Video: The Fed’s ‘tapering’ absurdity in one simple analogy

shutterstock 589582 150x150 Video: The Feds tapering absurdity in one simple analogy

December 19, 2013
Sovereign Valley Farm, Chile

You probably heard the announcement yesterday: the Fed decided to reduce its unprecedented bond-buying program from $85 billion a month to “only” $75 billion.

The reaction all around the world from financial analysts and commentators shows that decisions made behind closed doors by a handful of wise men and women matter more than what the actual productive economy is really doing.

It’s absurd. A tiny group of people controls the US dollar, and the dollar still rules the world, making these shadowy characters the true power behind the throne.

For the past six months the whole world has been trembling at the sounds coming from the Fed about its “imminent” tapering of flooding the world with dollars.

Entire economies and their currencies, from India to Indonesia, have taken a nosedive because of the threat that the punchbowl will be taken away.

In the end what happened is comical. The Fed’s decision to reduce money printing by $10 billion a month means that now they’ll ‘only’ create $900 billion worth of new currency units per year.

And the reaction has spawned epic debates, discussions, and analysis about what’s next.

Here’s the bottom line– the Fed is still driving down a lonely stretch of road, pedal to the floor, steering straight into the great financial abyss ahead.

All of this debate and discussion is simply about whether the Fed is in 4th gear or 5th gear. Ultimately it’s irrelevant… because they no longer have any brakes.

They simply cannot stop. Ever. If they stopped printing, the whole phony financial system in place today would crash miserably and take down whole governments and countries with it.

And that is where this chapter of the financial system will end. Reset. And start anew on a fresh page… this time underpinned by sound money.

If this seems fatalistic, it’s not. It’s just a dose of reality. Printing money has always been the last, desperate attempt of insolvent nations.

History can produce a grand total of ZERO examples of nations that printed their way into prosperity.

And it would be foolish to think that this time is any different.


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