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The current economic system is out of whack. The Federal
Posted on: April 12, 2024 at 18:32:17 CT
JeffB MU
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Reserve is the Wizard of Oz behind the curtain pulling the levers and keeping the illusion that the economy is healthy alive and well. They can rapidly pull those levers to change the direction of the economy, which can hide a lot of problems temporarily, and pull the economy from the brink.
But if you will allow me to switch metaphors, it is much like a doctor, or a drug addict, switching medicines and dosages to treat symptoms on an ill patient. It can make things better for a while, but if it is not fixing the underlying problem that is causing the symptoms it is just masking the problem, not curing it. In fact, it may often make things worse in the long run.
Sure, that doctor could get that patient up out of his sick bed with some amphetamines or cocaine and have him look healthy and give a nice speech, but the appearance of being healthy is not the same thing as actually being healthy.
Look at what the Fed has done to the money supply to keep us out of a recession:
https://fred.stlouisfed.org/series/WM1NS
It looks a lot worse if you see the data all the way back, but they discontinued showing that data, of course.
Our federal debt to GDP ratio has grown from 53% of GDP in 1960 to 122.2% this year. https://www.usdebtclock.org/#
- and that doesn't count "unfunded liabilities" like Social Security, Medicare, etc.
and our deficits are crazy out of whack... currently more than $1.8 Trillion and we're still in the first half of April.
There is no possible way that we could balance the budget without crashing the economy into a depression worse than the Great Depression. There would be rioting everywhere. We are essentially bankrupt and the only thing keeping us afloat is that the US dollar is currently the world's reserve currency. But that saving grace could well change in a hurry.
The BRICS nations have been moving towards setting up their own currency system, and it has been growing in size and is becoming more enticing to other nations as the US tries to inflate its way out of its untenable debt situation.
Doctors can help hide a sick patient's condition for a while, but not forever, particularly when the underlying condition has been getting worse for years and the patient has not the means nor the will to change the behavior that got him into this predicament.
It is notoriously difficult to predict the timing of economic collapses of countries in bubble conditions, but the end result is pretty predictable... but even there giving the patient massive doses can make things look a little less dire than they are for a while... but not forever.
But if you will allow me to switch metaphors, it is much like a doctor, or a drug addict, switching medicines and dosages to treat symptoms on an ill patient. It can make things better for a while, but if it is not fixing the underlying problem that is causing the symptoms it is just masking the problem, not curing it. In fact, it may often make things worse in the long run.
Sure, that doctor could get that patient up out of his sick bed with some amphetamines or cocaine and have him look healthy and give a nice speech, but the appearance of being healthy is not the same thing as actually being healthy.
Look at what the Fed has done to the money supply to keep us out of a recession:
https://fred.stlouisfed.org/series/WM1NS
It looks a lot worse if you see the data all the way back, but they discontinued showing that data, of course.
Our federal debt to GDP ratio has grown from 53% of GDP in 1960 to 122.2% this year. https://www.usdebtclock.org/#
- and that doesn't count "unfunded liabilities" like Social Security, Medicare, etc.
and our deficits are crazy out of whack... currently more than $1.8 Trillion and we're still in the first half of April.
There is no possible way that we could balance the budget without crashing the economy into a depression worse than the Great Depression. There would be rioting everywhere. We are essentially bankrupt and the only thing keeping us afloat is that the US dollar is currently the world's reserve currency. But that saving grace could well change in a hurry.
The BRICS nations have been moving towards setting up their own currency system, and it has been growing in size and is becoming more enticing to other nations as the US tries to inflate its way out of its untenable debt situation.
Doctors can help hide a sick patient's condition for a while, but not forever, particularly when the underlying condition has been getting worse for years and the patient has not the means nor the will to change the behavior that got him into this predicament.
It is notoriously difficult to predict the timing of economic collapses of countries in bubble conditions, but the end result is pretty predictable... but even there giving the patient massive doses can make things look a little less dire than they are for a while... but not forever.
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The current economic system is out of whack. The Federal - JeffB MU - 4/12 18:32:17