Wednesday, March 18, 2009

U.S. Fed prints money - economy will not revive

The U.S. Fed is expanding the money supply

The U.S. are trying to drown their nation in debt. The GDP of the U.S. is 14 Trillion U.S. Dollars. The Fed is creating a Trillion dollars which will be made available to private and business which they can borrow. This means an expansion of the money supply of 7 percent against GDP.

It remains to be seen whether the public will actually be foolish enough to borrow more money. The experience of Japan in the 90ies showed that the public preferred saving over spending in a similar situation.

But that will mean that the U.S. economy will continue to stagnate.

Thrifty Continental Europe

The situation in Europe is not too different. Kindly read an earlier post on UK money printing and interest rate slashing here.

The Anglo-Saxons have built up huge debts to finance their decade lasting spending spree. But European nations, which were thrifty saving up money and lending it to the Anglo-Saxons are in stagnation. The Anglo-Saxons at least had a party before the hang-over....


The causes of the economic stagnation are for a considerable part demographic. As European and American societies are reproducing below replacement rate, the population is aging rapidly. The economic base of the welfare state is shrinking. High immigration is seen as a solution by the political classes, but in reality the third world colonists are an enormous drain on said shrinking public purse. Many of the immigrants are not working and if they are working they earn on average far less than indigenous population. They use up more public means than the indigenous. Think of high consumption of medical care, police, benefits, higher per capita educational outlays. The average net earnings of the total population (indigenous plus immigrants) are decreasing at the same time as the public expenses increase.

The blindness of the political class

The political class can not see the predicament their nation is in because they have outlawed reporting unfavourable facts and analysis and if it were reported to them they would refuse to grasp it as their liberal worldview makes it EVIL to form thoughts that are illiberal.


George Orwell showed in his book 1984 how the the ruling party or Inner Party creates Newspeak. Newspeak is political correctness. The objective of Newspeak is to make political thought that disagrees with the ruling party's ideology impossible, because the language has been so degraded that nobody can form an alternative point of view anymore.

The memory hole. The memory hole!

George Orwell was a Trotzkyite Socialist. He thought the attempt by the Inner Party could be succesfull. It never occurred to him that when the Inner Party had impaired its ability to orient itself on reality by creating a false ideology reality would intrude on society in a vicious way. He believed that the Inner Party was powerful enough to use the media to such an effect that any changes to reality would be cast down the "memory hole".

The ability to react by an ossified social system

But how do you hide double digit unemployment and a decade of economic stagnation from the public and the party faithfull? What if the Inner Party, ossified by decades of unchallenged rule and exclusive reliance on bureaucratic process loses its faith and self-confidence?

Western Governments, bankers are frantically pushing their controls in order to revive the economy, which is the only prop of the present social system. But nothing is happening......the system does not respond. It will be a long time before it does.

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