So What Happens When Government Lies Are Not Enough?

Video Rebel’s Blog

“With a gun a man can rob a bank , with a bank a man can rob the world.” – Carter Glass, co-author of the Glass-Steagall Act.

Actually, the economy is much worse than this graph indicates because it assumes the governments of the United States and the European Union are telling us the truth. John Williams of Shadow Stats says the real inflation rate is 9.7%. The federal government said the GDP contracted at 1% in the first quarter but you get a much more severe and more realistic image of that contraction when you use the real inflation rate.  

Alarmingly food inflation which has triggered riots elsewhere is starting to spike higher with beef, pork and eggs leading the way. Wholesale food price increases in America are running at 22%. And that is for the most dangerous food in the world. In South Korea shoppers can check their fish with a store Geiger counter.  In America not even the government checks fish from Fukushima. American grain exports are so contaminated with Genetically Modified Organisms that the Chinese had to reject them and send to Brazil for real food. Americans are driven to eat more because manufacturers do not have to label their products with the words Monosodium Glutamate (MSG) which one researcher said causes consumers to eat 7% more.

What would happen to America’s GDP if we devalued what the US spends on healthcare by what it would really be worth if we had access to medicine in Europe or Asia where treatments are far cheaper? In the last 12 years U.S. spending on healthcare tripled from $1.3 trillion to $3.8 trillion for 2013 with the lowest projected increase for 2014 being 6.5%. If we subtracted out $2 trillion for what appears to be extortionate pricing in healthcare, we would have to cut the IMF estimated US GDP from $16.8 to $14.8 trillion. And while we are at it John Williams pointed out that durable goods production in April was lead by military hardware. Is it legitimate to count tanks, drones and overpriced F-35s in our GDP because after all we do not consume them? The parents of 8 year-old girls gathering firewood in Afghanistan certainly do not put a positive value on either drones or hellfire missiles. The F-35 might cost $181 million each but it can’t fly in the rain, is not stealthy and cannot win a dogfight against a Russian MIG-21 from the 1950s. And that $181 million figure does not include the cost of research and development.

The American economy is run from the top down. Someone starts the process by giving a substantial campaign donation. The government has to decide: Should I spend $700 billion to build a website that does not work and leaves American citizens wide open to identity thieves or should I let a major software company build one for me for free? The government decides that is better to accept the campaign cash. After all that $700 billion cost is really free money. Ben Bernanke and now Janet Yellen can print up a few trillion dollars and swap them for euros with Mario Draghi at the European Central Bank. And then a trusted friend in Brussels can use euros to buy $380 billion in US Treasury bonds. It is free money. What could go wrong?

Student debt and car debt have driven the US economy of late. The average college student graduates with $32,200 in student debt and $3,000 in credit card debt. 90% of all new car loons are subprime. And those are loans on cars designed with planned obsolescence in mind. At $18,000 even a Honda Civic is a major financial transaction for an American household  burdened with declining wages and increasing debts struggling to maintain a semblance of the prosperity that used to be theirs. Auto companies have produced way too many cars. So at some point they are going to cut hours way back while salesmen sell cars to people who cannot even afford to buy gas to drive to work. In California before the housing subprime crash I met an illegal alien whose husband refused to work. She had 3 children and made $10.00 an hour as a babysitter which was not a lot of money in Silicon Valley. She told her mortgage broker she could not afford to make payments on the home loan they were trying to sell her. But she agreed to the loan when they explained to her that they would loan her enough extra money to make the payments. What could go wrong?

Irwin Schiff, the famed American tax protester and father of Peter Schiff, once said on Late Night TV, “If a man from Mars landed on earth, he would tell Washington not to tax the American people just print more of those Green Things” (Federal Reserve Notes.) That was before the North American Free Trade Act (NAFTA) and the World Trade Organization. We have lost 12 million jobs and closed 56,000 manufacturing plants since. There are 30.7 million federal, state and local government workers if you count the 6.9 million contractors and grantees. Tax collections are dropping really fast. Ohio tax receipts fell the most at 19% and California is down 11% over last year.

