The Dying Middle Class (Largest Theft in History)

ZeroHedge ^ | 9/27/16 | Tyler Durden

[Be Careful]

Largest Theft in History As expected, Ms. Yellen smiled last week, announcing no change to the Fed’s extraordinary policies. For the last eight years, she has been aiding and abetting the largest theft in history.

[Garth Tater]

P.S. -- Don't think of it as "losing money." Think of it as paying a fee in exchange for the protection of monetary value.

No, if I loan $1000 out and receive $990 back at the end of the term of the loan I have lost $10. If I refrain from making that loan I now have all of my original money and have lost NOTHING. Your "deflationary economic environment" and "inflationary monetary environment" have nothing to do with me not losing money by holding on to it instead of loaning it out.

[Garth Tater]

In a truly deflationary environment your income will fall.

We were talking about return on assets (cash in hand) not income. Keep to the subject please.

[Alberta's Child]

Sorry. The implication was that if your income declines and your expenses do not, you will need to use those assets just to pay your bills. That’s why I used the example of the farmer who is “asset rich” but does not generate enough income to pay his expenses.

[PGR88]

And I'm convinced more than ever, that collapse and reset is necessary for any meaningful change to happen.

Indeed, it won't happen otherwise. The question is - what will the statists, cronies, socialists and globalists do? They won't go out without a fight, so we could be looking at the end of the Republic.

[Garth Tater]

That still doesn’t explain how negative interest rates are caused by a deflationary environment. IF someone has money to loan they would be better off not loaning it (in ANY environment) than they would be to loan it out at a guaranteed loss.

[dragnet2]

To clarify, for decades the career politicians have lied repeatedly to the people and operated as if they're running their own private shadow government. For decades every single election they get up there and say, "We're going to rebuild our country" but it just declines. Of course some believed these corrupt individuals. But the reality is, they're all doing business for the boys with the big buck$, fat corps etc. Lets not kid each other, they couldn't care less about Middle America. In fact some of these political freaks have nothing but contempt for it.

If this historic election isn't enough for you to understand the majority of Americans have, "had enough" of this lying loser leadership and do not support it, then I help ya.

[Alberta's Child]

The hypothetical endgame in that scenario is that cash will be outlawed and the currency will eventually be changed.

[PGR88]

If zero interest rates are so bad for the economy, jack the rates up to ten percent and what do these people think will happen?

Well, first off, I could afford to retire on interest from my savings, just like generations before, that had real money, could do. At present, I am just a tax slave, having my wages and savings stolen by the Soviet-style central planners at the Federal Reserve.

Have no doubt, the Federal Reserve and our unbacked fiat currency have allowed Washington to spend this country into oblivion and pursue very harmful political and social engineering schemes for decades. The middle class IS being destroyed because of it.

[dragnet2]

For example, do you think for the past several decades Americans supported these violent, lawless wide open borders?

Or did the GD politicians ignore and lie to them about this and other country killing policies on a routine basis?

Ever hear of CA prop 187? Look it up. Decades ago Californians held a historic vote to put a stop to tax paid assistance to illegals. It won big. Then the state working in concert with their fed co-conspirators burned the ballots and declared the election illegal.

[Alberta's Child]

Let's deal with that last subject after Election Day. Until then, we have no idea just how "historic" this election is.

In any case, I don't think there are too many people out there who believe that either candidate is going to do what is necessary to address this underlying problem. Anyone who believes that a candidate is going to cut their Social Security and/or Medicare entitlements by X% is NOT going to vote for that candidate.

What could happen (not likely right now) is that the gap in standards of living between generations gets big enough that a younger cohort effectively tosses their older cohort out on the street. It's much easier for a candidate to sell the idea of cutting entitlements by X% if he's only looking to appeal to voters who have no illusions about getting those entitlements anyway.

[Garth Tater]

The hypothetical endgame in that scenario is that cash will be outlawed and the currency will eventually be changed.

You are absolutely correct there. The end game REQUIRES the abolition of cash.

The bankers require negative interest rates to continue building the ever increasing debt. Zero and negative interest rates means this can go on forever.

Unfortunately for us, when we loan money to the banks (as in making a deposit into our accounts) that money will be booked at a negative interest rate, ie. we lose money.

BUT, when we borrow money from the banks (to buy a home or a car for example) that money will be booked at a positive interest rate. Count on it. They will NOT be paying you to borrow money from them. But you will have to pay them when you loan them money - and the abolition of cash will REQUIRE you to loan them money (ie. put it in their banks.)

It is the end game.

“It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.”
- Henry Ford,

[dragnet2]

If you could address the questions @ 49. Thanks.

[Alberta's Child]

What causes a negative interest rate, then?

The best evidence that we had of a serious deflationary problem was the ripple of mortgage defaults after 2008 where banks didn't even foreclose on the mortgages because they didn't want to take possession of an asset that was declining in value. This is a classic case of a deflationary spiral setting in.

[Alberta's Child]

For example, do you think for the past several decades Americans supported these violent, lawless wide open borders?

Of course not. But they had no choice in the matter because flooding the country with immigrants (illegal or otherwise) is really the only effective way to stave off the deflationary pressure we are facing with an upside-down demographic problem.

You didn't really think a country can kill off 50+ million of its own unborn citizens and not have a price to pay, did you?

Or did the GD politicians ignore and lie to them about this and other country killing policies on a routine basis?

Of course they did. We deluded ourselves into thinking we could afford our standard of living. The "GD politicians" were perfectly happy to feed that delusion, but that doesn't mean there isn't going to be a day of reckoning.

"Sooner or later in life we all sit down to a banquet of consequences." -- Robert Louis Stevenson

[Garth Tater]

Have no doubt, the Federal Reserve and our unbacked fiat currency have allowed Washington to spend this country into oblivion and pursue very harmful political and social engineering schemes for decades. The middle class IS being destroyed because of it.

Absolutely, and it all according to plan. Who owns the Federal Reserve and why are we not allowed to know their names? Answer that and you will know who is raping our country.

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
– Thomas Jefferson in the debate over the Re-charter of the Bank Bill (1809)

[Garth Tater]

What causes a negative interest rate, then?

I beat you by a minute there :)

See my post #51 (hint, it is not a deflationary environment)

[Alberta's Child]

BUT, when we borrow money from the banks (to buy a home or a car for example) that money will be booked at a positive interest rate. Count on it. They will NOT be paying you to borrow money from them.

Of course not. But from a monetary standpoint you shouldn't look at the banking transaction as a separate and distinct transaction from the purchase of the asset or product that it is financing. I'm looking at deflation as an overall trend in our financial system, not as it relates to one transaction. The bank will always make money, but the deflation would be seen in a discount on the price that is paid for the asset or product.

[Pelham]

Everything You Need to Know About Negative Rates

[Alberta's Child]

I think we are looking at deflation from completely different perspectives. I'm looking at it in terms of an underlying economic trend, not as it relates to an individual loan transaction.

The bank will never lend money at a negative interest rate, but it could absolutely find itself in a position where the "market rate" for a loan is negative (i.e., the bank hypothetically has to pay someone to borrow money). In this case, the bank simply doesn't underwrite any loans. You can theoretically borrow money at a negative interest rate, but nobody is there to lend you the money.

Note that there's no special distinction between low and negative interest rates in this situation. You already see the effects of this when interest rates are low, even if they are still positive.

[dragnet2]

For example, do you think for the past several decades Americans supported these violent, lawless wide open borders?

Of course not. But they had no choice in the matter because flooding the country with immigrants

Really? But you stated:

these political leaders, they are governing this country exactly the way the voters want it governed.

Hows that work?