Global economy is a house of cards

Author: Paul Craig Roberts

While G7 leaders debate global economic risks, Paul Craig Roberts, American economist and journalist describes the real situation:

The US economy is very poor. The only jobs that the economy has been able to create for at least a decade, are lowly-paid domestic service jobs: waitresses, bartenders, retail clerks, sales clerks…The manufacturing jobs continue to decline, the professional service jobs declines, and so the kind of middle class incomes that Americans used to have are gone. Moreover, most of the jobs are part-time. So you have to hold, at least, two jobs to be able to maintain your own apartment. We now have a situation, where one half of 20-year-old Americans are living in home with their parents, because they can’t earn enough to live an independent existence, they can’t earn enough to pay the rent or their student loans.

And so the economy is a house of cards. The Federal Reserve keeps it up by propping up the stock market and by propping up the bond market, because the Federal Reserve can create all the money it wants. So whenever the stock starts to go down, they create money and buy stocks. And, whenever the bonds start go down, they create money by bonds. So they keep the prices high. They say: “Look, the stock market is good, the bond market is good – the economy is good!”. But it’s all rigged, it’s a house of cards. I think they can continue this until there is an attack on a dollar. If the rest of the world stop using the dollar to settle their international accounts, the Federal Reserve wouldn’t be able to save it. But as long the rest of the world is supporting the dollar, the Federal Reserve can continue this policy of creating ever-more dollars to support the stocking buy market.

You see…ever since the financial crisis in 2008 the Federal Reserve has created far more money, then the economy has created goods and services. So the dollar should be collapsing, but it’s not, because everyone is still supporting it. Moreover, the Federal Reserve has the bank of Japan printing money and The Federal reserve has European Central Bank.  It takes the pressure off the dollar. This is a house of cards, they can keep going, until something happens to the dollar.



Author: Augaritte

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