Posted Nov 15, 2013 by Martin Armstrong
QUESTION: How is deflation even possible when the Fed could simply throw money from helicopters or create it from thin air with computers?
ANSWER: Everyone watches only the Fed. That is just a tiny part of the economy. The Fed has done QE1-3 – there is no inflation. The economy is larger than the Fed. But the dollar is the world reserve currency so the money does not even stay in the USA – it is a global money supply and $85 billion is nothing. Then under shell #2 is the real creation of money – Congressional spending which creates money that pays interest call bonds. That is the real money supply held by banks. Then under shell #3 is the deflationary forces that is raising taxation and shutting down the velocity of money destroying jobs and the global economy. Deflation is municipal governments also defaulting on pensions. It is NEVER a simple one-dimensional game. Go ahead. Keep watching the Fed. Duck when you hear a noise behind you for it is probably the government coming to look for gold in your teeth they can give to the bankers.