The Fed Needs Your Help
It’s hard work keeping an asset bubble inflated. This is the biggest one in human history. The Fed needs your help. And you’re not doing your part.
For starters, you can’t go hoarding cash every time you get worried. The Fed tried to make this clear by pulling large bills from circulation.
$10,000, $5,000, $1,000 and $500 bills went out of circulation in 1969. The $100 bill is the largest denomination today. Those are for foreigners.
The Fed estimates 80% of $100 bills are overseas. 60% of all bills are overseas. It wants foreigners to hold savings in dollars, not you.
Granted, most of you are cooperative. Branding cash as only something a criminal would need mostly did the trick. The average young person has $10 in their pocket and keeps the rest on plastic. That’s easier to control.
Hoarding cash in a savings account keeps it in the banking system. That used to be good. Now it’s a problem.
Every time there’s a crisis, you can’t go stuffing cash into the bank. That takes it out of the money system. This asset bubble can’t shrink. The walls start shaking. Things fall apart quickly.
According to Bloomberg Professional Terminal, through May this year, there have been 99 major bankruptcies. That’s in line with the average annual level of bankruptcies and we’re only five months into the year. It puts the U.S. system on track to top the number of bankruptcies in 2008.
Airlines, cruise ships, rental car companies, department stores… they’re levered to the hilt. If spending slows, they’re doomed. The system can’t handle defaults. They’ll expose the true value of assets. That blows up the whole thing.
…click on the above link to read the rest of the article…
