Bob Chapman: Purge of the System Inevitable
The International Forecaster Bob Chapman asks How will the U.S. Service Its Debt?
Even with taxpayer assistance the private sector cannot recover. It has been just 2-1/2 years since these problems began and Wall Street and banking are right back doing what they did before, wildly speculating. How can the taxpayer continue to fund such insanity? Remember, zero interest rates have nowhere to go but upward. Adding more to the soup 40 states are essentially broke. Do you really think the crisis is over with 22.5% unemployment? We do not think so. There is no easy exit short of a purge of the system, which is inevitable. Any kind of stringent financial reform will bring the system down. Aggressive bank lending would bring about more monetization and more inflation. The markets believe it is back to business as usual. The only events that can bring us back to reality is a purging of the system and the end of Wall Street and the banking control of our country. The revolving door between Washington and NYC has to be dismantled. The credit system is broken and has to be changed and fixed. The shift has begun. The reign of Goldman Sachs over our government is in the process of ending. The successor will be JP Morgan Chase, which has been and will be every bit as bad as Goldman as been. The control is going to change but not the looting of the American people. The changes wonâ€™t come and the system will collapse, that is how the elitists retain control over our country. The final war for our freedom is underway.
At this point, we are stuck between a rock and a hard place. TheÂ financial and economic systems are going down. Regardless of what we do now, the system will be purged, one way or another.
The powers that be have two choices:
1) Stop all stimulus and bailouts, raise interest rates, and let the system collapse in a deflationary spiral that will further destroy home values and other assets as the natural cycle of deleveraging and contraction plays out
2) Continue pumping unlimited dollars into the system, eventually leading to insolvency of the United States of America and a hyperinflationary collapse.
It’s not a pretty picture, but that is pretty much where we stand now. If I had my choice, I’d prefer a stop to all stimulus, bailouts and money printing, and let the system contract right here and now. We will experience a serious depression for many years as millions will lose their jobs, retirement funds, and value in any assets they hold.
The alternative, however, is a lot worse, as was described in Hyperinflationary Depression – No Way of Avoiding Financial Armageddon. In a hyperinflationary collapse, we can expect a total collapse in the purchasing power of the US dollar, a halt in the normal stream of economic activity, destruction of the US financial system, and realignment of the US political system as we know it.
Which would you prefer?
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Date: February 9th, 2010
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