Special Guest: Richard Duncan
41 Minutes, 37 Slides
Since 1968 Money has become irrelevant. Forget M1,M2, M3 MZM etc. What matters now is CREDIT. We are in an uncharted era of Creditism.
- Under Capitalism, the economic growth dynamic was driven by Investment and Savings.
- Under Creditism, it is driven by Credit Creation and Consumption.
- Creditism has created unprecedented prosperity around the world, but...
- It's on the verge of collapse because the private sector cannot bear any more debt.
The Austrian economists believed that economic cycles are driven by credit expansion; and that economic booms end in depressions when the credit ceases to expand.
They were right!
With the clear thinking of a trained lawyer, Michael Snyder in four articles in Part I points out the startling realities of what is shaping our world. In Part II Michael ties these together with his views and interpretations. His conclusions fit very well within the Globalization Trap Model developed by GordonTLong.com.
Policy Responses: Designed to Prevent Total Credit Frfom Contracting
- Because if credit contracts significantly, there will be a Depression.
- Milton Friedman taught Ben Bernanke that the Fed could have prevented the Great Depression if the Fed had prevented the Money Supply from contraction.
- Credit is the new Money.
- That belief is driving Fed policy!
In This Age of Fiat Money
Investors Must:
- Monitor Credit Growth and government policies that affect credit growth. Any development that slows credit growth will harm the economy.
- Monitor Liquidity, i.e. the balance between the demand for and the supply of paper money. If the US budget deficit (demand) is less than the size of QE and the US Current Account deficit combined (supply), liquidity conditions will be favorable and asset prices will tend to rise.
Video: The New Depression and Corruption of Capitalism
41 Minutes, 37 Slides
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