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Old 07-07-2016, 03:25 PM
Danny B Danny B is offline
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,148
Bonner, the difference between paper money and credit

Steve Saville; "Most rational people with some knowledge of economic history will realise that the US$ will eventually be the victim of hyperinflation."
It's amazing how many writers, economists and, people in general believe that hyperinflation is coming because the FED increased the "money" supply.

Bonner; "The Fed is not printing money. If it were printing money, we’d have more money around… and higher consumer prices." "Yes, their new system is totally fraudulent and absolutely ruinous – just like an old fashioned money-printing scheme. But the fraud takes much longer to uncover… and the ruin is only obvious at the end. "
"Instead of printing money itself, the Fed allows banks to create an almost unlimited amount of credit "
" At first, this new credit-money acts much like printing-press money: It gives people money to spend that nobody ever earned. Everybody is happy.

But if you keep on creating more and more paper money, the fraud is soon obvious. Prices rise. People realize that they have no more purchasing power than they had before. " " By setting up this credit-money system, on the other hand, the feds avoided that problem… or at least, postponed it.

Between 1980 and 2016, for example, Americans spent $32 trillion in net, excess credit. That’s credit (and debt) above and beyond the historic relationship between GDP and debt. "
" If the feds had handed out paper money, prices would have gone up. But even in a recession, or a debt deflation, the cash would still be there. Printing-press money raises prices, permanently.

But a credit-money system is very different. Every new dollar that comes into the system is also another dollar of debt." "Now, American consumers, businesses, and government all drag behind them about $60 trillion in debt."
" Debt is just the flip side of credit. As debt goes bad, credit disappears. And then the system that created so much credit-money will go into reverse, destroying the nation’s money supply.

The money supply (actually, the supply of ready credit) will shrink – suddenly and dramatically. And what should have been a minor, routine pullback in the economy will become a catastrophic panic."
The Fed’s “Doomsday Device” Is About to Explode
Once you inject paper money into the system, you can't get it back out. A paper note exists forever. Credit is just a belief that relies entirely on confidence. "Americans spent $32 trillion" We've already had hyperinflation but, only in the credit supply, NOT in the paper money supply.

Planet Debt and the Deep State; Planet Debt
Armstrong said that 26% of Americans are hoarding cash at home.
"During the first and second quarters of 2014, the velocity of the monetary base2 was at 4.4, its slowest pace on record. This means that every dollar in the monetary base was spent only 4.4 times in the economy during the past year, down from 17.2 just prior to the recession. "

U.S. Banks Hoard $2 Trillion of Ultra-Safe Bonds - Bloomberg
Why Are Corporations Hoarding Trillions? - The New York Times
America's companies are hoarding $1.4 trillion in cash - Sep. 25, 2015 CNN
The Rich Are Hoarding Cash And It's Making Us A Lot Worse Off Huffington Post
Report: It's YOUR Fault: Fed Says Americans Who "Hoard Money" SHTF Plan

The cash supply is going into hiding and the credit supply is soon? to go into reverse.

7/07 A furious Italian Prime Minister slams Deutsche Bank – Zero Hedge Italy is the 10th largest economy and the third largest bond market. Was that a good idea?
7/07 Voodoo banking isn’t the answer – Bloomberg
7/07 “It’s starting to feel like 2008” – Daily Reckoning
7/07 Goldman warns of bear market in next few months – ETF Daily News
7/07 Our future is (literally) crumbling before our eyes – 24hGold
7/07 How to prepare for the worst bear market you’ve ever seen – Casey Research
7/06 Forget Brexit — China’s currency is falling again – GATA China already has $ 30 trillion in debt that it can't service. As it's currency falls, it's dollar-denominated debt will become much more difficult to repay.
7/07 Panic withdrawals force three more UK property funds to freeze assets – Zero Hedge The property funds allow instant redemptions BUT, it takes a long time to sell properties and raise the cash.
7/06 Brexit shocks push the pound to fresh 31-year low – Bloomberg That set off the redemptions. Every breach of confidence creates even more flight out of investments and into alternatives.
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