3990 The Truth About The Stock Market Crisis. Prepare Yourself.
On Friday, February 2nd, 2018, Janet Yellen served her last day as Chair of the United States Federal Reserve, with Jerome Powell set to be sworn in as her replacement on Monday, February 5th, 2017. Under Yellen’s leadership, the Federal Reserve had planned three interest rate hikes in 2018 – decisions that would have a major impact on the world economy and the immediate future of the United States.It didn’t take long for now-former Federal Reserve Chair Janet Yellen to speak publicly, and on Sunday February 4th, 2018, she commented on the current value f the stock market: "Well, I don't want to say too high. But I do want to say high. Price-earnings ratios are near the high end of their historical ranges. If you look at commercial real estate prices, they are quite high relative to rents. Now, is that a bubble or is too high? And there it's very hard to tell. But it is a source of some concern that asset valuations are so high.”As new Federal Reserve Chair Jerome Powell was sworn in on Monday February 5th, 2018, the Dow Jones Industrial Average fell by almost 1,600 - about 6% - before recovering with a total decline of 1,179 points by the end of the day. All major indexes felt losses with the Nasdaq Composite falling by 3.8%, the S&P 500 decreased by 4% and the broad Russell 2000 dropped by 2.9%.The uncertainly over future monetary policy decisions by incoming Federal Reserve decision makers (three vacancies at the Fed have yet to be filled by President Trump’s administration) and Yellen’s outgoing commentary unquestionably influenced the recent market drop – but the full story is far more complicated.Your support is essential to Freedomain Radio, which is 100% funded by viewers like you. Please support the show by making a one time donation or signing up for a monthly recurring donation at: http://www.freedomainradio.com/donate
I hope you're doing well. I hope you're doing all right, strapped as we are to the central planning rollercoaster of hell known as the modern economy.
And just remember, of course, in times of economic chaos, money tends to flow from the panicked to the rational.
So here's some perspective on where we are.
The crash of 2018?
Prepare yourself accordingly.
So, we are in the place now where time has just become kind of weird and compressed, you know, like an accordion between the arms of King Kong, just two-dimensional almost.
This occurred so rapidly on Friday, February 2nd, 2018.
Janet Yellen served her last day as chair of the United States Federal Reserve, with Jerome Powell set to be sworn in as her replacement on Monday, February 5th, 2018.
Boy, that's just a weekend.
Under Yellen's leadership, the Federal Reserve had planned three interest rates hikes in 2018, decisions that would have a major impact on the world economy and the immediate future.
Of the United States, right?
So the higher interest rates are, the more people save, and the lower interest rates are, the more that they spend.
Now, saving and spending are important aspects of any economy.
If you never save anything, then nothing ever gets built or grown.
No new businesses really can start, because you need savings to lend out for new businesses.
And if you never spend, then the economy grinds to a halt.
So it's a balance that should be maintained by the free market, but hasn't, of course, for many, many decades.
Now, it didn't take long for now former Federal Reserve Chair Janet Yellen to speak publicly.
See, if you work for any nondescript software shop, you have a nondisclosure agreement that goes on forever.
But if you're head of one of the most powerful agencies in the known universe, you can just run your mouth on a Sunday.
Sunday, February 4th, 2018, Janet Yellen commented on the current value of the stock market.
Now, just remember, this is a woman that Trump decided not to reappoint.
She may not be entirely objective.
And she said... Current value of the stock market.
Well, I don't want to say too high, but I do want to say high.
Price-earnings ratios are near the high end of their historical ranges.
If you look at commercial real estate prices, they are quite high relative to rents.
Now, is that a bubble?
Or is too high?
And there, it's very hard to tell, but it is a source of some concern that asset valuations are so high.
Now, if you are a political bureaucrat with the kind of powers that Satan himself with envy, if you're kicked out, you might want to trigger a slide.
It's just possible. Can't read the woman's mind.
It's just potentially possible that this may be the case.
Well, we'll see.
We'll see. We'll see. As new Federal Reserve Chair Jerome Powell was sworn in on Monday, February 5, 2018, the Dow Jones Industrial Average fell by almost 1,600, about 6%, before recovering, with a total decline of 1,179 points by the end of the day.
All major indices fell losses.
