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| The Feds policy is not to blame now. That is correct. They are to blame for leading to this back in about 2011.
In a debt based system that relies on debt expansion, the ZIRP and effectively NIRP created a massive expansion of debt, which most people call inflation. That debt (inflation) drives up all prices as more currency is now chasing the same goods. With higher prices, but not generated by grass roots wealth production (ie not debt) then there is a lower percentage of real wealth in the expanded economy to buy the same goods. And so to keep the debt based system expanding then more debt is needed since the growth isn't coming from real wealth creation.
Expansion of debt via cheap interest rates is relatively easy initially, but eventually the average Joe has taken on as much debt as they are willing, so business must then keep expanding debt to keep growth going, and governments also just increase debt to keep the inflation of economy going. If governments stop expanding debt, which they haven't done for 50 years coincidentally enough, and businesses don't add more debt, and average Joe stops adding debt, then there is only one possible outcome - a fall in prices as there is no more new currency to chase the same goods.
It doesn't take a computer program to figure out what happens when debt stops expanding in a debt based system.
We leave control of this debt based system to an unelected, unaccountable group. Who are also the richest people on the planet. The results should not be surprising.
Yes, the central Bankers policies are not to blame right now. But perhaps someone should say when their policies are to be blamed - but no one will talk about that because the central Bankers are unaccountable and policy is never to be questioned. That's not how the system works. | |
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US GDP Stagnant – Q1 2025
