent fraud of the Western (and now global) monetary system. The reason for this failure is obvious. Decades of saturation-brainwashing have programmed the ordinary person to regard our current monetary system as "normal", or even "proper". Thus any efforts to explain this fraud have been doomed to failure. What is needed is a real-world analogy to pierce this brainwashing, and fortunately such a perfect analogy already exists: "kiting" cheques. Most people are familiar with this colloquialism, as it is an expression which is frequently encountered along-side another, ever more present Western colloquialism: "deadbeat". Deadbeats kite cheques – it’s as natural to them as breathing. They write one (bad) cheque to supposedly "cover" another one. And as long as people are foolish enough to accept cheques from a deadbeat, the deadbeat can continue to delay his (or her) own bankruptcy. Since Western economies went off of the gold standard and began a new era of permanent deficits, all Western economies have been "cheque-kiting economies". The only way in which all of these economies have been able to delay their own bankruptcy is by "kiting" ever larger cheques. There are literally only two differences between how Western governments kite cheques versus how ordinary deadbeats do so. First of all, unlike the average deadbeat, our governments are literally able to get away with writing cheques to themselves. Indeed, that is the exact process for creating every single "dollar" of our worthless paper currencies. Our government "writes a cheque" to its own central bank – with absolutely nothing to back/cover the cheque – the central bank hands our government "money" (i.e. worthless fiat currency which they print out of thin air), and suddenly everyone is "rich". Without our governments kiting these cheques, and without our governments "conjuring money" out of thin air every Western economy would have already been bankrupted decades earlier. However, as horrible/fraudulent as this monetary system has been for all of these years, our crooked and fiscally irresponsible governments have literally made their fraud ten times worse since the Crash of ’08 and the creation of a new bankster euphemism: "quantitative easing". Understand that in previous years our governments retained enough of a shred of integrity to try to hide their cheque-kiting, that is they managed to dupe all of the idiot-economists into believing that their new "monetary model" of creating all of our "money" from debt was economically valid. In other words, they convinced the idiot-economists that it was somehow "different" when our governments kited cheques versus an ordinary deadbeat endeavouring to do so. All that has changed with quantitative easing. "Quantitative easing" is nothing but openly and shamelessly cheque-kiting. Instead of our governments quietly writing a series of (small) bad cheques to themselves to cover each year’s incremental deficit; our criminal central banks and morally/intellectually bankrupt governments trumpet the news that they are kiting huge cheques to (supposedly) "fund economic expansion". In this one respect the politicians and banksters have been totally transparent: they are kiting these cheques (to themselves) to "create money", at which point they take all of this funny-money and go around buying-up assets to drive up prices, and supposedly generate economic growth through what they absurdly call a "wealth effect". Here again we see the deadbeat mentality of bankster and politician alike clearly on display. Only the most ignorant or shameless deadbeat could actually assert that you can "create wealth" by kiting cheques. Rather, all that can be created by kiting cheques are Ponzi-schemes: pumping up a particular asset or market with bogus flows of "money". Obviously with any/all deadbeats there comes a time (usaually in a matter of days) when the fraud (and resultant Ponzi-scheme) collapses, the deadbeat is exposed to the world – and no one ever trusts the deadbeat again in terms of accepting any of their "credit". This brings us to the second difference between the ordinary deadbeat and Western deadbeat-governments (and deadbeat-bankers): unlike the ordinary deadbeat, the government/banker deadbeats are allowed to make up their own rules. And thus we have the Western monetary system: a regime where cheque-kiting is not only perfectly legal, but is deemed the only "proper" manner in which to finance economies. Because the fat-cat deadbeats can make up their own rules, and call their fraud, cheque-kiting, and Ponzi-schemes "legitimate banking", this is the only reason they have been able to delay the fate of all deadbeats – bankruptcy and disgrace. So why have all these $trillions which were printed to (supposedly) generate "economic growth" done absolutely nothing to "stimulate" these deadbeat-economies? Because the banksters and politicians have been lying to us, as usual. In fact none of this quantitative easing was ever intended to "create economic growth". Indeed as the writers of all of these bad-cheques, no one knows better than the banksters and politicians that you can’t simply invent "wealth" out of thin air. The real purpose of all these $trillions was to prop-up the hopelessly insolvent big-banks. This is why every penny of these trillions has been funneled directly through the banking oligopolies. However our puppet-governments aren’t funneling these $trillions through the criminal banking syndicate to make them rich. Rather, they are trying to "re-inflate" the banksters’ Ponzi-schemes which have already been rendered worthless by their reckless gambling. It is the economic equivalent of "trying to put Humpty-Dumpty together again" – and naturally it has failed. All the big-banks remain hopelessly insolvent, and if/when they are ever taken off their monetary life-support they will fold as fast as an umbrella in a hurricane. But there is one (tiny) group that is getting fatter and richer off of all this quantitative easing: the bond parasites. In precisely the same manner in which water can be relied upon to flow downhill, all Western economies have been economically "tilted" so that all wealth flows into the pockets of these shadowy billionaires and trillionaires – who have dubbed themselves "The Pilgrims". While our criminal bankers and puppet-governments have bankrupted themselves as a consequence of their greed, corruption, and gross incompetence; all of the rest of us have been squeezed dry by a fundamentally flawed form of taxation: income taxation. As I have explained on many previous occasions, as a necessary fact of arithmetic all income-taxation systems will (over time) transfer all of the wealth of a society into the hoards of the ultra-wealthy – The Pilgrims. Consequently, our governments have been rendered structurally insolvent by this combination of serial theft (by taxation) and gross economic mismanagement. With all of the wealth having been squeezed out of the bottom 80% there is no level of government services/spending which could ever be funded out of tax revenues from the bottom-80%. You can’t "tax" wealth which does not exist. Thus the reason why our puppet-governments in North America have not even tried to begin moving toward a "balanced budget" is that the only possible source of revenue which could close these structural deficits is through taxing the $100+ trillion being hoarded by The Pilgrims, but sadly our traitor-governments refuse to tax the wealth of their Masters.. Indeed, Europe provides the empirical proof for this assertion: the more "austerity" that Greece’s traitor-government imposed on the bottom-80%, the more the economy shrank – and the larger its deficits got. This form of economic fascism (popularized by the demonic Milton Friedman) has consistently destroyed economies around the world for 40 years. And once Europe’s cheque-kiting Ponzi-schemes have finished imploding, we’re next. |
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