The Nasdaq Composite fell by 3.8%, S&P 500 by 4%, and the broad Russell 2000 dropped by 2.9%.
The SIBO volatility index more than doubled to its highest level in two and a half years.
Federal Reserve Chair Jerome Powell reached deep into his bag of nondescript Hallmark cliches and said, my colleagues and I will remain vigilant and we are prepared to respond to evolving risks.
We will also work hard to make sure that our regulation and supervision are efficient as well as effective.
Jerome, any content?
Anything? No, no, just, you know, here you can take these adjectives to the bank and go get a glass of water.
Now, Data showing that the average wage has increased 2.9% in the U.S. over the last year.
That's the largest gain since June 2009.
Also influenced the markets. And in general, U.S. companies have spent over $4 trillion buying back their own shares over the last little while.
Now that corporate tax rates have been cut so enormously, corporations can actually start investing in paying workers more.
They can start investing in new plants.
They can upgrade their machinery to chase the holy grail of the modern economy, which is worker productivity.
Without that, Everything else is garbage.
So the fact that money is moving out of abstract financial instruments such as stocks, shares, bonds, and so on, and into actual Tangible worker wages and plant and productivity improvements means that the money is going from, I don't know, to some degree, excess crap to useful stuff.
The money is not necessarily being destroyed.
So the fact that companies are expanding and paying their employees more rather than just buying back their own shares, well, that has a lot to do with it as well, which is one reason why some corporations, certainly the investors in those corporations, were not big fans of tax cuts.
The uncertainty over future monetary policy decisions by incoming Federal Reserve decision makers, three vacancies at the Fed have yet to be filled by President Trump's administration, and Janet Yellen's outgoing commentary unquestionably influenced the recent market drop, but the full story is far more complicated.
And, you know, there's this funny phrase, voodoo economics.
Like, these days, all economics is voodoo economics.
Because back in the past, Superstitious mystics believed that praying to the will of the gods or the women of the gods determined the nature of the physical universe.
And now we are dependent not upon the free choices of free actors in a free market.
We are dependent upon the whims of bureaucrats, often motivated by political concerns, vanity concerns, petty concerns, and so on.
And so we're reading tea leaves of unaccountable bureaucrats rather than dealing with a free market.
And so all economics is guessing the women will of the gods, and it's no more science than praying to the monkey god was.
To understand the current situation, you've got to understand the nature of the Federal Reserve itself and the specific decisions that were made during the last financial recession, namely quantitative easing.
Not a bad name for a laxative, an even worse name, to cover up money printing.
So the federal funds rate is the key interest rate at which banks trade federal funds.
Federal funds are balances held at various Federal Reserve banks.
So when people talk about the Federal Reserve changing the interest rate, the federal funds rate is what is being discussed.
Following the economic downturn at the start of the century, the Federal Reserve cut interest rates to the lowest in multiple decades, further cutting them to historic lows in 2008 and beyond.
Now, when you cut interest rates, you stimulate economic activity in the here and now.
And that's good for politicians and it's bad for, I don't know, future consumers, your children, the survival of civilization itself.
Because when you stimulate a lot of economic activity in the here and now, a lot of resources get wasted.
People don't want to put their money in the bank because the bank's not paying any interest and there's still inflation.
So it's great for politicians because when money's moving in the economy, they can tax it pretty easily.
When it's saved, it's more difficult to tax, of course, in the here and now.
So, the effective federal funds rate.
This is a, zoom out, baby, 1954 to 2018.
So you can see 1954, post-war period, baby boom, and so on.
It's cooking around, you know, 1% to 4% and so on.
And in the 80s, man, I had a...
I had a friend who was paying 26% on his mortgage.
Holy, deliver bits of your kidney every week to the bank.
And now you can see it kind of goes down and down and down.
And the big spike in 72, of course, last thread to the gold reserve of the gold standard were destroyed in 1971.
And you can see here 2008, bottom right, flat lines.
Flat lines.
Now it's kind of edging up just...
A little bit.
And this is all statist manipulation of what are the most essential price signals that the free market requires, which is interest rates.
So interest rates are so important because if people are saving a lot, If people are saving a lot because interest rates are high, then interest rates will go down because there's an excess of money available to lend out.
And when there's an excess of the supply, the price of it will go down.
So interest rates go down, which stimulates people to spend more in the here and now.
