by Gregory Mannarino
We have entered a new paradigm, one that for years I have outlined would occur, and, now, it is here: an era in which massive debt expansion, on an unprecedented scale, is taking place.
What we now are witnessing is a global takeover by the new World Central Bank, formally known as the Federal Reserve. Parabolic debt. An environment that has fulfilled the multi-decade plan of the Federal Reserve to become not just the central bank of the world, but to become the lender and buyer of last resort – its goal since its inception.
To understand central banking is simple: The more debt a central bank issues, the stronger they become. A central bank’s product is debt, period. The more debt they create, the more power they have.
Never in world history has a single institution become more powerful than the WCB/Federal Reserve is today.
The hyper-inflated global debt bubble must be fed… or else.
The debt bubble is the cornerstone of this perverted, debt-based system we have. Enormous effort, in the form of parabolic debt issuance to keep the debt bubble from bursting, must continue. We are existing in a multi-bubble environment, with mass malinvestment taking place, and all of this is 100 percent dependent on the debt bubble.
The Debt Bubble Will Burst
The fact that we are seeing parabolic debt issuance by the WCB is proof positive that the debt bubble is cracking, and it is just a matter of time before it bursts.
Hyperinflation. Why are we not seeing massive inflation yet? The answer is simple: money velocity, which is the rate at which cash moves through an economy. The global economy is dead, no money velocity, so the Fed/WCB can exponentially increase the debt with zero chance of hyperinflation at this time.
To put it another way, all this extra currency is not able to chase the same amount of goods because cash is not moving – a consequence of dead economies.
The artificial suppression of rates has inflated the mother of all bubbles, and, if history has taught us anything, it’s this: without exception, all bubbles burst, despite every effort to prevent them.
We know for certain that the debt bubble is cracking, hence the parabolic debt issuance today. It is not a question of if, but when. The bigger issue is human population, which has followed in tandem with mass debt expansion.
Below is a graph of global debt and human population. The population of the world has risen nearly in tandem with debt.
Mass issuance of debt, cash borrowed from the future, has caused an explosion in human population. In fact, borrowing cash that we do not have from future generations has created an artificial environment that cannot be sustained.
For example, let’s say you wanted to raise livestock and borrowed heavily to create an environment in which to raise them. Initially, the livestock did well, multiplying and growing. Then, for some reason, your funds dried up.
How would you be able to sustain the environment for the growing population of livestock? The answer is simple: You couldn’t, and the livestock would be culled. It is the same here. The debt bubble will burst, and, with it a culling of a large portion of the global population will take place.
The debt bubble transcends a financial problem – it is also now a human one… and the debt bubble is already cracking…
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by Gregory Mannarino