US Household Net Worth Plunges

Since the beginning of the greatest depression, US household net worth has plunged nearly 11 trillion dollars. All the while we continue to experience price inflation and expanded government spending.

In a normal economy that isn’t run by a bunch of criminals, we should expect to see price deflation as malinvestment is wiped out. Since our money is based on debt, as debt is reduced though defaults and write-downs, the monetary base should contract, there by leading to price deflation.

Of course, this is not what we are actually experiencing at the present moment since the criminal central bankers and politicians have decided to prevent the liquidation of malinvestment through a nearly endless series of bailouts, guarantees, and deficit spending.

Contrary to what the criminal Keynesians would have you believe, price deflation is a good thing. It does not lead to economic collapse. In a normal non-criminal monetary system, deflation will sink the paper money stock back down to the “real” money stock, which is a 1 to 1 ratio of paper issuance to the gold stock (or at least closer to this point).

There is some debate about how far the money stock would sink to in our current system of fraud and theft, but I personally think it would shrink until everything that can be considered waste is liquidated from the economy. At the most, it would shrink back down to the existing money stock we had prior to the abolition of the gold system back in the 1960s since this is the existing stock of money that is not based on debt (I highly doubt it would shrink this far though.) It should be noted that it takes very little fiat money to have a functioning economy since prices will adjust back down meet the amount of currency in circulation. As money becomes more scarce, prices will fall until a market balance is achieved between the demand for money and its supply. Once all the bad investments are liquidated, the economy will once again begin experiencing a normal demand for credit and lending can resume in a much more sane fashion.

In a non-criminal currency (ie. gold), inflation is caused by banks lending out more money than they have in gold reserves or by an increase in the gold stock. Business cycles are directly related to this fraudulent activity of excessive lending since the act of lending more paper money than the banks actually have in gold reserves artificially reduces interest rates, which leads to “booms” in the cycle.

These “booms” are when the malinvestment takes place due to excessively “cheap” money (credit) being available. Since money is cheap, investors are willing to take more risk than they otherwise would. The cheap cost of borrowing also sends a signal to investors that there is more capital goods available for future production than actually exists. Producers see the cheap rates and assume people have lots of savings available to spend on future consumption so industry reorganizes itself into the production of long term goods. Only later is it revealed that consumers are broke and the existing capital stock of goods that producers were relying on to finish their projects does not actually exist.

The “bust” is the market trying to correct this excessive lending and return itself to a proper ratio of gold to dollars. The “proper” ratio can be considered a point where all bad debts (malinvestments) have been cleared through defaults and write-downs.

In a totally unregulated system of gold back currency, the normal behavior of the economy is to experience constant DEFLATION. As the economy grows and becomes more productive, the value of the currency will INCREASE over time. A piece of gold will buy more and more goods as productivity increases. We should see constantly DECREASING prices, just as we see in the consumer electronics industry, due to technological innovation, competition, and increased efficiency.

The fact that we have not seen price deflation as household net worth has plumeted by nearly eleven trillion speaks volumes about the amount of fraud being conducted by the banks and criminal politicians. A reduction in a nominal net worth of 11 trillion dollars is only a big deal if it is NOT accompanied by deflation. Since we don’t have deflation – it’s a big deal.

Eventually, the market WILL win this fight. It is only a matter of time. The central bank and government will either wipe out the currency through the printing press, or they will allow the necessary deflation to occur and the debts to be cleared. If they wipe out the currency through the printing press, people will once again be forced to return to real money – gold.

Since early 2009 there has been a cumulative deflation of 2.3-2.9.

Now imagine if they would not have dumped what, in the excess of $30 Trillion into the bailout of entities and systems all over the world. There is no real way to know how much because the IMF and the Fed do not allow anyone to see their books. Now we have the new consumer protection bureau, run under the direction of the Fed.

So you can add another supra entity outside of our government.

Do you not just love the names they give these entities? The Federal Reserve, which there is no federal in it. It is a corporation wholly outside the purview of the government and our view. Now the twisted name of the Consumer Protection agency.

Time to start trading in gold and silver again. Is it unlawful to ask for payment in only gold, silver, platinum or other precious metals? Of course not, it is illegal, but not unlawful.

The destruction of the western societies is right on track.

Redistribution is all the craze.

reply to post by saltheart foamfollower


I give us 6 to 9 months before we have a currency crisis.

I'm sure they will start a new war before then to make us feel obligated to continue paying our taxes and using their fake currency.

Gold just hit another new all time high today.

reply to post by mnemeth1


Yeah, how does that go in the Constitution?

Section 8. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

I wonder if we could use this component to arrest all of them in the federal government?

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

Isn't quantitative easing and purchasing your own debt through the shell game considered counterfeiting, or the very least, check kiting?

Originally posted by saltheart foamfollower
reply to post by mnemeth1

 

Yeah, how does that go in the Constitution?

Section 8. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

I wonder if we could use this component to arrest all of them in the federal government?

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

Isn't quantitative easing and purchasing your own debt through the shell game considered counterfeiting, or the very least, check kiting?

Our entire monetary system is unconstitutional.

The constitution is clear that the states shall make nothing but gold or silver legal tender in payment of debts.

Legal tender means that if you offer to pay a debt in gold, your creditor must accept that payment.

Today, gold is outlawed as legal tender - only fake fiat paper money printed by the federal reserve is legal tender.

Originally posted by mnemeth1
reply to post by saltheart foamfollower

 

I give us 6 to 9 months before we have a currency crisis.

I'm sure they will start a new war before then to make us feel obligated to continue paying our taxes and using their fake currency.

Gold just hit another new all time high today.

edit on 21-9-2010 by mnemeth1 because: (no reason given)

I'll agree, but I say 9 months to 13 months, there has to be a correction made and there havent been any moves to restore value, or earnings and production.
I still go with my gut on this one, created national event, loss of electrical power and chaos for an extended period, resulting in dismantle and reassembly. NAU

reply to post by mnemeth1


im confused how can a corporation(the fed) outside of us law deem anything illegal(gold)?

Originally posted by neo96
reply to post by mnemeth1

 

im confused how can a corporation(the fed) outside of us law deem anything illegal(gold)?

edit on 21-9-2010 by neo96 because: (no reason given)

They have a subservient army of slaves to enforce their biddings.

The public could turn around tomorrow and say no more if they wanted to.

Of course, they wont because they are dependent like sheep are to the Sheppard.