Read on Twitter
I& #39;ve stumbled onto a major economic conspiracy, Mack. How about that for stress? The US is being bled like a stuck pig, Mack, and I& #39;ve got a paper trail to prove it. Check this out:
Take a look at this! That right there is the M3 US money supply. Can we talk about the M3 US money supply Mack? I& #39;ve been dying to talk about the M3 US money supply. In the simplest possible terms, the M3 money supply is the total amount of cash floating about in the economy.
Look at that YUGE spike in 2020. More money was created between Feb-June 2020 than was created between 1997-2003. That& #39;s a LOT of money, guys. Now what happens when we print a shitload of money in a very short space of time?
We get a pretty crippling devaluation of the currency in question. In this case, it& #39;s the USD. The reserve currency for the world. The ugly green paper that keeps the global economy moving. There has never been an expansion of the money supply like this in American history.
Why did this happen? What does it mean to devalue your currency by such a large amount? Well, the COVID-19 pandemic has caused a pretty hefty economic contraction in the USA. The US economy is flat-lining, and the Federal Reserve is just fucking pouring Narcan into its veins.
Originally I was going to tweet that the FedRes has had to get creative in their ways of dealing with this crisis, but that would be a lie. They& #39;re using the same playbook from 2007-2008, it& #39;s just that now they& #39;re going into overdrive...
Some of that money creation went towards your stimulus packages. Pretty much everything else went into buying bonds and securities of financial institutions and the enormous corporations that keep all the bubbles floating the economy from bursting.
One of the downsides to such a huge increase in the money supply is that the USD has been devalued over a very short period of time. If you earn your wages in American dollars, you should be MAD. The US government has explicitly sold you down the river so the rich can get richer.
This, coupled with the banking sector no longer being required to keep a single cent of your deposits in hand and the imminent collapse of a huge number of businesses in receipt of FedRes handouts, is the perfect storm, and that perfect storm is nearly at your shores, America.
There is very, very little the Federal Reserve can realistically do at this point to prevent a catastrophic devaluation of the USD in the best case scenario. The worst case scenario is the collapse of the global monetary system and hyperinflation in the USA. (See my pinned tweet)
Let me throw some stats at you now:
The Federal Reserve has increased it& #39;s balance sheet by 600%
There has been a resultant 32% increase in wages.
It therefore takes $16 of Federal purchases to create $1 of wage growth.
Lousy.
The Federal Reserve has increased it& #39;s balance sheet by 600%
There has been a resultant 32% increase in wages.
It therefore takes $16 of Federal purchases to create $1 of wage growth.
Lousy.
There has been a 76% increase in post-tax corporate profits.
It therefore takes $7.80 of Federal purchases to create $1 of profit growth.
Significantly better result for the capitalists, but still lousy.
It therefore takes $7.80 of Federal purchases to create $1 of profit growth.
Significantly better result for the capitalists, but still lousy.
Only when the media portrays this fiscal stimulus programme through the lens of the stock market, can it be viewed in any way as positive. The stock market has returned about 127% of its 2007 peak. Corporate revenue growth is about 6.5x what it was in the same period.
None of this money will trickle down to the likes of you and I, of course. It never does. Meanwhile, the US private sector seems literally unable to survive without these perilous government handouts anymore.
As the excellent @grossmanite has recently pointed out, US government spending as a share of national GDP was 43.73% in 2007. Currently, that number is 35.14%, but after a decade of reprieve, it looks now as though that share will increase exponentially.
