Markets and The Economy: A GRAND DECEPTION AND A FUNDAMENTAL LIE.
By Gregory Mannarino
Markets and The Economy: A GRAND DECEPTION AND A FUNDAMENTAL LIE.
By Gregory Mannarino TradersChoice.net
Quick review. In finance and economics there exists only two fundamental truths, which when implemented are beneficial to We the People of the world.
These two fundamental truths are:
1. To have a strong economy you need a strong currency. A strong currency meaning having purchasing power, not relative strength. (Relative strength refers ONLY to comparative strength). Both the mainstream media and politicians prey on people not being aware of the difference between relative/comparative strength, and absolute strength, referring to purchasing power. Politicians will say things like “our currency is strong.” This is deceptive, as most people perceive this as the currency having strong purchasing power.
2. To have a strong currency, meaning high purchasing power, you need a corresponding rate of interest high enough to support the purchasing power of the currency.
The two above listed fundamental truths are universal.
However, when these two fundamental truths are flipped upside down, both the economy and the people suffer. However, for those who run the system and know how to take advantage of it, they benefit GREATLY by turning them upside down.
Selling a fundamental lie.
Central bankers, Politicians, and Wall Street all work closely together, and are in the business of selling lies, deceptions, distractions, half-truths, backtracking, propagating public misinformation and the like, (devilism in my opinion).
An integral part of their coordinated deception is selling We the People of the world on the grand idea that “lower rates is what we need to make our economy strong.” (Go ahead, make it up).
If we understand that lower rates steal purchasing power from the currency, how is this beneficial to the economy and the people?
Having lower rates sounds good to those seeking to borrow however, having lower rates means that you now need to borrow more weakened currency, (brought about directly by lower rates). Moreover, now it will take even more devalued currency to pay back what you borrowed.
The overall effect of lower rates and therefore currency purchasing power losses is inflation. Moreover, the effect of low rates creates massive price action distortions. By weakening the currency and therefore creating inflation/weakening the economy, low rates are also responsible for producing asset bubbles/stock market bubbles AND real estate bubbles. (Today losses of currency purchasing power are also, among other things, causing cash to seek yield in cryptocurrencies).
Low rates inflate stock market and real estate bubbles.
Cash always seeks yield! Low rates are directly responsible for inflating stock market bubbles. When rates are low, it opens a doorway for cash to flow into risk assets like stocks. This mechanism invariably leads to wild speculation in the stock market, and the result is massive price action distortions/stock market bubbles.
Low rates, and therefore currency purchasing power losses, inflate real estate/housing prices. The result is higher rent and vastly inflated real estate prices.
Lower rates and therefore currency purchasing power losses also lower our standard of living. People now must work harder, and longer, to acquire more devalued currency to maintain a particular lifestyle.
Lower rates accelerate global debt hyper-bubbles.
The simplest way to put a perspective on how lower rates accelerates debt hyper-bubbles is this. As lower rates are responsible for currency purchasing power losses, the demand for more currency grows.
The effect of lower rates/currency purchasing power destruction is an economic wrecking machine however, this mechanism allows central banks to inflate/introduce more “new money” into the system. The effect of new money pumped into the system does not affect all people equally, as those closest to the money benefit. This “close to the money benefit” is due to the inherent lag effect of how cash moves through an economy. (To further understand this principal, look up The Cantillion Effect).
Stock market investors, real estate investors, cryptocurrency investors, Wall Street Superbanks, CENTRAL BANKS, the ultrarich, multinational corporations, all benefit from low rates/currency purchasing power losses by knowing how to capitalize on price action distortions.
Low rates, and the promise of even lower rates to come, (possible even negative rates, as the world economy freefalls faster), will assure the creation of a modern global neo-feudalistic paradigm.
To have a strong currency, you must have a thrifty working class that is supported by a living wage. A working class that produces real goods.
Alexander Hamilton coined the phrase, the Productive Powers of Labor and noted the importance of Manufacturing
in his Reports to the U.S Congress. America was built by highly skilled and highly paid immigrant labor combined with great inventors who fled Europe seeking freedom from the British Empire.
Todays New British Empire, London and Wall Street, a newly constituted Money Empire invests in high tech weapons systems to police the world with the intention of ruling a World Government based on Slavery.
The U.S. Declaration of Independence was written and signed by the Founding Fathers, mostly self-educated men, who instructed Americans what they must do to keep their Republic.
It's up to Americans to take action!
The reason we are failing is our leadership. Our leaders lack accountability to the people, treating their positions as personal property. They prioritize their own desires over the will of those they serve. A lack of integrity and morality has historically destroyed more empires than mere ignorance or incompetence. Truth has been abandoned in governance, and we have allowed leadership to be dominated by dishonesty, often selecting individuals who distort or obscure the truth.
Until we demand accountability from our leaders and enforce it with meaningful consequences, we will continue to fail. For example, why should any president have the authority to pardon a convicted murderer, a court of his peers convicted him. Why is it acceptable for a member of Congress to use insider information to amass millions in personal wealth? The same people put Martha Stewart in jail for the same sin. Corruption and deception have been constants in governance, with virtually no administration free from falsehoods.
One suggestion: why not require every government official and governement employee to take an oath of office that explicitly includes the clause “under penalty of perjury”?
Under 18 U.S.C. § 1621, lying under oath in federal court or official proceedings is punishable by up to 5 years in federal prison. Yet, isn’t it strange how lawmakers often seem to place themselves above the law? The very individuals responsible for creating laws are rarely held to the same standard as those who must abide by them. How long would the president have to stay in jail if served 5 years for each lie in his fairwell speech.
While America has had its share of good days, it was never perfect—simply better than many alternatives. Waiting for promises like “Make America Great Again” is futile without addressing these systemic failures. True greatness requires morality, honesty, accountability, and integrity from leadership.