To Hide A Hyperinflation - Part 1 by Jeff Nielson
https://www.sprottmoney.com/blog/h-to-hide-a-hyperinflation-1.html
By Jeff Nielson
Regular readers can automatically answer that question. We see the hyperinflation in the chart below: the exponential increase in the U.S. monetary base (i.e. its supply of money). Both the shape of the curve and the quantum of the total increase shriek “hyperinflation”.
“Inflation” is an increase in the supply of money. This is the universally accepted economic definition for this term. What most people think of as “inflation”, the serial increase in the price of goods, is merely the inevitable consequence of inflation – inflating the money-supply.
If “inflation” is an increase in the supply of money, and the U.S. supply of money has increased literally at a hyperbolic rate, then by economic/mathematical definition, the chart above represents hyperinflation. Case closed.
Or is it? Where is the massive price-inflation, which readers have just been told is an “inevitable consequence” of this hyperinflation? Part of the answer is that this hyperinflation has been hidden, and thus the price-hyperinflation has been delayed. The other part of the answer is that, historically, actual “hyperinflation”, meaning a currency officially plunging-to-zero, is “a confidence event.”
What this means, is that history tells us there is always a lag between the time a currency has been hyperinflated (as we see above), and it actually loses all official value as a medium of exchange. The length of that lag represents the amount of time which the Chumps using this worthless currency can be deceived into believing that it is not worthless.
With respect to the U.S. dollar, which as shown above is now worthless-by-definition, this deceit is the culmination of a multi-decade program of fraud and manipulation, along with the saturation propaganda from the Corporate media that the U.S. dollar is a “strong” currency. Tell a Chump, every day of his life, that the U.S. dollar is “better” than the other (worthless) currencies, and it will take a long time for such a Chump to see/understand the Truth.
Now for specifics. What’s the first and most-obvious way to create the illusion that a worthless currency is a “strong currency”? Manipulate the exchange rate higher, through brute-force, criminal manipulation of foreign exchange markets. U.S. and European Big Banks have now been convicted of serially manipulating the USD (higher), going back to at least 2007.
The mystery here is not that the Big Banks (and primarily U.S. Big Banks) have been caught serially manipulating the dollar for at least the better part of a decade. The chart above proves that a crime of this nature must have been taking place. The “mystery” is that with these banksters engaging in this serial crime, in a market which trades in the trillions of dollars per day, how could it possibly have taken eight years for U.S. and European prosecutors to “notice” this ongoing misconduct?
The answer is that it couldn’t take that long. Rather, what this represents is that after these Big Banks had been serially manipulating this market for 8 years, it was no longer possible to cover up such massive, systemic crime. Indeed, currency manipulation has been one of the Big Bank’s favourite forms of economic terrorism while this “investigation/prosecution” of Big Bank currency-rigging was taking place.
First it was the Indian rupee which was attacked via market manipulation, and had its exchange rate taken to “record lows”. Then it was the Russian ruble. And these are only the major currencies which have borne the brunt of recent economic-terrorism-via-currency-manipulation. For another example; just have a look at Venezuela’s currency, another obvious target of U.S./Big Bank terrorism.
But currency manipulation is only one of the ways in which the Big Bank crime syndicate, Federal Reserve, and U.S. government hide U.S. hyperinflation, and thus the fundamental worthlessness of the U.S. dollar. The second plank in this campaign of crime is to fake “demand” for U.S. dollars.
The primary vehicle for this branch of crime is the massive, serial fraud which takes place in the U.S. Treasuries market. For readers not familiar with the fundamentals of the bond market, here is a brief overview.
The “price” of a bond is directly/inversely proportional to the interest rate on that bond. As the interest rate rises, the price declines, and vice versa. The interest rate on bonds which trade in global markets (such as U.S. Treasuries) is supposed to be a direct function of the “risk” associated with that debt.
Specifically, the greater the risk of default, the higher the rate of interest which is supposed to be demanded on that bond, by the lenders in the marketplace who finance that debt. Officially, the U.S. government is the most-indebted nation on the planet, with a “national debt” of roughly $18.5 trillion.
