SUBJECT: SIX TIME BOMBS TO ECONOMIC COLLAPSE September 8, 2019 by Dave Pollard (Edits, Greg Varley, Retirement Partners) 1. This economy is built on faith in perpetual growth: Faith that rapid and accelerat- ing economic ‘growth’ can and will somehow continue indefinitely, so that investments in the future will continue to make sense. If that faith is shattered — if people begin to doubt investing in stocks, bonds, loans, real estate, commodities, and that businesses will not yield a positive return commensurate with the risk — then the market value of those goods and securities will crumble, in some cases (like with stocks) to zero. No one will pay money for common stocks, which are the riskiest and lowest-ranking in the case of insolvency or bankruptcy securities, unless they believe that the present value of future cash flows exceed the current price. That means the price is hugely vulnerable to changes in perceived future cash flows and to perceived risk. There have been many recessions and depressions precipitated by nothing more than just such a change in perception. And to some extent, changes in perception can be self-fulfilling. 2. The value of ‘fiat’ currencies is built on faith: the currencies on which our economy is dependent no longer have underlying collateral other than the ability and willingness of the issuing government to redeem them at face value. These governments have incurred colossal levels of indebtedness and the annual deficits and accumulated debts levels are accelerating every year. Guess what the acceptability and continu- ance of such debt levels are based on? The ability of future governments to increase revenues, based on accelerating personal incomes and corporate profits. When faith in this ability drops, currencies collapse. See Argentina, Russia, Venezuela etc etc to see how fast and profoundly this happens, and the economic consequences of it. 3. Economic growth is dependent on ever-accelerating amounts of debt. The economy needs people to continue to consume at ever-increasing rates, which requires most of us to borrow more and more money so we have it to spend. If citizens were to decide to live within their means and repay their debts, it would collapse the already-leveraged money supply and bring down the economy. Unfortunately for most citizens, they don’t have the luxury to hold the line on new debts, let alone repay the existing ones. The same thing would happen, incidentally, if the banks decided to become more careful about their lending, instead of their current practice of hard- selling customers on additional debts they can’t afford, at usurious repayment rates. moonshot 4. Governments and banks are deliberately suppressing interest rates far below current rates of inflation. They are doing this to encourage ever-more borrowing and spending, and to force investors out of bond and other ‘fixed income’ investments into stocks (and real estate), so that the illusion of perpetual increases in stock (and real estate) values (necessary to prevent economic collapse) is continued. This is now hugely difficult to do: Interest rates in most places are near or even below zero, a nightmarish situation for those on fixed incomes, and for pension fund managers prohibited from investing all their funds in stocks. This means that, to avoid the wrath of investors and plunging values, fund managers have to buy extremely-high-risk ‘junk’ and ‘near-junk’ bonds to get any return at all, and have to take higher and higher risks on stock invest-ments. It means listed companies are buying back their own stock to make the remaining shares more valuable on a per-share basis, because they simply can’t keep generating more and more profits-per-share any other way. It means that banks have to fight anti-usury laws that would block them from charging 29% interest on credit card balances while they’re paying the same customers 0.5% on their ‘savings’ accounts — without usurious interest rates on such loans to the poor, they could not generate the needed double-digit increases in profits every year to keep their shares from collapsing and to avoid insolvency and bankruptcy. This ‘tax on the poor’ is a large part of the reason net worth for the vast majority of citizens is now negative and declining, while essentially all wealth accrues to the 1%. As income and wealth disparity soars, it tears at the very social fabric our economy is supposed to be supporting. 5. Most citizens are now a few months’ income away from bankruptcy, homeless- ness, and even hunger . Secure full-time jobs with benefits have disappeared by the millions (they’re too ‘expensive’ for profit-obsessed corporations to offer), leaving most citizens no choice but to work multiple low-paying, insecure jobs, perpetually caught in the two-income trap. While life expectancy has flat-lined, healthy life-years for the poor have fallen due largely to poor diets (they are too busy working to have time to cook healthy food), chronic anxiety and stress, and decreasing access to essential health care (whose costs continue to skyrocket year after year), leading to more and more people who are unable to participate in the labor force and hence dependent on other family members, or rendered homeless. And the population is aging rapidly, fac- ing accelerating healthcare costs and sick days, and mostly unable to even think of retiring before they die. 6. Governments, politicians and corporations are consciously lying about the real rates of inflation and unemployment. Factoring in the soaring costs of health care and housing in affluent nations, true inflation rates are 6-10%, and true unemployment rates are 20-30%. When the typical citizen is paying 8% more per year for essential goods and services, and paying 16% interest on their borrowings (the average for lower-income earners, per the Two Income Trap), while receiving average wage increases of 2%, and earning 0.5% on their savings, while facing a high risk that they, or their spouse, will become unemployed in any particular year, the situation is unsustainable and potentially explosive.