Occult Advances Menu-->  Nonconformist Library

 Introduction

America and the rest of the industrial world is currently in an economic crisis of unparalleled proportions, which will make the 1929 depression look like a picnic. This began in the spring and summer of 2000. The American public is just becoming aware of it as the result of the stock market crash of both the Dow Jones and NASDAQ in 2000. This resulted in a 6 trillion dollar asset value loss from the national economy.

The media has played down these huge losses and the America public has little understanding of its full impact. In fact for the last year and a half the government and the media have refused to use the R word “recession.” So the American public has no idea of the gravity of the situation because the media has deliberately withheld the facts.

Now the irony of the situation is that the American public was told repeated about prosperity during the seven-year tech boom under President Clinton’s two presidential terms. The propaganda of Wall Street and government statistics stated that previous boom and bust cycles were obsolete and this technological boom would continue to create enormous wealth. This raising stock market resulted in over 60% of American households investing in the stock market. Charles H. Dow, in his years of observing the stock market, made the following observations about stock market psychology when the prices are up and down. “There is always a disposition in people’s minds to think the existing conditions will be permanent. When the market is down and dull, it is hard to make people believe that this is the prelude to a period of activity and advance. When prices are up and the country is prosperous, it is always said that while preceding booms have not lasted, there are circumstances connected with this one, which make it unlike its predecessors and give assurance of permanency. The one fact pertaining to all conditions is that they will change. “ (The McAlvany Intelligence Advisor)

What is the intent of this article?

Now an article entitled Jubilee and Debt in the USA Economy in the 1997 Vol. 6, No. 6 PLIM REPORT  warned of the huge debt buildup by individuals, corporations and USA government. It stated that the outcome would be a depression greater than the 1930’s and that the only way out of this calamity is to call a Jubilee (All debt forgiven) as Yahweh required of Israel under the Law every seven and fifty years (Lev. 25:8-17). Now this will not solve the problem as the wicked Federal Reserve Bank (not a part of the U.S. government) creates money and credit not backed by gold or silver.

This article will focus on the American consumer debt and its effect upon the American economy. This article will show that four years later the situation is not any better, but it is much worse when you examine the statistics. There are only two solutions here The Federal Reserve can use massive inflation to prevent a economic collapse where it will take $10,000 to buy a loaf of bread or there will be a massive depression on a larger scale than the 1930’s where there is no money.    

What makes up the American Economy?

Now the American consumers represent two-thirds of the America economy where the other third is government and corporation spending. So if there is a cutback on consumer purchases due to uncertainty about job security or layoffs, the American economy will go into a recession. Now the economy is predicated on continual consumer spending. In short, it is the consumers’ perception of the future that causes them to open their checkbooks and spend, or to close their checkbooks and reduce spending. It is the psychological impressions of the consumer that determines whether the economy is in a recession or has prosperity.

 Consumer Debt

One of the biggest hurdles facing the American economy is consumer debt. The current debt of consumers is $2.2 trillion as of the first quarter 2001, which includes credit cards, mortgages, and car loans debt. This debt averages out to be $12,000 for each household of which $8,000 is credit card debt. 

What matters worse is that interest has to be paid on this debt. Now interest paid on this debt reduces consumers’ ability to make new purchases, which places a drag on the economy and contracts it further, compounding the problem

Newsweek magazine in their 8/27/01 cover article offers a bleak outlook.  “Sixty percent of American families actually spend more than their after-tax income while consumers spend $50 billion more than they earned in April alone. Even more astounding is the fact that 32 million families (i.e. 80 million people) run an annual average deficit of $8,160. These people are exhausting their savings, selling off their investments, and still running huge debts. It will take very little to push them into bankruptcy. For many, just a few months out of work or with reduced income will do the trick.”

With increase bankruptcies, raising unemployment and an economy that is slowing down, this causes consumers to use their credit cards less and drastically cut all forms of borrowing.  Now these consumer cutbacks have tremendous implications on the economy and the Federal Reserve Bank.

Most Americans have no idea how money is created in the American economy. Without the consumers and corporation borrowing, there is no new money created, which an expanding economy needs and the only money in existence is checking and saving accounts and investment accounts. In short, there is no money in circulation if there is no debt created.

What does this mean? The McAlvany Intelligence Advisor states the Federal Reserve Bank’s worst fear. “The Fed’s greatest fear is that at some point the consumer may stop borrowing, that he (or she) may slow down or stop their spending, and start saving. Everything the Fed has done both financially and propaganda wise in recent years has been designed to keep the public spending, borrowing and not saving. It has been the Fed’s only way of perpetuating the bubble, which it created.”

Now consumers are up to their eyeballs in debt and there is no way to correct this situation except for massive personal bankruptcies or allow time for the consumers to pay down their debt. Both scenarios mean that the prospect of the economy is a downturn.

Occult Advances Menu --> Links Directory