interesting rates 2 of 2

INTERESTING RATES 2

Truth Never Told over at YouTube had an as usual interesting video on interest rates:

https://www.youtube.com/watch?v=3zwGkR1CzYM

As good as their content usually is, I don’t know if I really agree with the basic premise of the interest rates being political. Or that somehow raising them is dangerous now but not for the last three years.  I mean, really?  Supposedly the rates were low to benefit the Obammy administration?  The central banks own the President.  There is even rumors of the Trump bailout in the 90’s being funded by your good tinfoil hat wearing buddies the Rothschild’s. 

*

Or that the central bankers profit while there is Blood In The Streets.  Granted, bankers do actually profit off of war and death, as do empires, and the banks can in fact profit off of the coming collapse, true.  But only up to a certain point, at which time their five century long profit paradigm collapses along with the global economy. You know, that Growth Uber Alles paradigm.  Growth is already over and done, leaving contraction despite the cheerleading headlines a complicate media lapdog industry reports.  If the bankers suffer from lack of growth ( as does the government-check out the fiscal health of your nearby pension fund ), is this a profit move or a desperate survival bid?

*

As our central bank began raising interest rates three years ago, you might have noticed foreign entities are starting to go tits up.  Places like Venezuela and Argentina and such.  Interest rates are far from the only reason there is economic contraction.  There are bigger issues such as freefalling energy BTU’s, drops in commodities to China, a global triage of energy, overcapacity and mass unemployment and etcetera.  But on top of all that, jacking up the loan interest rates to foreign nations does them no favors.

*

 It is our central bank ( as if it is “ours” as they are sovereign.  Just shorthand for its nominal physical location ) administering a coup de grace.  A further triage in a shrinking energy environment.  But screw those fuzzy foreigners, you justly cry out in shock and anger that I would actually care about their carcasses bouncing out the back end of the speeding bus.  True.  How is this going to effect US as in the U.S.?  Well, the end game is easy to see.  Economic collapse.  Because every single cheese dingus out there is so over indebted that once interest rates get too high, no one can take out more loans.

*

Yet getting new loans to pay off the old loan payments ( just loans for the interest costs, not even the principle ) is how a great many of our businesses have already stayed afloat.  Back when interest rates were lower.  How are they supposed to keep getting new loans?  I don’t worry about the fracking industry.  I’ve thought the whole time they were subsidized.  The spice must flow, regardless.  If the companies can’t take out new loans the bankers will create more stock and purchase it, or however that scam works.

*

Here is my worry.  The banks are desperate, and by my Best Educated Guess it is because their overleveraged derivatives bets are already unravelling.  So they jacked up interest rates to squeeze every entity they could.  The ones they don’t care about, such as the Argentina government or the Illinois State government.  But everyone suffers from the interest rate hikes after nearly a decade of essentially free money ( the second Kick The Can, after the propping up of the other western aligned central banks ).

*

The people running the company that employ you, for instance.  Rut Row, Scooby.  It isn’t just about the housing bubble popping this time.  That industry is banker controlled and you won’t see that leading to the collapse next time.  It will probably be from Sovereign Debt collapse.  Such as how Germany’s biggest bank is way overexposed to Greek debt.  Right, keeping raising the interest payments and you’ll see the first failures of all those derivatives bets.  Remember, it takes less than one half a percent of bets gone bad to bankrupt the company that holds that derivative.

*

This is not to say that the banks don’t paper over their loses with currency creation.  They can and do.  But you can’t paper over bankruptcy unless you can print money, and you can only create noninflationary money when you have excess energy backing the creation of said money.  If there are enough companies defaulting on their derivatives bets, the central bank prints that over.  But now the printing is becoming more inflationary.  And you can’t keep printing forever because of a little problem called credit and trade.  Everyone needs credit to facilitate trade.  They won’t trade for worthless currency.

*

You’ll notice Russia and China bartering.  This isn’t just to help defeat and crush the PetroDollar ( which is another factor in our economic mess, but there is no need to diverge here ).  It is also insulating them from inflation that the western banking world is sharing in right now.  When everyone trades for bills of lading, in effect accepting differed payment for 90 days, you need a sound credit system to make that work ( when the bakery gets flour on credit, it is paying back the flour with customer sales. That is everyone, globally ).  Inflate too much and that trade breaks down.

*

So banks aren’t THAT free to inflate at whim and crush economies. They need most economies to remain functional to keep the economy lurching along.  The fact that they ARE inflating too much and hence forcing whole countries out of the global economy means they are much more desperate than we think.  It is triage for survival rather than just for profit.  To me, interest rates rising means full blown panicky desperation on the parts of the bankers.  I could be wrong, and as usual overthinking things.  By all means, bet against my pessimism.  I’m sure that will work out well for you long term.

( .Y. )

( today's related link https://amzn.to/2IJzV4d )

*
note: free book.  I read this zombie book AFTER the same authors PA book, he is that good https://amzn.to/2CNBUEI .  
*

Please support Bison by buying through the Amazon ad graphics at the top of the page ( or from www.bisonbulk.blogspot.com ). Or PayPal www.paypal.me/jimd303 

*** Unless you are in extreme poverty, spend a buck a month here, by the above donation methods or mail me some cash/check/money order or buy a book. If you don't do Kindle books, send me the money and I'll e-mail it to you in a PDF file.  If you donated, you may request books no charge.  
*** My e-mail is: jimd303@reagan.com  My address is: James M Dakin, 181 W Bullion Rd #12, Elko NV 89801-4184 ***E-Mail me if you want your name added to the weekly e-newsletter subscriber list.

*** Pay your author-no one works for free.  I’m nice enough to publish for barely above Mere Book Money, so do your part.*** junk land under a grand *  Lord Bison* my bio & biblio*   my web site is www.bisonprepper.com *** Wal-Mart wheat***Amazon Author Page
* By the by, all my writing is copyrighted. For the obtuse out there