And governments love this, of course.
I mean, central banks allow them to create money out of thin air.
Type what you want into your own bank account, and that allows them to buy votes by drugging Existing voters with the illusion of free stuff while future generations end up in manacles owned by foreign bankers.
So politicians love it.
The financial class loves it because most people don't know what the hell's going on and can blame the free market.
You always have this wonderful scapegoat.
You know, the free market, the market is the problem.
The free market relies on debt, which is complete nonsense.
The governments rely on debt because they can bribe voters in the here and now.
And pass the bill along to future generations long after the existing politicians are out of office.
And it's sort of like how many people would quit smoking if space aliens in another galaxy might potentially get the lung cancer.
Well, it's tragic, but true.
So Federal Reserve manipulation.
So this is major stock indices versus Federal Reserve interest rates.
So we've got yellow here is the Dow, the pink is the S&P 500, the green, NASDAQ composite, and the red, appropriate enough, commie, effective federal funds rate.
It's communism in terms of currency, right?
Control of the means of production by the government is the definition of communism in many ways.
And so when the government controls the money supply, when government controls interest rates to a large degree, when government controls currency, then you have a fundamentally communist system.
There may be vestiges of the free market like Lenin's new economic policy style vestiges, but there's no free market.
If there's no free market in money, there's no free market.
And money has been...
Moved to a communist system, and therefore the rest of the free market is being dragged in that way.
It's like a man standing on a blanket over a hole.
Man goes down, the blanket goes following in, and that's what happens.
This is why the West is becoming more and more socialist, more and more communist, because governments control the money supply, and it's the one thing that's in common with almost every economic transaction.
So the Federal Reserve dropped the rate, right, the interest rate, to near zero in late 2008, early 2009, which created this artificially cheap money, which created the illusion of growth and recovery, right?
So this is really, really important.
You got a toothache, you can either go to the dentist and suffer the pain and get your toothache dealt with, or you can take...
Morphine and cocaine. Now, if you take morphine and cocaine, you've just saved yourself a trip to the dentist, at least for now.
You feel a lot better. Things seem to be going along.
Hunky-dory, tickety-boo.
But, of course, the rot is spreading deeper and deeper because all you've done is mask the symptoms rather than deal with the actual source of the problem.
And what is it? 1913?
A little over 100 years since communist ideologies took over the money supply in the West.
And as you can see, it is just a slow march to collectivization.
So this is kind of important.
As the federal funds rate crashed, economic growth...
Kind of seemed to be happening.
But there's growth like you're getting taller in the teenage years, and then there's growth like a huge freaking tumor in your testicles.
Quantitative easing.
QE, right? This stands for quantitative easing.
QE1, QE2, QE3. Always reminds me of ocean liners, which reminds me of the Titanic, which reminds me of quantitative easing.
So these are different periods in which the U.S. Federal Reserve engaged in the practice of buying assets with newly created money.
That is some nasty, nasty stuff.
So the Fed is not supposed to be out there buying stuff in the stock market and so on because that would be picking favorites.
But you see, they can do a whole bunch of other slightly less direct stuff to prop up stock values and so on.
Which is choosing favorites in the economy, which bureaucrats will never ever be able to do with either any knowledge or without massive amounts of corruption.
The US Federal Reserve held between $700 billion and $800 billion of Treasury notes on its balance sheet before the recession.
See, that's... That's kind of cool.
Because, you see, you can issue a treasury note, which is lending money to the U.S. government.
You can issue the treasury note, and then the U.S. government can buy it up.
So the U.S. government can create money and buy its own debt instruments.
And I guess it's like masturbation trying to create the next generation.
Not really going to work.
In late November 2008, QE1, quantitative easing 1, began and the Federal Reserve started buying $600 billion in mortgage-backed securities.
So very briefly, the government mandated banks to lend to unqualified minorities to buy houses.
And this is basically, you know, nice bank you got there.
Be a shame if something happened to it.
Now go lend to people who are going to vote Democrat.
And so, yeah, a bunch of minorities, particularly blacks and Hispanics, who were unqualified for loans, were given loans by banks because of massive government pressure.
And this, of course, boosted up home ownership, created a bubble in home ownership.
And then there was, of course, the crash.
Massive amounts of environmental damage, 10% of U.S. housing stock lying vacant.