The U.S. pretends to have a total national GDP of $16.75 trillion, though several of those “trillions” are nothing but smoke-and-mirrors, economic fudging. Yet even officially, the U.S. is already well past the 100% debt-to-GDP level which signifies a “debt crisis” (and massive interest rates on its bonds). But the real story in this endemic fraud is the U.S.’s “unofficial” debts/liabilities.
As calculated by a former economic advisor in the Reagan administration (and now university professor); U.S. debts-and-liabilities exceed $200 trillion – not (a mere) $18.5 trillion. The greater than 1000% difference between these two numbers is based on massive accounting-fraud by the U.S. government, whereby it (officially) has converted $trillions of its debts into “liabilities”.
It is precisely to prevent accounting-fraud of this nature that all U.S. (and Western) corporations are required by law to report their debts-and-liabilities as a single number, via the “GAAP” accounting principles which are a universal standard in the world of accounting, except for our governments. By those universal standards, the U.S. is not merely insolvent, not merely bankrupt, but absurdly bankrupt.
It has only been able to ward-off a formal declaration of bankruptcy (already) via systemic accounting fraud, which would have resulted in criminal convictions if the same fraud had been perpetrated by a corporation. The accounting-fraud of the U.S. government makes “Enron” look squeaky-clean, by comparison.<
U.S. Treasuries are worthless, the massive debts of a completely/ridiculously bankrupt entity. This directly and necessarily implies that the interest rates on these fraud-bonds should be near infinity. Instead, we saw U.S. Treasuries recently trade at a “negative” rate of interest.
What we are supposed to believe is that some “lender” paid the U.S. government for the privilege of loaning money to the most-bankrupt entity in the history of nations, and this does not even account for the (supposed) lender’s future losses, as “inflation” further erodes the value of the bond. The only thing greater than this fraud, itself, is the insanity which the Corporate media, bankers, and U.S. government are attempting to peddle to us here.
How is this fraud perpetrated/financed? More fraud, of course. There are no “buyers” for U.S. debt, in such multi-trillion dollar quantities. Of all the potential buyers on the planet (primarily sovereign governments), most have no available funds to purchase these fraud-bonds, even if they weren’t worthless.
Of those few, remaining nations which have actual “surplus” funds to finance such purchases (like China), most have already voluntarily ceased any/all Treasuries buying. Indeed, at the same time we have seen the ultimate fraud of “negative” interest on U.S. Treasuries, the largest holder of these fraud-bonds, China, has been dumping Treasuries, in the hundreds of $billions.
Is there any way that the price for U.S. Treasuries could rise (and the interest rate fall) while the largest, foreign holder of those Treasuries, was dumping these fraud-bonds, in unprecedented quantities? Of course not. In any quasi-legitimate market; this would have caused Treasuries prices to plummet, and the interest rate to spike – even if these fraud-bonds were not already, obviously worthless.
How does the US government or the Federal Reserve prevent the US treasuries market from actually functioning like a "market"? It's actually mind-numbingly simple. The Federal Reserve counterfeits US dollars by the trillions and uses this illegal currency to buy up the entire supply of treasuries.
Then comes the money-laundering, where the U.S. government foists these worthless bonds onto the books of its lackey accomplices: governments like Belgium and Japan. Supposedly (i.e. officially), the government of Belgium was devoting its entire, national GDP over a span of several months buying these (worthless) U.S. bonds. For those readers who find this “reality” implausible, there is only one, other, possible explanation: institutional money-laundering, on such a massive, systemic scale that it requires the participation of sovereign governments.
Then comes the money-laundering, where the U.S. government foists these worthless bonds onto the “books” of its lackey accomplices: governments like Belgium and Japan. Supposedly (i.e. officially), the government of Belgium was devoting its entire, national GDP over a span of several months buying these (worthless) U.S. bonds. For those readers who find this “reality” implausible, there is only one, other, possible explanation: institutional money-laundering, on such a massive, systemic scale that it requires the participation of sovereign governments.
