WHY DOES THE ECONOMY NEED TO BE REFORMED

Rickards noted, eventually the aftermath of a coming collapse will follow the current expansion, which has been going on since June 2009 called quantitive easing, a failed Keynesian theory practiced in Japan leading to a forty plus year economic depression. Central banks took the pressure off with money printing, zero interest rates, currency swaps and other guarantees behind the scenes, but the underlying imbalances remain. Debtors hate deflation because they are repaying with expensive money. Likewise during inflation they are paying back money with diluted money with less buying power. During inflation it hurts less to pay down debt. During inflation your paying with dollars with less value than you borrowed with. Deflation puts stress on the banks. The fed job is to stabilize the banks. Therefore the fed fights deflation by increasing the money supply causing inflation. There are only so many ways to fight deflation, however. The natural cure is growth, but extremely high debt loads are likely to curtail growth The banks cannot tolerate deflation because it increases the real value of the debt. The national debt of the United States has not been growing in linear fashion, he noted, as many assume. Rather, U.S. debt follows a sine wave pattern, and traditionally it balloons in times of war, and is paid off in times of peace. Over the 35-year period from 1945 to 1980, the U.S. reduced the debt-to-GDP ratio from 120 percent to 30 percent through bipartisan effort. But the war debt was paid off during times of peace including the 1820s, 1870s, 1920s and 1990s. It was only after 2000 that things went off the rails and government debt went straight up under George W. Bush, Barack Obama, Donald Trump and Joe Biden Low debt helps grow the economy . Periods of high growth occur as debt is low. Reinhart’s and Rogoff’s work states once debt surpasses 90 percent of GDP, it is impossible to grow our way out of the debt. The us has been in a financial war with Iran since trump. The financial war has been in the capital markets. Americans are not borrowing and spending money at a rate conducive to producing inflation. The velocity of money moving through the system in dollars has not been enough to sustain inflation. Deflation will occur. Gold devaluation has not occur. Inflation must have gold devaluation. The psychology of deflation is setting in by the consumer as they refuse to borrow. Us debt is $30 trillion dollars. Time to repudiate the national debt as unsustainable. Rolling over the debt is only possible if the creditors allow credit standing. A 50 trillion dollar economy is required to sustain the high debt economy we have a 21 ttrillion dollar economy.