Housing prices crashed at 40% or 50% or more.
And then, of course, the government didn't want to admit that it made a massive mistake by forcing banks to lend to unqualified minorities, and therefore it began propping up the value of the banks by buying their mortgage-backed securities.
See, mortgage-backed securities, when mortgages are going tits-up, It's sort of like, why is food in India so spicy?
Because it's really hot in India, and food goes back pretty quickly when there's no fridge.
And so if you've got your slightly furry mystery meat, you bake it in with a whole bunch of spices, and then hopefully, cross your fingers, people are going to survive.
And so when you bundle up your mortgages, it's because you want to hide just how toxic they are, in the same way you'll put a lot of spice on bad meat.
By March 2009, the Fed held $1.75 trillion of bank debt.
Now that is really an astounding growth, right?
$700 to $800 billion in November 2008.
March 2009, a couple of months later, it's doubled or more.
The amount reached $2.1 trillion mortgage-backed securities and treasury notes in June 2010.
Purchases were temporarily halted but resumed in August 2010 as the economy did not show signs of recovery.
So it's kind of like the cocaine addict who says, that's it, I'm quitting!
Oh my God, I feel terrible.
Okay, I'm starting again, right?
So they keep trying to get off this drug, but the drug has, of course, shifted the economy.
It's created pressure groups, interest groups, consumer groups, you name it.
And, well, what is the government other than pretending necessary pain doesn't need to occur?
So after this halt in June 2010, holdings started falling as the debt matured, right?
So the bonds matured.
The Fed's revised goal began to keep holdings at $2.054 trillion.
Because, you know, more than that would be completely irresponsible.
To maintain that level, the Fed bought $30 billion in 2-10-year Treasury notes every single month.
Wow. So the quantitative easing, basically, right?
It's... It's just buying bad investments at prices that nobody else will pay to prop them up and provide the illusion of value.
So all of the financial companies, banks and others, who were going to take a bath on these mortgages that were crashing as the result of political correctness...
It's truly horrifying in the amount of economic, personal, environmental destruction that occurs.
Think of all of the amount of trees that were cut down and forests that were raised and energy that was consumed to build houses that people couldn't afford.
I mean, unbelievably horrifying.
Think of all of the infrastructure improvements.
That could have occurred based upon that.
And so it's like thinking you're an artist because your mom buys your art.
And it's just horrifying.
It's all made up stuff. Like the modern economy is the matrix and the Fed is the master robot.
November 2010, the Fed announced the second round of quantitative easing QE2. With plans to buy $600 billion worth of Treasury securities by the end of the second quarter of 2011.
Now this, of course, is propping up the value of Treasury securities.
Because the price, like the interest that people will pay, or the interest that you have to offer people in order to get your securities, is higher if they think that there's any risk involved.
So if they think for some reason, like look at what happened to Greece.
When people thought Greece...
If it couldn't pay, maybe, its bonds, then the bond prices went up enormously.
Like the interest rate that the Greek government had to offer people to compensate for the risk.
And so the more people are snapping up your stuff, the lower your interest rates can be.
And so the fact that the government is buying its own treasury securities drives down the interest that they have to pay in the future.
It's a massive self-funding scam and scheme.
It's just horrifying. A third round of quantitative easing, QE3, because they learn well, was announced on September 13, 2015.
Federal Reserve decided to launch a new $40 billion a month open-ended bond purchasing program of agency mortgage-backed securities.
These are bundles of mortgages that are packaged together under the umbrella of one financial instrument and sold like a bond.
So what is this? It's a stimulus program that allowed the Federal Reserve to relieve $40 billion per month of commercial housing market debt risk.
And to some degree, I mean, I feel the banks.
I feel the banks with fur gloves at a great distance with oil.
And the reason for that is the banks could kind of run to the government and say, well, you forced us to lend to unqualified people because of political correctness and the garnering of votes on the left, and so we're going to blow the lid on this whole corrupt scheme and we're going to put the blame where it lies, which is not in the free market, not even fundamentally in the banks, but in the politically correct agenda for the government to meet diversity quotas of home ownership.
And they were like, well, don't do that!
Because then people might actually have some idea where the housing crisis and the general crash that wiped out up to 40% of America's wealth came from.
