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July 11, 2019 | Does Debt and Deficits Matter (for USA)?
Don Swenson
Think about this situation called debt and deficits. America’s trade deficit is now over $886 billion (up some 34 fold since 1980). America’s national debt is now some $22.5 trillion (up some 25 fold since 1980). It appears that America can live off the world system of production indefinitely. Or is there a limit to this trend?
America has a currency which allows them to purchase goods and services from all parts of our world with no real consequence (as of yet). America buys, spends, and increases its DEBT and DEFICITS with no apparent consequence. This has continued for over 45 years and many now think this can continue indefinitely.
Most nations must watch their spending and most nations must balance their international books. America, however, does not need to balance their books as they can buy/spend by merely adding more ‘numbers’ called money (debt) to the existing pile of debt. This has been our MO since the 1970’s. Why this advantage?
America is essentially the banker for the planet. Our dollar is the prime reserve currency for the planet. Our central bank is the prime institution which monitors all banks on our planet (via their dollar swaps, lending operations, derivative operations, etc.). America can sanction nearly anyone via the Swift payments system which is mostly under American control. Amazing!
We now live with a digital/virtual/cyber economy which was mostly initiated by America (after the last financial crisis). American monetary operations are key to balance of trade issues for nearly every nation. I would call America the BANKER for the planet. All this has evolved (mostly) since the end of WWII and the end of the Bretton Woods Monetary Agreement (1971). America is KING of the monetary hill (for the time being).
Can anyone sanction America? Can anyone create an alternative to America’s dollar system? Can anyone refuse to sell goods and services to America? Who can challenge the American monetary empire (today)? At the moment there is NO-ONE. Russia can’t challenge America’s monetary might. China can’t challenge America’s monetary might. Europe can’t challenge America’s monetary might. Money rules this planet and America is MONEY!
It appears that the ONLY way America’s monetary might will be challenged is via a global monetary CRASH. A stock market crash, a derivative market crash, and an asset value crash. Since all money is now INNER (within our consciousness) this coming CRASH would be an INNER crash of historical levels. Cyber money lives within us (our inner extended consciousness). This means that a crash in investor ‘confidence’ could bring America to its knees.
Computer algorithms have (give) no allegiance to any nation or any banking system. These algo’s (operating spontaneously at the speed of light in real-time) could create a FLASH CRASH in a matter of minutes which then could create a domino effect globally. All the monetary might of America and her banking system could not prevent this type of CRASH (given the nature of today’s cyber markets). Algo’s could do the damage without any human input or even awareness!
A cyber crash is silent and could happen when a threshold level of negative trading emerges (remember algo’s are mostly preprogrammed). Selling short is one type of negative trade done by an algorithm. Mass selling of select corporate giants (say the Dow 30) could also create this coming cyber CRASH. The selling could spread globally in a matter of minutes. Algo’s now trade some 75% of all markets (give or take).
We live with a machine driven market which is global in scope. Money is now a cyber number (imaginary/virtual). Trading is now mostly via algorithms and via automated programs/platforms. All markets are inter-connected and we now live with some 65 major electronic exchanges (globally). Asset values get created and destroyed in milliseconds as algo’s trade our markets (buying and selling).
Money today is essentially imaginary/virtual/inner. Nearly all finance lives within our collective consciousness. Look all around you for some physical evidence of money flows. I can observe NONE. I can see NONE. I can feel NONE. Today, our money is within ‘cyberspace’ and lives within our extended consciousness. Computers circulate all this cyber money. Are we living in heaven or what?
If money is now cyber/virtual/inner and our consciousness is inner, than where are we living monetarily? It appears we are living in a monetary ‘heaven’. I need to LOOK to my ‘inner’ self for evidence of where my money lives. Virtual money is replacing all prior physical money (paper and coins). We are evolving into a cashless world economy. So what is ‘virtual’ money? Is it inner? Is it living within my consciousness?
I think we are living within a spiritual universe monetarily. Few discern their own consciousness. Few discern the nature of our monetary system. Central banks try to monitor and manipulate this cyber machine driven system. But their control is limited. Algo’s could spoil their control in a matter of seconds. Speed of light trading could spoil their control in a matter of seconds. Negative shorting of the markets could spoil their control in a matter of minutes. A domino effect could emerge in a matter of minutes.
All seems positive as I write this missive. Our cyber markets are going up and up. Asset values are going up and up. Debt and deficits are going up and up. American sanctions are being applied to more and more nations and individuals. It’s all working for America as I write. But all is temporal and ephemeral when we understand the underlying issues. All could END suddenly and silently!
Prepare for major change in a few days, weeks, or months. An ‘inner’ market system is subjective and temporal. It could come tumbling down with a change in emotions. Emotions rule all our markets. As I write all is calm and copacetic. We will need to watch events to discern when a change in these investor emotions happens. And the silent ALGO”S could go into operation at any moment. Only God knows when the plug will be pulled. Enjoy for now!
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Don Swenson July 11th, 2019
Posted In: Kingdom Economics
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