The Name is Bond - Part VIII
The original question of "what is the lesser of the evils" begs an analogy of how we arrived in the situation we are today.
Did you ever play a game of Monopoly where the bank ran out of money? The player with the most money in effect winds up being the bank. Bare in mind that the US has the largest economy and the most money, then take this analogy a step further.
Consider the central banks bond & fiat currency forex kiting/ponzi scheme and the 2000 Tech bubble blowoff...
Mr. Central Banker is now faced with a money supply shortage due to a liquidity drain; resulting in an almost bankrupt international banking system and an impending global economic crisis. What would you do?
Drop interest rates and print more money. The other "players" who are making money and holding the cash are forced to cycle the dollars back into your bonds to keep the kiting/ponzi scheme going.
At the same time, you need to generate more dollars for those players and the economies on the "bubble" in which you want to maintain political stability, lest things disintegrate into total chaos.
At the same time, it is necessary to have this revenue stream generate enough windfall profits from your inflated money supply to cycle back into, keep afloat and cover, your bond & currency arbitrage kiting/ponzi scheme.
What will you do?? More on the revenue stream and public expectations in Part IX.
Did you ever play a game of Monopoly where the bank ran out of money? The player with the most money in effect winds up being the bank. Bare in mind that the US has the largest economy and the most money, then take this analogy a step further.
Consider the central banks bond & fiat currency forex kiting/ponzi scheme and the 2000 Tech bubble blowoff...
Mr. Central Banker is now faced with a money supply shortage due to a liquidity drain; resulting in an almost bankrupt international banking system and an impending global economic crisis. What would you do?
Drop interest rates and print more money. The other "players" who are making money and holding the cash are forced to cycle the dollars back into your bonds to keep the kiting/ponzi scheme going.
At the same time, you need to generate more dollars for those players and the economies on the "bubble" in which you want to maintain political stability, lest things disintegrate into total chaos.
At the same time, it is necessary to have this revenue stream generate enough windfall profits from your inflated money supply to cycle back into, keep afloat and cover, your bond & currency arbitrage kiting/ponzi scheme.
What will you do?? More on the revenue stream and public expectations in Part IX.
Comments