So I tell you what, if you shut up about the diversity program of mortgage lending, we'll buy up a whole bunch of your toxic mortgages and prop up the value of your bank.
Well, they are responsible to shareholders, not to morality.
It was also announced that the federal funds rate would be held near zero, at least through 2015.
Boy, that's good news to have, I suppose, because the vagaries of the free market can be challenging and complicated.
On December 12, 2012...
An increase in the amount of open-ended purchases from 40 billion to 85 billion dollars per month was announced.
Now, you may say to yourself, they don't have a freaking clue what they're doing.
We're going to raise the rate. We're going to lower the rate.
We only need 40 million. We need 85 million.
We're going to stop this program. We're going to start it again.
We're going to jack it up. We're going to pull it back.
They don't have a clue what they're doing.
They're just trying to win in the moment.
That's the definition of collectivism and leftism and so on, as I talked about recently.
They're just trying to get through this particular moment with a vague sense of credibility.
But there's no big plan.
They don't know what the hell they're doing because you can't run an economy.
It's just a fundamental madness.
You cannot run an economy.
Imagine being a matchmaker and saying, well, I know.
There's a couple hundred million people in this country.
I know who everyone should marry, and I know when they should get married, and I know when they should have children, and I know what jobs they should have.
I mean, you couldn't do it. You don't have enough information.
It's the same thing with the economy.
The only information...
That's valid is free transactions in a free market, right?
Price tells you what is necessary, what is needed.
Price has a massive amount of information.
And the moment you start messing around with price, particularly the price of money, which is interest, you throw a wrench in the whole system and the rest of it is just damage control and a random profiteering.
June 19th, 2013, Ben Bernanke announced a tapering It's like a tapering of some of the Federal Reserve's QE policies, specifically noting that the Fed may reduce its bond purchases from $85 billion to $65 billion a month, up and down like the Assyrian Empire.
Bernanke did not announce an interest rate hike, but suggested a rate increase would likely occur if inflation followed a 2% target rate and unemployment decreased to 6.5%.
And all of this, my friends, is what they call a free market.
Following the comments, the stock markets dropped by 4.3% over the next three trading days, with the Dow Jones dropping 659 points between June 19th to 24th, 2013.
And this is how you know that stock markets are facing the Fed, not necessarily the economy as a whole.
It's become a form of giant corporate welfare Rotating carousel favoritism with the moneyed classes and it doesn't have much to do anymore with serving the actual needs of consumers and workers and employers and so on.
They're like priests kneeling before the omnipotent money gods hoping for a few favors to fall their way.
September 18th, 2013.
The Fed decided to hold off on scaling back its bond-buying program, but began tapering purchases in February of 2014.
So, blind Uber cocaine driver hits another lamppost.
They don't know what they're doing. This is all within a couple of months?
Oh, we're going to reduce them maybe.
Okay, from 85 to 60.
Before it was at 40, 40 odd.
Now we're going to go up to 85.
We're going to go down to 65.
Maybe we'll drop it.
Nope, we're going to hold off and scaling it back.
Okay, then in a couple, like, they don't know.
They don't know. This price situation highlights how reactive markets are to changes in Federal Reserve policy, putting the Monday, February 5th, 2018 declines in context.
On February 3, 2014, Janet Yellen was sworn in as the chair of the United States Federal Reserve.
QE3 asset purchases were halted on October 19, 2014, as the Federal Reserve had amassed over $4.5 trillion in assets.
Yeah. That's a lot.
It's almost like a third of the entire U.S. GDP. So, that's a lot.
They're going to show up, I think, on the show Hoarders.
Except it's your future they have in the basement.
The Dow Jones Industrial Average fell by 5% at this point as the market contemplated existence without quantitative easing.
No cocaine for you!
Oh, I'm so depressed.
In the midst of this panic, St.
Louis Fed President James Bullard eased tensions by reassuring the market that QE4 would occur if the economy did indeed need a fresh dose of stimulus.
It's not funny, but it's better than a laugh, as the other presentation is.
Ah, not the same.
By the end of the year, the Dow Jones Industrial Average had rallied by 10%.
No cocaine for you!
I'm going to go and jump off a bridge.
Okay, a little bit of cocaine for you.
If you get to the bridge, we'll give you cocaine.
Okay, I'll take the cocaine.
Again, I'm not going to the bridge.
