Throughout the past year, there has been some speculation about the significance of the Third World War. When the general public thinks of war, we evoke images of horrible bloodshed and even abandoned nuclear weapons. But, there is a more insidious weapon that is in fact ready to devastate economies all over the world. What we do know is that the Trump administration, so ignorant of foreign affairs, is ready to unleash a barrage of retaliation from our trading partners around the world. These tariffs that it plans to apply could very well justify destructive attacks against the very precarious financial system of the United States by China, Japan, Russia, the EU and the countries of the United States. OPEC, as well as many other countries
. that these countries will begin to get rid of their US debt and, in doing so, will end the dollar as a global reserve. This is only on the surface. The real danger is an internal war waged against the global economy by central banks. It is the banks themselves that have deliberately created financial crises and collapses. Remember the financial crisis of 2008. This financial disaster for millions of Americans has only made financial institutions even richer when the US government and the Fed injected billions of dollars into the banks too big to fail. If the US dollar was not the world's reserve currency, the panic of 2008 would have made the Great Depression a picnic.
Today, vast sums of wealth can be transferred at the speed of light. The collapse of one or more economies really means the destruction of bankers' wealth. It is the banks themselves who see the national economies as they simply say the holding of containers. How it works is that banks can pay their wealth that they can create from scratch, as long as the US dollar is the world's reserve currency, in one or more of these containers or the economy . They can also circulate this wealth in the container or the economy for a while and then dump all their wealth at any time.
We must remember that a destruction of the national economy can be exploited as a means to increase end. Usually, what is called a greater end means using the crisis to justify greater centralization of power or the transfer of power from the public to the hands of the people behind the bankers. Throughout history, there have been such transfers. The liquidity crisis of 1914, just after the establishment of the Federal Reserve, led to the First World War. Do not forget the hoarding of financial power by the banks when creating the League of Nations. In 1920, the artificial bubble in several classes of assets created by the Federal Reserve with very low interest rates. This bubble burst when interest rates were raised that caused the Great Depression. The depression in the United States coincided with other economic disasters manufactured in Europe and Asia led to the rise of fascism and World War II. All of this has greatly benefited the banking establishment as thousands of small banks have been crushed. This was the beginning of the World Bank, the United Nations, the International Monetary Fund and the beginning of the European Union. When we realize what has happened, we find that in every economic calamity, ownership and bureaucratic control are consolidated into an oligarchic class. And, with every financial disaster leads to a massive dependence of debt.
Today, we are in an era of emerging crisis and believe it or not, the Fed feeds the fire of the disaster. A disaster that will trigger and explode, a controlled demolition of our financial system. Remember the massive dependence of debt? What we have today are three time bombs, all capable of causing massive and unprecedented destruction. Consumer Debt: The total debt of US households at the end of 2017 exceeded $ 13 trillion. the highest in history. In the last five years, consumer debt has increased. By the end of 2018, projected consumer debt will be even higher. Credit cards, auto loans, mortgages, student loans, etc. all indicate that the so-called economic recovery is just a mirror. There was no legitimate wealth creation or resurgence. there was only a greater reliance on the same debt that helped create the financial crisis of 2008. The Fed's money only made the banks too much. big to go bankrupt. When the Fed quietly raises interest rates, all that affects the many categories of assets, including housing markets, mortgages, etc., auto loans, credit cards and loans. student loans. Indeed, when interest rates rise, all other sectors of the economy are under pressure. The average citizen with record levels of debt is now facing a financial nightmare.
Corporate debt is the most subversive crisis that is waiting to explode. With rising interest rates and the amount of corporate debt already on the table, we will more than likely see another stock market crash. Today, the S & P shows that at least 40% of the 13,000 companies have a debt / earnings ratio of 5 times. An even higher level than before the collapse of 2008. We must consider that companies are exploiting low interest rates to borrow huge sums of money for the sole purpose to buy their own shares. None of this money went to increase the salaries of employees. Stock repurchases constitute a legal form of market manipulation in which shares of companies are bought back by the public, which reduces the number of existing shares circulating on the market, artificially increasing the value overall actions.
Redemptions were the main fuel for the longest bull market in history. But, this bull market is so false that even the media has begun to question its validity. Share buybacks are completely dependent on cheap debt. Unfortunately, cheap debt does not become so cheap with rising Fed interest rates. Finally, perhaps sooner than we think, another stock market crash is inevitable.
The national debt has been the subject of much presidential debate and yet it is looming higher than ever. In the wake of a potential global trade war, the question arises as to how long will it take before major US Treasury bondholders like China give up their holdings in the US? reprisals? Trump's insanity in refusing to recognize the seriousness of our continued rise in the national debt ceiling only concludes that our national debt will only increase. The Federal Reserve was the biggest buyer of US debt. But, since they raised interest rates, the Fed probably will not intervene if and when a trade war escalates into a treasury bond dump. When that happens, it will be too late for our dollar to be no longer the world's reserve currency. And when that happens, all hell will break loose.
We would do better to recognize that the three contingencies of debt, each deeper each year, are catalysts of an economic catastrophe that will occur if it is not treated as soon as possible. The more we remain in a perpetual state of denial by elected officials and do not realize how close we are to an economic Armageddon, the sooner all Americans will pay a heavy price. A price we can not afford anymore. There is a way to deny the possibility of a financial failure, but first we must recognize that our elected officials recognize how close we are to falling into the financial abyss. We must then implement the reforms that will undo the possibility of financial calamities by inaugurating the Ten Articles of Confederation on National Economic Reform.