America has a top down economy where big campaign contributors from GE and J P Morgan give cash to the President. He then has the EPA rule that carbon dioxide is a pollutant. He uses the EPA to shut down producers of clean coal generated electricity while allowing the plants from GE and J P Morgan to remain open. Utility costs to cash strapped consumers are up 40%. But who cares about those 180 million people at the bottom. The same thing has been happening in agriculture where the federal government has been running farmers and ranchers out of business for decades so Corporate Farms who do make Big Donations can take over. Who cares that 180 million people are struggling with their budgets. There is no limit to the number of lies they are willing to believe. Or is there?

Look at how great Obamacare has already been in 2014. It has raised premiums but nobody cares about those 180 million people at the bottom. Analysts say Obamacare has already rationed health care usage. Real incomes declined more than 2% over last year but those insurance deductibles ranging from $3,000 to $5,500 and more mean that most people apart from welfare recipients and millionaires cannot afford to get medical treatment. That and new admission rules have cut back on things people don’t need like life saving surgery. So what can go wrong?

A funny thing happened on the way to Shanghai. Brazil, Russia, India, China and South Africa (BRICS) formed an alliance with 80 other nations to take down the dollar as the world’s international reserve currency. As I said previously, they are trying to use a series of regional currencies backed by gold, oil and other commodities to replace the US dollar. The world has been on a Petrodollar standard since the 1973 Arab-Israeli war. The US went off the gold exchange standard on August 15, 1971 when President Nixon refused to redeem dollars at $35 an ounce from foreign governments. The Petrodollar standard means that the Saudis and other Gulf State monarchies only sell oil for dollars. Europeans and Asians have to go buy dollars before they can buy oil. And it meant until recently that those dollars are used to buy US Treasury bonds. If oil is no longer sold for dollars but for gold or its equivalent, then there will be no one to cover America’s trade deficit and to buy US Treasury bonds  and hence pay the salaries of those 30.7 million government workers. So what can go wrong as long as Mario Draghi is there to swap trillions in euros for trillions in dollars?

China would like to buy what little gold is left in Europe and America before they announce a gold backed yuan. China would like to take their time and to gently raise the incomes of their customers in the Mideast, Aida, Africa and Latin America before lowering the incomes through devaluation of Americans, the British and southern Europeans. The Chinese invited the President of Iran to that Shanghai Summit with the Russian President. They wanted to take Iran into the Russian-Chinese military alliance. But Putin who is rumored to have a Jewish mother has a very strong Jewish Lobby back home to contend with. The Chinese are buying the Russian S-400 system which they will in due time sell to Iran. And that is a game changer.

What could go wrong will go wrong. China has a domestic economy built on greed, stupidity and corruption. They have trillions of dollars in bad loans. I would expect that one day the Chinese leadership will have to sell a trillion dollars in US Treasury bonds just to keep the mobs from lynching them. Look at the video below  from Europe. Lest you think these riots are bad consider this: America has 350 million guns. In the last Depression at least 3 million Americans starved to death. Depressions are periods of time in which Unpayable Debts are cancelled. Since we have many more Unpayable Debts than in 1933, we should have a far more severe Depression and lose 10 million or more Americans to starvation. So what could go wrong?

Watch this video but imagine this to be an American city with a million or so guns the Day After the Dollar Dies. Nationwide Food Riots have emptied the stores so there is nothing to eat. The federal government might have cut off water and even electricity to force the rioters to go a FEMA camp. A woman I know in Memphis has said the government has movable barricades to keep the poor people from entering wealthy neighborhoods in case of a national emergency. Those barricades might not protect the rich from the poor..

The day is coming in 2015 if not 2014 when no amount of Money Printing combined with Lies will be sufficient to create an artificial cocoon in which the TV audiences can protect themselves from reality. That will be the Day we the People can Say No loud enough to be heard in Washington, New York, London and everywhere else Bankers dictate the rules that govern our lives..

2 thoughts on “So What Happens When Government Lies Are Not Enough?

  1. “So What Happens When Government Lies Are Not Enough?”

    Just a wild guess here, but…

    Sh#t happens? (literally AND figuratively speaking).

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