Management.
Under Janet Yellen's tenure at the Federal Reserve, five-quarter point interest rate hikes were approved, and the Federal Reserve began a program to decrease its assets gradually, very, very gradually.
See, you go into the European Union very quickly.
Getting out of the European Union, well, that's like breaking out of the mafia.
You just can't do it. It's kind of a roach motel.
It's a one-way thing. It's kind of like when you go...
To rent a car, you drive in, and you drive over those spikes on the ground, but you can't get the car out.
You're stuck in. So, yeah, you buy up assets like crazy, but when it comes time to sell them, so you're buying assets drives the price up, which is very, very favorable to the economic classes, the financial wizardry classes, but when you sell the assets, those go down.
So it's got to be very, very slow, you see.
So this is U.S. Treasury and mortgage-backed securities held by the Federal Reserve in billions.
So, sorry, it shouldn't last.
Mortgage-backed securities, see?
Zero! So 2003, this is 2003 to 2018.
Nice decade and a half.
And QE1 begins.
They're just buying this stuff like crazy.
And they tried unloading a little bit of them.
Didn't really work out that well.
They just start buying them up again.
And it's, well, it's an insane and ridiculous amount.
This is why the housing crisis wasn't solved, you understand?
The housing crash was not solved.
This is the morphine and the cocaine for the toothache.
All they've done is stepped in and used money created out of thin air to pretend that somebody finds this crap valuable.
That's all it is. It's all it is.
Like your mom bitten up your artwork and your uncle on the other side.
And even if we look at U.S. Treasury securities, you know, five, six hundred billion back in 2003, and now, I mean, good Lord, 2.5 trillion.
And this tells you, this tells you, like, if you flip these graphs...
This is most likely the actual outcome in terms of value, just like these values going up because artificially bought.
If you flip these graphs, this is probably what the value would have done.
Like it would be going down from the x-axis rather than up.
And the whole point of this is to prevent that from happening because that would be a dose of economic reality that might benefit Main Street in the long run and not Wall Street in the short run.
Federal Reserve, total assets in trillions of dollars, 2007 to 2018.
So 2007, less than a trillion.
Now, since 2014, has been floating around 4.5 trillion dollars.
And it's tough to see that line going down.
Like, that would be like the worst sled hill in the known universe.
To bargain, for those not in the sled vernacular.
So, 2016, they said, well, you know, we better start selling some of our assets.
That's a very, very gradual. It currently holds $4.4 trillion in assets, down from $4.5 trillion in 2016.
Right? So again, this is propping up prices.
And this is government programs, right?
The government program is perpetual.
It's permanently sticky. I mean, like in Canada, there's this little thing called the income tax.
The income tax was a temporary measure brought in during the First World War just to pay for the war, you see?
It's just a very, very temporary measure.
Very temporary. You know, it's like you got the shiftless, loser, lazy brother-in-law.
He's like, man, I just need to crash in your basement a couple of days, max, a couple of days.
It's all I need. He's going to retire there.
He's just going to retire there.
That's the way it works. So Dow Jones and Fed assets.
This Federal Reserve total assets and Dow Jones Industrial Average Index.
And you can see here that Dow Jones was going down.
Going down. And QE1 kicks in in 2008.
And it takes a little while, right?
And then Dow Jones begins to kick up.
Now, they keep trying to...
They've got this whole thing where the QE2, QE3 goes on, and the Dow Jones is going up.
Massive amounts of money created at nothing, pouring into the entire system.
Government buying up toxic crap, securities and financial instruments, and buying its own...
Treasuries and so on, it's all artificial.
The money is coming out of nowhere and it's propping up prices.
And of course, not one person in a thousand.
Now you're one of them! Lucky you.
You get to be great to sit next to it at a dinner party.
This is what is going on.
And so the degree to which, and I've talked about the fragility of the stock market increase over the last while, although I will say this, it's kind of funny to watch the leftists do this massive pivot, which is stock market's going up like crazy.
Obama's totally responsible for that.
Stock market takes a dip.
Oh, that's all Donald Trump. All Donald Trump.
It's like, oh man, you guys are just terrible.
And so this yellow line, the Dow Jones, how much of that is real worker productivity gains?
How much of that is rational investments in increased output?
Well, you'll never know for sure, but it's a lot less than the graph.
