Debt-Based Economy & Credit

Banks offer reward for holding savings accounts on their balance sheets by paying an interest rate on savings accounts. This is because these banks are utilizing your funds to issue loans and capitalize on these Assets Under Management (AUM), which is part of the FRB system.

But interest rates have been absolutely negligible for any Average-Joe citizen, which are at 0.09% APY according to Smartasset.com which can be read here. As a visual representation that is (0.0009) in decimal, 1% would be (0.01). That means if you held $10k in a savings account, you would earn a piddly ($9.00). Uhhhhhh… yeah you won’t see me holding any significant capital on any savings account, which US Bank’s rate is (0.01%). MEANWHILE, most of our banks are charging “maintenance fees” on our virtual accounts. So with these negligible interest earnings and consistent fees monthly/quarterly, you’re not making money. You’re losing money, and likely hemorrhaging without realizing because the amount you’re passively putting in is still covering up these costs.

So the banking system is punishing the average American for saving money, and motivating that same individual to spend, spend, SPEND. Because increased spending makes for a healthy economy right? Wrong, this Keynesian economics practice is showing it’s weakness today. The over-spending and under-saving causes for a huge exposure in those practicing this style when emergencies arise.

While America was busy spending like it was going out of style, they didn’t realize that the slightest hiccup in the system will cause the world that they built on stilts to come crashing down around them….

Further, according to ^^ those statistics, the average American is F*CKED if any sort of emergency were to happen. How many issues can you conceive that would amount to $1000 or more? It’s a lot. What’s the main reason for this abysmal statistic? The majority are living paycheck to paycheck without the ability to put money aside.

I will point out more on this problem as we go. But so far we have;

The dollar is backed by nothing but trust that the US gov’t will act in best intention for the average American, which we’ve seen time and time again that those in power do not.

The economy is addicted to spending, and punishing individual savings.

Americans are by-in-large living paycheck to paycheck and cannot afford to put money aside with the desire to increase their individual wealth.

Small Business Copying Big Business

The American Dream; forge your own path, start your own business and increase your wealth and take part in the free market.

Small businesses are being pressured to spend like the individual; don’t save, spend. Don’t stockpile, produce just enough to keep supply chains constantly running, busy and working. Reduce time-on-shelf retail ratios. And that’s not to mention the benefits large businesses receive with bulk manufacturing & production.

We’ve got small businesses spending their souls away to make profits, being punished for saving any cash on the side for emergencies and planning things out to run out of stock just in time for the next shipment to arrive.

And what’s happening now? Entire countries across the globe are stopping all activities. Small businesses cannot get money from their business practices, and cannot afford to pay their own employees and rent.

Big Business Bailouts & the Small Sales Slaughterhouse

“How can you say the economy is in a bad spot? The S&P 500 just had it’s largest green day ever.”

Stocks going up is not indicative of the economy being healthy. In regards of the ^^above statement, I suggest you look at a technical analysis term called a “dead-cat-bounce.” Stocks can very easily go up (and up rapidly, albeit momentarily) during a market downturn for multiple reasons; seller exhaustion, stock buybacks, speculation, short-term reaction to news/rumors/hope. Aside from those small reasons, real economic ramifications are swift on paper but very slow and drawn out in reality. As employees lose jobs, and the capability to pay on memberships, utilities, rent, food… things get ugly fast.

We’ve been finding out that large-scale businesses and corporations have mismanaged their money on such a catastrophic level that these “professionals” are incapable of funding their employees’ salaries for a 14-day shutdown. While these large companies were irresponsible, and refused to prepare for an emergency… they err’d on the side of just not wanting to think about a possible bad moment occurring. Clearly as long as you don’t think about a bad thing happening, it doesn’t happen, right?

14 DAYS AND THE US ECONOMY CRUMBLES.

These large businesses will receive their bailouts at lightning fast speeds (in an effort to avoid them making a large impact on unemployment numbers) while using this free money to also position themselves aggressively within the market. We watched it happen in 2008, we’re about to watch it happen again. All while your local businesses will be left with their hands out, waiting for the assistance to take it’s time to get to the local community level, and you/your family/your neighbors will be stuck watching as the larger players (i.e. national banks, Apples, Walmarts, etc.) swoop in demanding their payments, and gobbling up these businesses while the average American bleeds out onto the streets.

Bailing out these industries AGAIN, after 2008, is only rewarding their behavior. If these companies were allowed to die, it would cleanse the market of bad-actors and allow for the capital to flow directly to the best businesses with wise leadership and profitable plans.

Where Are We Now?

Okay so the dollar is being printed into oblivion.

We’re living on a paycheck to paycheck basis.

The banking system is applying pressure to spend everything you earn (in the false belief that it will reward everybody).

The banking system is also punishing us for saving with them.

We’re being suggested to take on debt so that more debt can be added to the system.

UHHHH… correct me if I’m wrong but that sounds like a massive ponzi scheme.

AND we’re just barely back to average hourly wages being equal to that of the dollar from 1973. I don’t know about you guys, but I would think that the average hourly earnings should be a bit higher than that considering how much more expensive everything else in our lives is.

Good point, lets compare those numbers….