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This Guy Dr Gerry from Boom Finance seems to one of us when it comes to Freedom and Wokism and all that. However he has a Much Much more sober take on Central banking and the World Wide Monetary System
Sometimes we all get completely caught up in our Opinion that the World Financial System is a huge Ponzi Scheme that is ready to explode and disintegrate any moment
I personally have been in this “any moment camp” for the last 30 years or so…hence my interest in Gold !
Most here are the same.
THIS “BOOM” GUY IS NOT IN THIS CAMP AT ALL
The Monetary System and all it’s convolutions and intricacies is really a mystery to most of us.
I know that some here , pedro for one , understand it’s working much much more than I.
My eyes tend to glaze over when this topic comes up
Here is his explanation which I believe deserves our Conideration …a Closed Mind is a dead Mind
If he is right …and he sure seems to confidently know his stuff…then maybe we have been mislead on how perilous a state the World Financial System is really in…and THAT would be a huge relief…None of us really wants to experience the Doomsday Mad max scenario …do we ?
A lot of really good other insights in this weeks Boom
SNIP
Governments are not “in massive debt” that has enslaved them. They have sold securities and received funds. They (almost always) repay the investors at Maturity Date. Defaults by governments on such contractual agreements are rare.
So – BOOM wants to make it crystal clear. Governments are NOT “borrowing large amounts of unpayable debt” and they are NOT “printing massive amounts of new money”. Our children and grandchildren will not be “enslaved by government debt”.
Wasn’t it Alan Greenspan(or someone from that era) who said the US is never going to default. They will just print as much fiat as necessary to cover the increasing amount of debt. So that is not very reassuring but rather confirms what many of us believe. Hyperinflation where the dollar(and other currencies) end up like Weimar Germany. The unanswered question is how long it takes to get there.
“They will just print as much fiat as necessary to cover the increasing amount of debt.”
Many households are now at the financial breaking point.
How much further do they DARE go with their counterfeiting to support treasuries (already down a bunch)?
Well, that’s why they want 15 minute cities, surveillance cameras, and other tyrannical measures to ensure we can’t/won’t REVOLT. The UniParty wants nothing to do with Challenges to its authority. The trick will be to find another way to deliver our message.
Globally now, debt is 4x income.
Rates are now on the rise, so debt service is rising relative to that income.
There is also much more leverage in the system, thanks to prior ZIRP and NIRP.
Scale up at .2% returns to make 10%.
Price (for assets especially) is (always) set at the margin.
Keep growing debt or it pops.
When it pops, even small price declines (given the leverage) will wipe out net equity. Insolvency contagion. Assets go no bid. Price discovery (absent debt pyramiding) returns. Contagion on WS then spreads to Main St as wealth effect craters.
Probably just waiting on an exogenous (black swan) event like a non submarine Hunga Tonga or a Pole Flip.
Who knows which pin?
If what the guy says is true, then why be worried about Social Security running out of $$$? They can just borrow more to fill the coffers according to this guy, right?
Wha the hell? Does any of this make sense when he talks about “injecting money” into the economy when it needs it? What money? What value? Are we all so stupid to think that debt does not require repayment? Ask those who iived through the devaluation of the British pound – nothing to worry about except Britain ceased to be important on the world stage. They are a hollow shell, which is where the USA is now teetering on the brink.
The U.S. GDP numbers are all fake, so what is he basing his numbers on? Fantasy.
Like the rest of his nonsense.
China is smart in that it spends its “money” on things of value – like infrastructure, and stockpiles of commodities – things that work to create wealth. We’ve blown trillions and trillions on destructive wars around the world. All of it destruction, while the infrastructure of our nation slowly crumbles.
This guy is an idiot. As is anyone who believes in the magic of creating nothing out of thin air.
The reason I posted this is because he is saying something completely different from what you guys are saying and from what we all have been led to believe
The FED and the Treasury Do Not actually just Print money …except in the case of Quantitative easing which he claims is responsible for just 2.5% of all the Money Supply since the GFC. Plus another 2% they “print” for physical cash . The rest of the money supply comes from bank loans into the economy to people who WANT Things and want to create things
Money is created by Loans…ie by Banks Lending to People who want the money to purchase assets and to creat economic activity
He is saying Governments do not print money to fund their deficits they Sell Bonds and then they pay back the Bond Holders with interest ( sometimes paltry and sometimes substantial) …always have and always will
The money they get from selling bonds is then spent into the economy …building infrastructure and paying Govt workers etc….with 10% for the Big Guys
Sure there is a ton of waste…but every dollar they make selling their bonds is circulating in the economy some way or another
I don’t think he is an idiot. I think WE do not understand how money is created and we have made assumptions based on faulty understanding of the process.
However Private debt is another matter as he stated…that is where we are getting into trouble . Stay tuned as he will explain
I am willing to listen and learn something here
“he is saying something completely different from what you guys are saying”
And that is exactly HOW we do things differently. We actually entertain opposing viewpoints. Unlike the Leftards.
“He is saying Governments do not print money to fund their deficits they Sell Bonds and then they pay back the Bond Holders with interest ( sometimes paltry and sometimes substantial) …always have and always will”
Correct … but what is missing? Who buys the bonds AND HOW? Find a graphic on Total Central Bank Balance Sheets (all of them). They bought the bonds, that governments sold (BOJ owns “all” JGBs).
Now, where did those central banks get the “money” to buy those bonds?
They created digital cash out of thin air, then bought the bonds from the primary dealers. The dealers then placed that cash into their TGA (reserve account with the Fed … could have the name wrong). The banks then have more space to lend (and inflate).
As for debt being “good” or “bad”, that depends entirely on the return it yields to society over time. Private debt for consumption goods is worse that public debt for real infrastructure. Private debt for a factory beats public debt to fund a war. Which pays back the borrowing and how fast?