When we understand how the global monetary and banking system operates, we realize that what people focus upon, i.e. reserves, are not producing the results claimed. In fact, it is grossly misleading.
In this video I discuss how the USD along with collateral shortage is placing us in an environment of deflationary money. This is going to have huge economic impacts (I predict in the second half of the year). This is not surprising since a lack of money equates to economic contraction.
▶️ 3Speak
The banks are the main issue in this problem and I just don't see them taking that many bad loans unless the government backs up all the loans. They are generally not in the business of losing money
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Banks arent about to lend with economic headwinds. It is not in their best interest.
Thus, the solution will be more fiscal spending by the government, which doesnt add any more USD to the system, just shuffles it around.
We really need cryptocurrency to kick off to a much greater degree.
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a stronger economic contraction for the second half of the year 2022 so take measures to avoid losing more power
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BEER.Summary:
In this video, the speaker discusses the concept of money elasticity and how the current financial system operates in a deflationary manner. They explain how money is created by the commercial banking system through fractional reserve lending, highlighting the role of treasuries and collateralization. The speaker points out the shortage of both US dollars and collateral globally, leading to slower economic growth rates, market bubbles, and inflation. They discuss the impact of a lack of money on industries like oil and emphasize that the lack of collateral is causing havoc in the global economy. The speaker expresses concerns about the potential economic collapse due to deflationary money and critiques the effectiveness of fiscal stimulus in addressing these issues.
Detailed Article:
The speaker delves into the intricacies of the current financial system, shedding light on the process of money creation through fractional reserve lending. They clarify that it is not the Federal Reserve but commercial banks that are responsible for bringing US dollars, euros, pounds, and yen into circulation. Emphasizing the importance of collateralization, the speaker points out a significant shortage of collateral since the great financial crisis, which has a global impact.
The discussion moves towards the repercussions of this shortage, notably a global scarcity of US dollars due to reduced lending by banks and the accumulation of dollars within the US domestic banking and financial systems. The speaker connects this shortage to slower economic growth rates, market bubbles, and price increases often misattributed to monetary policy. They highlight how a lack of investment, such as in the oil industry, is a manifestation of the scarcity of money in the system.
The speaker paints a concerning picture of the global economy, pointing out the trend of slowing growth rates and the failure of productivity to keep up with long-term trends. They identify setbacks like the great financial crisis and the recent COVID-19 pandemic as events that have exacerbated these issues. Despite significant fiscal stimulus efforts, the speaker argues that merely moving money around through fiscal means is not a sustainable solution to the underlying problem of deflationary money.
The video concludes with a cautionary note about the potential for a massive economic collapse due to the prevailing financial conditions. The speaker critiques the efficacy of fiscal stimulus in addressing the root causes of the crisis and raises concerns about the long-term implications of short-lived solutions like stimulus checks. Overall, the speaker's analysis provides a thought-provoking insight into the complexities of the current financial system and the challenges posed by deflationary money.