Former Goldman Sachs employee: “The Bubble To End All Bubbles Is Coming”

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A recent PBS financial column is taking the internet by storm. Trouble is, “The monetary bubble to end all bubbles” is never coming. It’s almost entirely banking elite propaganda, with some kernels of truth, penned by none other than a former Goldman Sachs employee. Yet it’s been shared close to 9,000 times, and counting. Either PBS should be ashamed of itself, or those sharing it as if it’s gospel should be.

In fairness, PBS offers an alternative view of the universe by another economist (who happens to be a former student of the Goldman Sachs author!). But since he’s just a lowly PBS employee, offering honest solutions that have already been vilified by the corporate owned media for decades, his has been shared a meager 157 times.

Clearly, the truth is simply not as popular as the bullshit peddled by our mainstream media at the behest of our banking overlords.

Yes, monetary expansion is taking place at a record pace – but THAT is not the problem. The problem, among other things, is who governments are giving the goddamn money to! Take for example the ECB…

“In March of this year, ECB President Mario Draghi announced that the ECB would begin directly supporting companies by buying their bonds — the IOUs they issue when they borrow money. Previously, all the euro printing had been directed toward buying government debt. With the European economy continuing to sputter, however, Mr. Draghi took more dramatic action to give money directly to companies in the hopes that they would use it to expand their operations and increase hiring.

The problem is that when the ECB lends newly minted money to companies by buying their bonds, it transfers wealth from European savers to companies. How so? Because the more money the ECB lends by buying corporate bonds, the lower the interest rate companies have to pay. Consider that Toyota sold a Euro-bond last week that pays no interest. Zero. Who would buy a bond that pays no interest? The European Central Bank is happy to, but in doing so, it forces savers who would invest in corporate bonds to accept a zero rate of interest as well.

Further adding insult to injury, the ECB will only buy the bonds of blue-chip companies. These large, rich companies are precisely the ones that would have no trouble borrowing from private investors. Small companies, which might actually need money to expand and hire people, are excluded from the ECB’s bond-buying program.

So the ECB program transfers money from European savers to the largest, richest companies in the world. What was the response to the ECB’s bond buying plan? Was there outrage at this transfer of wealth? Did Senators Elizabeth Warren and Bernie Sanders lead “Occupy ECB” marches? No, exactly the opposite happened: Stock markets around the world rallied after the announcement of more European printing.”

So here he is admitting that the ECB is transferring billions of dollars in interest free money to mega rich multinational corporations, under the mere “hope that they will expand business and hire more people.” It’s an open scam, yet here is this shill, instead of zeroing in on this colossal theft from the people and promoting a policy of zero interest lending to local governments (the people themselves) with a mandate to improve their lives, he’s advising people to demand an end to monetary expansion, effectively tying a noose around their own necks.

At the other side of the ring, the PBS economist, makes it very clear what’s happening with all the money that’s currently being issued by central bankers, or rather what’s NOT happening…

Since the world is not investing in big projects as it once did — or even in small projects like home mortgages, because of the defaults of the Crash of ‘08, and for a host of other reasons — the global economy is awash in savings: the retained profits of companies and individuals who think they have nowhere to profitably invest it. Those savings wind up in banks which — and here’s the punchline — redeposit the money… at central banks like the Federal Reserve.

Since the much-maligned money explosion, post-crash, skeptics warned, again and again, that inflation was just around the corner. It never happened.
Yes, the circle is closed. The Fed has created some trillion new dollars. And almost all of it has wound up back at Fed, sitting there. Small wonder the dollar hasn’t lost three-fourths of its value, has lost almost none of its value at all. No wonder inflation is so low, Social Security’s cost-of-living adjustment has been zero in three of the past seven years. The newly created money that terrifies Terry simply hasn’t circulated through the economy at all.

Moral of the story: don’t believe everything that’s peddled by Harvard professors (or more accurately, in my experience, anything). Chances are, in a present, former, or future sense they are closely connected to Goldman Sachs or some other nefarious corporation. In other words, theirs is not honest impartial advice – they have an agenda they’re pushing, and so must be scrutinized with the utmost of care.

Of course money should not be issued unless some useful or productive project or services are required to meet the legitimate needs of the people, but to roundly condemn money creation in general, without any sort of qualification as to permit it when it helps the people, is a recipe for severe economic contraction and disaster.

The problem is not money expansion per se, but how that money is expanded “as debt, to the people, at interest to the bankers;” who that newly issued money is given to; and for what purpose.

These are the issues that must be on the top of everyone’s mind.

If people allow, or rather push, their governments to stop issuing money and abandon their duty to fund much needed public works, the rich and global banking institutions will proceed to privatize the rest of the commons at mach speed. Forget the dreaded company town of days gone by, if these policies take effect, the people will be left scrounging for a living in the company country.

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