By Gregory Mannarino TradersChoice.net
What do we know? Every single modern economy is based upon the same premise, which is an economic model based solely upon the mass and exponential expansion of debt.
Most people have no understanding whatsoever of what a debt based economic model is or how it works—even though they contribute to its function every single day.
At its core, the debt based economic model demands that more and more debt be pulled and borrowed from the future in greater and greater amounts just to support the current environment. At the very moment we stop borrowing a single dollar from the future, the entire system collapses.
I will ask you to reread the preceding sentence.
“At the very moment we stop borrowing a single dollar from the future, the entire debt-based system will collapse.”
The fiat monetary system is debt based and cannot function without continually and exponentially expanding the debt. The debt based economic model is massively inflationary and is the sole reason why we have witnessed the purchasing power of fiat currency literally evaporate since the inception of the debt based economic model.
The debt based economic model is also responsible for the gap that exists, and continues to grow, between those that have, and those that have not. With a debt based economic model wealth is merely moved from one group of people to another, and today more than any other time in history, we are witnessing this phenomenon manifest itself in the development of a new feudal system.
Every single developed nation on Earth has chosen to adopt a debt based economic model to control the flow of wealth, and transfer of wealth, from one group of people to another. On a macro scale entire nations become debt slaves to their central bank, and on a micro scale individual people also become slaves to the issuing central bank.
When an individual goes to work to earn money, what are they really doing? It’s simple, they are working for the privilege of being issued an IOU. Here in the United States, every single dollar bill in whatever form it may exist, digital or printed, is owned and owed back to the issuing central bank plus interest that the central bank creates out of thin air. The bills issued by a central bank are simply held by individuals as IOU’s, the individuals do not own the bills that they work for.
Many people are worried, and rightly so, about the vast expansion of the debt, but the fact of the matter is, none of this debt is ever meant to be paid back, it is only meant to be expanded upon.
Today, global debt continues to surge at an unprecedented pace, and this mechanism will continue. As a deliberate side effect, the purchasing power of fiat currency will continue to diminish.