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We’ll Pay All Those Future Obligations by Impoverishing Everyone (How to Destroy Our Currency In One Easy Lesson)

We’ll Pay All Those Future Obligations by Impoverishing Everyone (How to Destroy Our Currency In One Easy Lesson)

The only way to pay all these future obligations is by creating new money.
I’ve been focusing on inflation, which is more properly understood as the loss of purchasing power of a currency, which when taken to extremes destroys the currency and the wealth/income of everyone forced to use that currency.
The funny thing about the loss of a currency’s purchasing power is that it wipes out every holder of that currency, rich and not-so-rich alike. There are a few basics we need to cover first to understand how soaring future obligations–pensions, healthcare, entitlements, interest on debt, etc.–lead to a feedback loop which will hasten the loss of purchasing power of our currency, the US dollar.
1. As I have explained many times, the only possible output of the way we create and distribute “money” (credit and currency) is soaring wealth/income inequality, as all the new money flows to the wealthy, who use the “cheap” money from central and private banks to lend at high rates of interest to debt-serfs, buy back corporate shares or buy up income-producing assets.
The net result is whatever actual “growth” has occurred (removing the illusory growth that accounts for much of the GDP “growth” this decade) has flowed almost exclusively to the top of the wealth-power pyramid (see chart below).
2. Much of the “growth” that’s supposed to fund public and private obligations is fictitious. Please read Michael Hudson’s brief comments for a taste of how this works: The “Next” Financial Crisis and Public Banking as the Response.
The mainstream financial media swallows the bogus “growth” story without question because that story is the linchpin of the entire status quo: if it’s revealed as inaccurate, i.e. statistical sleight of hand, the whole idea that “growth” can effortlessly fund all future obligations goes up in flames.

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