If They Really Are Printing Money, Where The Hell Is It?
By George Mantor
If, as they say, the Fed has been printing money, wouldn’t there be more money for people to spend, to build things, to create jobs and pay taxes?
But, in point of fact, the fed doesn’t print anything; it simply buys toxic assets from banks and puts the loss on the American tax payer.
The Treasury prints the money, but they haven’t been printing any either. Lately, the bills I have been getting are in their final stage of utility—wrinkly, faded, soiled and tattered. Like my wardrobe. I had to tape one at the hinge to keep it from splitting in two.
If there really was more money being put into circulation, you would feel it. I’m not feeling it; just the opposite. In the words of Simply Red front-man, Mick Hucknall, “money’s too tight to mention”.
There is no money, just accountants and lawyers and entries in ledgers.
Oh, there’s a little bit of it floating around to keep things moving, but that’s just for show.
According to the Federal Reserve, there was only $1.1 trillion in US currency in circulation as of June 20, 2012. As of September 26, 2012, there was $1.13 trillion. That is anything but a dramatic increase in money in circulation. And, a disturbingly small number compared to the $1,000 trillion invested in derivatives which have no value of their own but derive it from something, God only knows what, else.
The money supply fluctuates over the course of the year as banks see more demand for cash for gift shopping and year-end vacations. There are actually times when banks have excess cash, and they send it back to the Fed. So much for an economy awash in recently printed money.
It is the banks themselves who determine how much cash they need as seasonal fluctuations occur.
Right now, there is an extraordinary demand for American currency in Europe as those who see the writing on the wall seek a safer haven than the Euro. Good luck with that.
Consequently, as much as two thirds of the $1.13 trillion is held overseas.
That means that there is only about $400 billion in actual money propping up a government that is sixteen trillion in debt. (Even that fact is obfuscation. Like all of the new jobs.)
Imagine having $400 in your checking account and writing $16,000 in checks. And, doing it over and over again with the shortfall being added to the total.
Meanwhile, Jamie Dimon claims that Chase has $1.3 trillion in cash deposits. Other banks make similar claims, none of which can be true. Each of the big banks would hold more cash than the treasury actually printed. Houston, we have a problem and it’s a BMF.
I’m not making this up. It is what banking is really all about, and there is actually a name for it, “Fractional Reserve Banking.” You’ve heard the term before but have you actually considered the implications? They only have a fraction of depositor’s money; just a small float to cover daily business.
Ninety percent of what we think of as the financial services industry is made up out of thin air.
Most people alive today were born into this system. We take it for granted. We don’t teach it in school. You think you know what money is. It seems pretty simple. It is a means of exchange that facilitates easier commerce between traders of goods and services, and bankers broker the exchanges.
But, that is a very limiting business model. It works well for buyers and sellers but creates little profit for third parties to capture.
Seeing an opportunity, wealthy individuals created, out of thin air, “Central Banks”. Our central bank, the Federal Reserve or the “Fed” is not a bank, not Federal, and doesn’t reserve a damn thing. It is a for profit enterprise controlled by financial elites.
Banks create money when someone borrows it.
Banks do not loan depositors’ money, they use new loans to make up money that didn’t exist.
We have what economists call a “debt based” economy. Only when money is borrowed does it come into existence. Did you get that? Those of you who already know this know the futility of trying to explain it to someone. It goes completely contrary to everything we thought we knew about money.
That is why they wanted all of us to borrow. It isn’t the goods we made and bought that got us the “thriving” economy and those SUVs, McMansions, the J Crew fashions and the $29.00 banana-walnut-caramel frappe with a triple shot; it was the money that was created when we borrowed to buy them and used our credit cards.
And, students graduating with large loans acquired to train them for jobs that don’t exist, well, they were just another target of sub-prime loans designed to never be repaid.
The monetary system must create debt in order to survive. That means that more debt needs to be created every year in excess of the debt, as well as the interest from the prior year.
That means that, not only can our debt never be paid off, if it were, the system would collapse. But never mind that, we are well beyond that at the other end of the spectrum.
We’ve hit the wall. With wages flattening, we couldn’t borrow anymore. No more borrowing, no more made up money. So, the first consequence has occurred as consumers discover the inevitable and unavoidable feature of debt based money; without endless borrowing, it cannot be sustained. And, endless borrowing is a physical impossibility.
Without consumer spending, jobs disappear and fewer taxes are collected to pay both the debt and expenses.
Governments around the world are now headed where consumers went first—into default.
The money that is out there has no greater value than cut up pieces of Piggly Wiggly grocery bags.
It is backed by the ”full faith and credit” of the United States Government. In other words, nothing at all.
Those are just words on paper from a government that proves at every turn that they are not to be trusted, and of whom it is well understood on the global front are completely and unequivocally tapped-out. Worse than broke.
And remember, the US already defaulted the dollar on August 15, 1971, when Richard Nixon appeared on television and told the world that we were not going to honor our obligation to redeem the paper for gold.
On that day, nations that were holding US dollars, because they believed they really were gold, were left with paper and promises.
Since that day, we have had to retain our position as the world’s reserve currency by force. Hence, all of the war-mongering since then.
Never mind the CDOs and the MBS and the Derivatives all being completely worthless, the money supposedly behind them is actually worthless.
How much money do you have in the bank or credit union? You know that they don’t actually have your money, right? Google bank run in Spain. Not only do they not have your money, your money doesn’t even exist.
Oh, that’s right, it’s insured by the FDIC; silly me, why was I worrying. I’m sure they will be able to get the $10s of trillions somewhere. Maybe China.
In Europe they intend to borrow their way out of the unsustainable debt they already have. The only problem is…money’s too tight to mention. There isn’t anyone left to borrow anything from.
Even the Chinese are upside down.
There is no way; there is no possible scenario, not even a plan in place other than the plan to control unrest. Everybody knows what is coming next except the majority of US citizens who find the very idea in stark contrast to everything they believe about America.
Other countries are employing methods of circumventing the use of the US dollar, and that is really what these endless wars are all about. Oil producing countries have no faith in the US dollar and you shouldn’t either.
Forget 9/11 and Muslim extremists. This is all about petro-dollars. Saddam Hussein was killed, not because he had WMDs; he was assassinated because he decided to sell oil for Euros not dollars.
Gaddafi was next because he wanted to trade oil for the Gold Dinar.
So, if you have wondered why, with two wars going so well, we want to get into it with Iran over nuclear capability that they don’t have, it’s really because they won’t accept US dollars for their oil. That is also the real reason behind our embargos.
China and Japan, two of our largest trading partners, are no longer using the dollar in their exchanges. It’s over for the dollar.
Quantitative Easing doesn’t put money into the system; it simply buys the worthless assets from the banks so they don’t collapse… yet. It’s Central Bankers stealing taxpayer’s money well into the future and giving it to insolvent banks.
Underlying our $16 trillion national debt are the costs of war to maintain the dominance of the dollar. But, the tide has turned and Europe’s inevitable collapse will be either followed or preceded by ours.
An event, any event, a natural disaster or a Y2K type fear could cause a large number of people to want to withdraw most or all of their money. The money doesn’t exist to cover more than a few percent of what depositors think they have. If you were wondering if there was such an event looming, I’ve got one for ya.
The FDIC’s unlimited insurance coverage on demand deposits is set to expire on December 31. That right there is over $1.6 trillion that will be on the move out of banks that only have it on paper. That should be fun to watch.
I think an entire flock of Black Swans just flew past.
For how to prepare: http://www.zerohedge.com/contributed/2012-07-12/preparing-inevitable