It's a lot less than the graph.
So let's jawbone a little.
I want to put some of all of this in perspective.
If you want to know more about the history of the Fed, I've got interviews with G.I. Pitt Griffin and Mike Maloney and others and so on.
This is a debt-based system.
People are aware of it. It's nothing to do with the free market.
Please understand that. It has nothing to do with the free market.
I mean, if somebody said to you, my business plan is to lend over $30,000 to random people across the world, would you say that's a great business plan?
You'd say no. Global debt, just Q3 2017, right?
Just a couple of months ago, global debt with $233 trillion.
Global debt was $233 trillion.
And this is more than $16 trillion higher than the end of 2016.
Now the global population, about 7.6 billion, so the per capita debt is over $30,000.
Pro tip, not many people in the world have $30,000, so it seems to be it's mostly you and me and the guy sitting next to you.
So that is the reality.
Now, why this debt-based system is so brutal is the debt-based system has fueled explosive population growth across the world.
I need you to really understand this because the real crash is not money.
The real crash is population. So, borrowing and printing and creating money out of thin air has created the illusion of prosperity.
Now, if your 401k goes down, your retirement savings go down, your Bitcoin goes down, you're probably still going to survive, right?
I mean, the prices of all of these things are kind of made up.
Like people say, oh, Bitcoin is down and it's lost so much of its market value.
It doesn't really mean anything.
You could never have sold all the Bitcoins in the world at 25,000 a head anyway.
You couldn't have because none of them would be worth all of that.
It's all made up. It doesn't matter.
It's all theoretical till you sell it.
Right? You find out if the girl will go out with you after you ask her out.
Theoretically, I could go out with all the women in the universe.
So here's the problem is the global population has grown on a debt-based system.
And what happens when that system crashes?
What happens is massive reductions in human life.
It's horrible and it's horrifying.
This is the agony.
I hate that the world is going to have to go through this, but this is the agony the world is going to have to go through in order to throw off communist control over the means of production, which is the fundamental means of production, which is money.
Letting the government control currency Is giving the psychopath the only gun in town.
I mean, this is just the way it works.
And the population growth has been explosive.
It's based on money printing.
It's based on debt. And it's hollowed out.
It's hollowed out. The house is built not even on sand, on a canyon and tissue paper.
Not on rock. And the population growth that the world has experienced as a result of a debt-based predatory central banking monetary system, communist monetary system, Well, the debt is up, the population is up, the debt crashes, the population is gonna crash.
I mean, I wish it were some other way, but for those of us who have been arguing against this horrible system for decades, it's not on me.
It's not on me. And if you've been arguing against this horrible system for years or now, or if you're willing to do it from now on, then it's not on you.
It's all the people who've rejected those arguments.
It's gonna be on you, and it's gonna be absolutely horrible.
Now, right now, there are tax cuts.
Now, tax cuts, of course, move money to some degree from Wall Street to Main Street.
And unless the spending is lowered, the debt is going to go up, right?
Reagan did the same thing, right?
He cut taxes and federal spending went up by two-thirds under his tenure.
Now, people may get mad at Trump for not cutting taxes, sorry, for not cutting spending, but the reality is that massive amounts, if not most, of U.S. spending is out of control of Congress.
It's mandated spending and to try and change that is functionally impossible.
And so there are no breaks on this particular debt train.
Now, Trump does want to spend a lot of money, no question.
He wants to spend money on the military, on veterans.
He wants to spend a lot of money on infrastructure.
Infrastructure, of course, is related to borders because if the 20 to 30 million U.S. illegal immigrants weren't in the country, illegal aliens weren't in the country, then you wouldn't need nearly as much infrastructure spending because they're using and wearing down that infrastructure while paying relatively little in taxes.
So infrastructure payments is another form of income transfer from citizens to immigrants.
Illegal aliens because you wouldn't need to spend as much on infrastructure if it wasn't being worn down by the aliens.
There is a battle at the moment between the financial classes and the productive classes.
The amount of money that is stuffed into, I called it, this is like True News 2 or something like that many, many years ago, I called it the supercharged stock market.
And that means that so much money is herded into the stock market because it's being chased by the baying hounds of the tax department and the only place it can find security and safety is behind the fence of the stock market.
