According to the reports posted by the Standard & Poor’s rating agency, there were improved prediction on Monday, the 10th of June, 2013 regarding the performance of the US economy but to their utter surprise, the investors simply turned their deaf ears to this positive recovery. During the initiation of the trading market, stocks started higher, shortly after the agency raised its outlook for the soaring government debt and acknowledged the strengths of the economy. Despite such news of economic improvements, the gains were not only fickle but also modest and throughout the entire day, the market spent most of the day oscillating between small gains and small losses.
The ninth stage of America‘s Financial Endgame™ will occur when the Federal Reserve finally takes action to stabilize prices. This will not come in anticipation of runaway inflation, but after the inflation has been running at full speed and is out of control in the economy. The move to reduce the amount of new money in circulation will not happen until many poor people both domestically and internationally have seen their standard of living erode from the ravages of inflation.
The reason for this delay is because there is no political benefit to be found from keeping prices stable. Politicians only realize benefit when they can spend other people’s money to purchase favor with the people who elect them to office. Since stable prices do not accomplish this goal, they are viewed as a very low priority objective by most self-obsessed people in political office. It is true that stable prices are VERY beneficial to the economy at large, but it should be quite apparent by now that most people in political office are not the slightest bit concerned about the economy at large, unless they are able to take credit for helping it.
The third phase of America’s Financial Endgame™ is the time when America’s bond market for government debt securities will collapse. The prospect of a bond market collapse is not a pleasant one, since it will result in the retirement plans and pensions of many people being simultaneously decimated. It is the unfortunate, and inevitable outcome of unlimited debt financed spending.
There is no way to tell how much longer the world will continue to finance the US government’s spending habits, and there is no way to tell exactly when the proverbial “bill” will come due. However, it is a matter of complete certainty that the current trajectory of spending on the part of the US government will eventually lead to a bond market collapse. It is my sincere hope that these events do not unfold, but it is also my sincere belief that the current national trajectory makes it only a matter of time before they do occur.
The eighth stage in America’s Financial Endgame™ will occur when the relentless quantitative easing finally spills over into broad inflation. This will create major problems for many people who are currently living at or near the edge of poverty since inflation typically impacts commodity products the hardest, and people with low incomes must devote a disproportionately large percentage of their incomes to basic necessities such as food, energy, and shelter.
As this process unfolds, there will be many people in both the US and around the globe who find themselves in desperate circumstances. This is all but certain to lead to civil unrest and riots, which will inevitably cause large, volatile swings in the financial markets. The tricky part about this phenomenon is that it will create the appearance of stabilization, just before the ultimate collapse.
The next stage of America‘s Financial Endgame™ will occur when the quantitative easing by the Federal Reserve spills over and broadly inflates prices. This is a seminal step in the end game scenario, because it signals one of the important “turning points” where the actions being taken by the government become extremely difficult to reverse.
In the case of our current financial situation, broad price inflation is being held back by a lack of growth in private bank lending. (In contrast to rapid expansion of government debt and quantitative easing by the Federal Reserve) The result of this private contraction / government expansion has been a very slow increase in the rate of growth for total credit.