On the heels of another chaotic trading week in world markets, today one of the top economists in the world sent King World News an incredibly powerful piece exposing the terrifying truth about the elites master plan to control humanity. Below is the fantastic piece from Michael Pento.
May 2 – (King World News) – Despite
all of the central bank manipulations over the past seven years, it is
finally becoming clear that economies will not be able to achieve escape
velocity. The U.S. central bank has the longest track record of
treading down the path of monetary manipulations, and has achieved
anemic average annual growth of 2.2% since 2010….
Therefore, to further demonstrate the
failure of money printing to engender economic growth, the dismal Q1 GDP
read of just 0.2 % displays the failure of this policy once again. Wall
Street Shills have been quick to once again blame snow in the winter
for the Q1 miss. However, it is becoming evident that Q2 will not
produce any such anticipated rebound.
Economic Activity Is Plunging Across The Globe
Markit’s Flash U.S. Services PMI
(Purchaser Managers Index) for April indicated that business activity
rose at a slower pace than expected. The April reading came in at 54.2,
which was below the consensus of 56.2 and below March’s level of 55.3.
Adding to the bad news was the Conference Board's Consumer Confidence
Index that hit 95.2 in April. Economists polled by Reuters expected a
reading of 102.5. And, the Richmond Fed Manufacturing Index fell into
the minus column for the second month in a row, at -3 for the start of
Q2.
Things don’t look much better across
the globe. The Euro zone Purchasing Managers' Survey disappointed
investors with the German PMI index falling to 54.2, from March's
eight-month high of 55.4. France's PMI also showed a slower expansion
than forecast in the services sector and a worse contraction in
manufacturing than predicted. Manufacturing PMI in France decreased to
48.4 in April, from 48.8 in March.
Japanese manufacturing activity
contracted in April for the first time in almost a year, as domestic
orders and output fell. The Markit’s Japan Manufacturing Purchasing
Managers Index (PMI) fell to a seasonally adjusted 49.7 in April, from a
final 50.3 in March. The index fell below the 50 threshold that
separates contraction from expansion for the first time since May of
last year.
The Devloped World Is Drowning In Debt
We are in our seventh year of
record-low interest rates and banks have been flooded with reserves.
However, the developed world appears to be debt-disabled. That is,
already saturated in debt, therefore unwilling and unable to service new
debt due to a lack of real income growth.
So the problem for central banks and
governments is how to get the money supply booming in an environment
where consumers want to deleverage and save. Zero percent interest rates
(ZIRP) are inflationary and negative real interest rates foment asset
bubbles and encourage new debt accumulation.
For decades central banks have used
their control of the price of money to coerce boom cycles that
eventually turn to bust. But for the past six years, their foray into
ZIRP land hasn’t provided the boom cycle they were expecting. Sure, they
have created massive bubbles in bonds and equities–but the economy has
yet to enjoy the promised growth that is supposed to trickle down from
creating these bubbles. They have set the markets up for a bust, yet
the economy never enjoyed the boom.
The Problem With The Master Plan
This has left Keynesians scratching
their respective heads and scheming new ways to encourage even more
borrowing and spending. The Keynesians who rule the economy now control
the price of money but are having difficulty controlling its supply and
producing rapid inflation rates.
Bank deposits that pay nothing and
ultra-low borrowing costs haven’t proved effective in boosting money
supply and velocity growth. The growth rate of M3 has fallen from 9% in
2012, to under 4% today. And monetary velocity has steadily declined
since the Great Recession began. Therefore, unfortunately, the next
baneful government scheme is to push interest rates much further into
negative territory in real terms; and also in nominal terms as well!
You would think this is absolutely
absurd but it is already happening. The European Central Bank, has a
deposit rate of minus 0.2 percent and the Swiss National Bank, has a
deposit rate of minus 0.75 percent. On April 21st the cost for banks to
borrow from each other in euros (the euro interbank offered rate, or
Euribor) tipped negative for the first time. And as of April 17th, bonds
comprising 31% of the value of the Bloomberg Eurozone Sovereign Bond
Index, were trading with negative yields.
Negative Interest Rates In America?
They already have. Beginning on
May 1st, JP Morgan Chase has announced they will charge certain
customers a “balance sheet utilization fee” of 1% a year on deposits in
excess of the money they need for operations. That amounts to a negative
interest rate on deposits. Banks formerly competed for your money — now
they want to charge you to park it with them.
A Global Run On Banks?
With interest on deposits at next to
nothing, or now slightly negative, the only reason for consumers to keep
money in the bank is convenience. The more money you lose money on your
deposits in the form of a “utilization fee”, the more attractive your
mattress becomes. But, as long as paper money and your mattress are
available, the Fed will not be able to fully implement its negative rate
policy in its quest to create inflation. After all, there would be a
global run on the banking system if rates were to fall into negative
territory by more than just a few percentage points.
The Terrifying Truth About The Elites Master Plan To Control Humanity
So how can central banks and
governments ensure rapid money supply growth and velocity if consumers
have the option to hoard cash? Some of the “best minds” in Keynesian
thought, like Kenneth Rogoff, have a solution to this. They are floating
the idea that paper money should be made illegal and the evidence shows
governments are listening.
If you outlaw hard cash, and make all
money digital, there is no limit to how much borrowers can get paid to
borrow and how much savers get charged to save. This would make it
unprofitable to hoard cash, and compel people to consume and borrow
electronic currency as fast as possible.
Orwellian Control
Money in the bank would become the “hot
potato”: as soon as it hits your bank account the race would be on to
move it to the next person’s account. Whoever gets stuck with the money
when the music ends pays a fee; that would be some increase in
velocity! And vastly negative real interest rates would force the
amount of leverage in the economy to explode.
This idea sounds fairly
Orwellian–allowing central banks to control every aspect of monetary
exchange and giving the Federal Government an electronic gateway to
every financial transaction. But when you think about it, the idea of a
fiat currency and the Federal Reserve were radical ideas before they
became common place. Indeed, this is exactly why the authors of our
Constitution tried to ensure gold and silver would have the final and
only say in the supply and value of money.
Just as gold once stood in the way of
governments' desire to expand the money supply, physical cash is now
deemed as a fetter to the complete control of savings and wealth by the
state. History is replete with examples of just how far governments will
go to usurp control of people under the guise of the greater good.
They Key Is To Buy Physical Gold And Silver While You Still Can
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