So much money is being poured into the stock market with people who don't know what they're doing, don't want to be there, but are just trying to get away.
You know, why are you jumping into the wolf pen?
Well, because the tiger is chasing me and at least I have a chance.
Why are you jumping out of the airplane?
Well, because it's going into the side of the mountain and at least I have a chance.
And the supercharged stock market has really messed up a huge amount of economic calculations.
Now you have CEOs chasing stock prices rather than long-term sustainable productivity.
And the amount of money that the government is herding into the stock market has created an entire class of monopoly monocle-wearing welfare whores who are feeding at the massive trough of free money created by the government at the expense of the poor, right?
Especially inflation, which is the inflation of the money supply.
Only results in the inflation of prices hits the poor hardest.
And so the massive capitalist classes with their pig noses in the trough of the futures of the poor are created by the centralized planned, which is to say no plan economic system.
And it's very tough to change because the money classes, the financial classes, they control the media, they control politicians, they control think tanks, they control academia a lot of the times.
So it's tough to get the information out.
Hopefully you'll share this. Now, with regards to the U.S., I mean, things are completely mental.
U.S. national debt is over $20,495,000,000,000.
And even back a couple of years ago, 2015, the U.S. had debt and unfunded liabilities, right?
The promises the government made that it doesn't have enough money to pay for, $1.7 million per taxpayer.
$1.7 million per taxpayer?
I don't know about you. I don't have that under the couch.
And... Greece was bankrupt.
Greece was in total disarray and it was toast.
The debt in the bankrupt Greek state was $65,000 per taxpayer, $1.7 million per taxpayer in the US. Federal government is on track to borrow an estimated trillion dollars in the current fiscal year.
That's 84% up year over year, and it's the highest level of borrowing in the last six years.
The United States, of course, is going to reach the debt ceiling within a couple of weeks.
Legislation is going to be required to continue the borrowing.
This is in addition to the impending temporary spending legislation that is required to prevent another government shutdown.
Because, you know, when the government shuts down...
You know, if the government shuts down...
It means that it becomes even tougher for the FBI and the DOJ to cook up falsehoods to get FISA requests.
It's tougher for people to get audited.
It's tougher for, you know, more promises to be made to union workers which can't be paid for.
It's really, really tough for the government to do all the wonderful and good work it does when it's shut down.
November 2017, U.S. household debt reached a record high of $13 trillion, including $8.7 trillion in mortgage debt, $1.36 trillion in student loan debt, and $1.2 trillion in auto loan debt.
Americans owe an estimated $3.8 trillion in consumer debt, including an all-time high of $1 trillion in revolving debt, credit card debt.
And this It's where the important stuff is.
Now, the fact that right after the Democrats got cornered with the release of the FISA memo, right, the memo about how the DOJ and FBI lied to the FISA court in order to get a warrant to spy upon the Trump administration Campaign members of the Trump campaign, which is not just their current cause.
They can go all the way back, everything that may have been trapped or recorded in the databases throughout the United States back many, many years.
So right after, right after the Dems get cornered in this massive malfeasance, oh, look, there's a massive stock market crash.
Well, I guess it beats a false flag attack of some kind.
I suppose that's slightly better.
But this is the reality of where the system is.
Now, the fact that there's all the student debt is horrifying and horrible, and, you know, people always say, well, where should you go to college?
The real question is, why the hell should you go to college?
To get programmed in hatred of the remnants of your freedoms in exchange for debt enslavement to infinity that can't even be discharged through bankruptcy does not seem like a very good deal for me.
Also, if you're a man, you can live with false rape accusations from here to eternity.
So, This is the reality.
And of course we have a media and we have an academic class and we have a chattering intellectual class that is really concerned with nonsense trivia.
Nonsense trivia. Oh, we've got to worry about whether Doritos is negative towards women because they're too crunchy.
And all of this garbage that floats around about privilege this and intersectionality that and gender the other.
I mean, compared to what is actually going on, the hole that is opening up between Western civilization.
All of that other stuff is nonsense.
So be alert.
Be prepared. Don't panic.
Know what is going on.
And know that the solution is very clear.
The solution is always more freedom.
The solution is always less coercion.
The fact that the government has created a fiery, alligator-filled, asshole moat around the greatest treasure of the free market, which is control of the currency, is all you need to know.
