The Greater Depression

The huge bail out passed by the US government in an attempt to stave off disaster and a possible depression will not work; why would the same thing that brought us here now get us out of it? Not gonna happen

What brought us here is the easy money policy that the US has practiced for years, and as we all know too much supply with not enough demand leads to failure. There is just too much US currency (IOU) in the world and none of it has any fundamental backing. The US is headed for failure and life as we know it will never be the same in our lifetime.

In the great depression the government did not provide liquidity quick enough, according to the “experts”. Now they are acting very quick and injecting as much as is needed. However, IMO, the end result will be the same.

By not acting quickly enough, it is claimed that credit came to a halt and the financial markets and economy halted during the great depression. Now, the pundits say that we need to inject liquidity as quickly as possible to avoid the same thing happening. There is however one big problem with that:

0% liquidity – 0% inflation = 0 (great depression)
10% liquidity – 10% inflation = 0 (currently)

The bottom line is that no matter how the US Fed or government slice it or dice it; it amounts to the same thing.

For those who may not understand inflation I will express it as I see it:

Inflation is not the increase in price of goods, instead, that is a result of inflation. In fact, there is only one kind of inflation and that is monetary inflation. Any increase in the money supply without any backing amounts to the roughly the same amount of inflation.

Therefore, in the great depression people had little money but it was probably worth something because of deflation. However, now people will have money or access to it because of an increase in the M3 supply but it will probably not be worth as much as it did during the great depression because of monetary inflation, possibly leading to hyperinflation. We will then end up in the same place at best and the current crisis will come to be known as the greater depression.