Brandon Smith – December 1, 2021
For many years now there has been a contingent of alternative economists working diligently within the liberty movement to combat disinformation being spread by the mainstream media regarding America’s true economic condition. Our efforts have focused primarily on the continued devaluation of the dollar and the forced dependence on globalism that has outsourced and eliminated most U.S. manufacturing.
The problems of devaluation and stagflation have been present since 1916 when the Federal Reserve was officially formed and given power, but the true impetus for a currency collapse and the destruction of American buying power began in 2007-2008 when the Financial Crisis was used as an excuse to allow the Fed to create trillions upon trillions in stimulus dollars for well over a decade.
The mainstream media’s claim has always been that the Fed “saved” the U.S. from imminent collapse and that the central bankers are “heroes.” After all, stock markets have mostly skyrocketed since quantitative easing (QE) was introduced during the credit crash, and stock markets are a measure of economic health, right?
The devil’s bargain
Wrong.
Reality isn’t a mainstream media story. The U.S. economy isn’t the stock market.
All the Federal Reserve really accomplished was to forge a devil’s bargain: Trading one manageable deflationary crisis for at least one (possibly more) highly unmanageable inflationary crises down the road. Central banks kicked the can on the collapse, making it far worse in the process.
The U.S. economy in particular is extremely vulnerable now. Money created from thin air by the Fed was used to support failing banks and corporations, not just here in America, but around the world.
Why does it matter where those dollars came from?
Because the dollar has been the world reserve currency for the better part of the past century, the Fed has been able to print cash with wild abandon and mostly avoid inflationary consequences. This was especially true in the decade after the derivatives crunch of 2008.
Why? The dollar’s global reserve status means dollars are likely to be held overseas in foreign banks and corporate coffers to be used in global trade. However, there is no such thing as a party that goes on forever. Eventually the punch runs out and the lights shut off. If the dollar is devalued too much, whether by endless printing of new money or by relentless inflationary pressures at home, all those overseas dollars will come flooding back into the U.S. The result is an inflationary avalanche, a massive injection of liquidity exactly when it will cause the most trouble.
We are now close to this point of no return.
