by Gregory Mannarino, TradersChoice.net
We are in the midst of the largest debt creation cycle in history. In fact, in the past 12 months, the current debt expansion cycle, with regard to world central bank balance sheets, has surpassed the last CENTURY of central bank debt creation combined. So, what is behind this?
First, one must understand the current economic model. The “standard” model, the basis for which modern economic models and henceforth their economies are based, is 100% dependent on the creation of more debt. In other words, the current economic models run by central banks DEMAND that every second of every day, more debt is created exponentially to function.
The process of expanding debt creation by central banks, by design, is perpetual. Therefore, it cannot ever stop. If a central bank stopped issuing more debt, even for one second, the entire debt-based system would immediately collapse.
Central banks have one, and only one product: debt. Every dollar, every euro, etc., created by a central bank is a unit of debt. Moreover, these “notes” they issue belong to the issuing central bank plus interest, which they create out of thin air… the definition of central bank debt issuance is a Ponzi scheme.
A Ponzi scheme is a fraudulent investment enterprise that relies solely on the introduction of new capital being put into the fraud, in an ever-expanding mechanism, giving the scam an illusion of generated truth. But, the real truth is it’s all just a con. The problem with every Ponzi scheme is they eventually run out of money.
Today, we are witnessing a phenomenon: a debt expansion/debt issuance scheme that has gone literally parabolic.
Why is this? The answer is simple.
We understand that central bank debt issuance is perpetual and ever-expanding, which means that to maintain the current environment, more debt must be created in ever-expanding amounts.
We also understand that the central bank debt issuance system is a Ponzi scheme, and all Ponzi’s eventually fail. Because every Ponzi requires more capital/debt to be introduced into the system, today, central banks, none more so than the Federal Reserve, must create epic sums of cash to prevent the Ponzi from imploding.
The current central bank debt-based Ponzi is only functioning because the Federal Reserve is creating parabolic debt. The Fed is printing parabolic debt to push off the eventual collapse of the debt-based system, which is known as a “credit freeze.”
A credit freeze relating to the economy occurs when the central bank Ponzi implodes, and all transactions stop. No cash available is in the financial system, personal bank account balances go to 0.00, ATMs do not work, businesses cannot lend to each other, and debit and credit cards do not work.
A credit freeze is a total collapse of the debt-based Ponzi. A credit freeze is a crisis of the debt/currency, and the sole reason why central banks worldwide are now issuing parabolic debt is to push off, for as long as possible, the end of their Ponzi scheme.
