Money Bubble Already Starting to Burst

This will be the fourth bubble in the last 22 years. First we had the Savings and Loan bubble of 1989. Second was the NASDAQ bubble of 2000. Third was the housing bubble of 2007 and now the money bubble of 2011. Why do we keep getting these bubbles? Because all our Federal Reserve and politicians know is printing and spending money. Creating inflation is the only trick in their bag. Some call it Keynesian economics, others fraud.

Will Ben Bernanke be remembered as the worse Federal Reserve Chairman while history forgets Alan Greenspan?

The problem with the current money bubble is government spending has gone up 40% and private investment down 21% from 2005 to 2010. In other words we have been “investing” in the wrong sector of the economy for the last five years.

Before from 2003 to 2007 we had five years of mal-investment in housing stock and other related items. Just a rough guess but there was about $5.4 trillion invested in real estate, from 2003 to today, which should have been invested elsewhere. And that bubble is still bursting. It is not over for real estate.

The federal government has spent $1.7 trillion on nothing more than increasing the growth of government since 2005. A fraud perpetrated to satisfy some Keynesian economist fairy tale of what the Gross Domestic Product should be. In five years while the rest of the economy has contracted government spending has accelerated 40%.

Why is this so damaging? Because when the rest of the economy is contracting the money has to be taxed, borrowed or printed. In the case of the United States that means borrowed money. Government receipts have gone up 4.9% since 2005 or less than 1% a year. It does not take a economist to figure out 8% annual growth in government with a 1% annual growth in revenues plus a negative growth rate of 4.2% in private investment is Argentina numbers.

It is all good if you work for the government

To compound the problem unlike Japan we do not have a homogeneous country like we did in 1933. Only 64% of the population is white. Blacks end up in the clink at a rate 6.5 times that of whites and Hispanics 3.8 times. Children need to be taught the facts so they do not end up like the eleven year oldin Cleveland, Texas that was raped by 28 black men. We need to teach our children to stay out of dangerous areas and to hell with political correctness.

When the bubble burst there will be a lot of hungry people. To put it bluntly I would not want to be in any major city with large Hispanic and black populations side by side. Like Orlando, Florida, Miami, Florida or Oakland, California. The politicians and bankers are spreading the fuel liberally and preparing the fire.

Some may ask do the politicians know what they are doing or are they just caught up in John Maynard Keynes fairy tales? Some are clueless like Obama but some know exactly what they are doing like Bernanke. If you read banking history from the left or right point of view the same inflationary events, bubbles, and scandals occur over and over again. Currently we are following the path of the Weimar Republic of the central bank assuming the role of Daddy Big Bucks bailing everyone out time after time. Nobody is reporting it but the Federal Reserve is expanding the monetary base at the same growth rate as they did in the fall of 2008. More bail outs. More quantitative easing to come.

Once the Federal Reserve and the politicians become addicted to the printing press it is a vicious cycle that took EIGHT years for the German central bank and politicians to break. In the eight years millions of elderly people starved to death and a generation of malnourished children went on to fight for Hitler.

Private investment down 21% since 2005

Is Wall Street scared? Hell no. They know inflation is a gold mine of opportunities to purchased undervalued assets for literally pennies on the dollar. Wall Street and bankers all over the world have been playing this game for centuries. They know inflation concentrates wealth into the hands of a very few powerful elites. They just want to make sure it is them.

The bottom line is do what you can. In WWII people in the cities started victory gardens. Learn how to grow your own food. Stock up. Firearms training. The storm is coming and it will be a category 4 or 5 hurricane.