When Wall Street and corporate officers executed on their motive to deceive the public and the world into believing the “New Economy” myth, Fed Chairman Greenspan joined the great game to give it legitimacy, despite his amateur standing in technology. During the fraud perpetrated upon the American investment community, the US Treasury conspired as a clandestine participant. Secy Rubin executed the gold carry trade, whereby vaulted gold bullion fueled a massive USDollar and USTBond rally. After the stock bust in 2000, the USGovt statistical elves joined actively in the collusion. They desperately wanted to continue and further the impression that the US Economy would respond well and emerge on a robust course. Their motive is to keep foreign investors committed, who supply 45% of federal credit and about 35% of mortgage agency credit. In order to manage the ongoing task of fraud and deception, Wall Street, the USGovt administration, and the Federal Reserve saw the wisdom in altering the language of the economy and financial markets. Their motive is to influence thought and to condition the behavior of citizens, consumers, and investors.
The recent fantasy can be called the “New Macro” myth wherein gargantuan imbalances are professed not to be a problem. See the current account (trade gap) and federal deficits. This rings reminiscently from 1999, as an echo that valuations did not matter. Propaganda must once more be directed toward the masses. New definitions are promoted which pass through rose-colored glass filters. Puppeteers and shylocks are in our midst.
George Orwell provided a vivid description in his classic novel of mind control and its function to wield power, to exert control, so as to maintain social order. What follows extends far beyond Fedspeak, which was dispensed as ivory tower editorial banter, transmitted from podium megaphones to keep even many experts confused. Many are the establishment’s brandished weapons, which are wielded like bludgeons over the unwitting bewildered and seemingly blinded masses in an attempt to wish an outcome and to bully foreign bankers. Greenspan acts as the general, reinforced by countless Fed governors, analysts, and leading economists who serve like dutiful officers. They seem like many dons within the financial mafia, who enlist overnight contract hits from the oyabun within the yen-peddling yakuza in Japan.
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“legal tender is now money”Since the abandonment of the gold standard, money used inside the United States cannot pass any constitutional test. Explicit requirements are stated whereby gold and silver, or notes backed by these precious metals, are the only valid form of money. A $20 bill will surely enable you to purchase a batch of groceries, or fill your car tank with gasoline, or buy new clothes, or complete other sales. That does not mean the $20 bill constitutes money. We pay for things with money, or so we think. No. We pay with legal tender, some medium of exchange approved for brokering a transaction between two parties. In ancient times, it could have been salt. In colonial times, it could have been beaver pelts or wampum. At some progressive food coops, it could be vouchers. No, our USDollar is no longer money, and contains less tangible value than salt or pelts. It is denominated debt. The USDollar is no longer represented by gold reserves safely secured in Fort Knox or Federal Reserve Bank vaults. USDollars we spend are actually debt denominated coupons which are widely used to satisfy debts and obligations, public and private.
“credit access is now wealth”Tell any person, young or middle aged or old, that he or she has a brand new credit line of $10 thousand. Stand back, watch the reaction. Now observe the ensuing talk. It is centered on what the person now plans to purchase. Especially within the USA, economic participants extend debts by drawing upon credit lines. They do it in force, with fanfare, vigor, and enthusiasm. A new credit line of size enables people to feel suddenly more wealthy, despite no change to net worth, i.e. wealth. Opportunity seems to spring up. Ideas flow. Dreams are pictured. Unfortunately, use of that credit line comes with an obligation to pay back money to the creditor. That hardly gets in the way of spending, for most people. In fact, a more perverse common thread exists. Some people actually harbor the notion that they can always declare bankruptcy if times get tough, if things go bad, if control is lost. Bankruptcy and restructured debt is commonplace. Among the ranks of college students, fully 23% have already declared bankruptcy, a shocking statistic. We as a culture have come full circle apart from our parents and grandparents. They learned of the ravages of debt destruction during the Great Depression. Our generation celebrates debt, and abuses it to unbelievable levels. It has thoroughly confused wealth and credit access.
http://www.financialsense.com/Market/wrapup.htm
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