The Triffin Paradox, MBS Fraud, and What Happens Next

Every credit boom is followed by a credit bust, as un-creditworthy borrowers and highly leveraged speculators inevitably default. Homeowners with 3% down payment mortgages default when one wage earner loses their job, companies that are sliding into bankruptcy default on their bonds, and so on. This is the normal healthy credit cycle.

Bad debt is like dead wood piling up in the forest. Eventually it starts choking off new growth, and Nature’s solution is a conflagration–a raging forest fire that turns all the dead wood into ash. The fire of defaults and deleveraging is the only way to open up new areas for future growth…

Having unleashed tens of trillions of dollars in new credit since 2008, the central banks have simply increased the likelihood and scale of the coming default conflagration. Now the amount of deadwood that’s piled up is many times greater than it was in 2008.

Very few observers explore what happens after defaults start cascading through the system. Defaults mean loans and bonds won’t be paid back. The owners of the bonds and debt (mortgages, auto loans, etc.) will have to absorb massive losses.

Recall that banks rarely own the debt they originate: mortgages and auto loans are bundled and sold to investors such as pension funds, insurance companies, mutual funds, etc. So banks aren’t the only institutions at risk: every institutional owner of debt-based assets is at risk.

“While we will see short-term weakening of the $USD, but as all of the fiat currencies go into collapse, and the global economies go into recession, these events will actually drive the demand for dollars up in international circles, and this will increase the value of the dollar.  Ultimately the $USD will collapse too, bit it will be the last to fall; not because the $USD is the best or safest, but because it is the reserve currency, which actually makes it the worst of the fiat currencies.  But it is perceived as a safe haven, and so it will collapse last.  This will occur after a massive market correction, a major debt-clearing event, which will usher in a new system that is not based on the $USD.  The process is ironic, because the $USD will be perceived as a safe haven, even though it is the exact opposite – the expansion of the $USD is actually responsible for the coming economic collapse.”

The implications to the 90% of Americans who are not “wealthy” is profound, but not obvious.  The middle class will be destroyed, to the extent that most families who were truly “Middle Class” in 2007 will never return to that status.  They will have been rendered “Invisible” –

The Invisible Americans –

Memo to the D.C. Beltway/mainstream media apologists and propagandists: the 25 million Invisible Americans are no longer buying your shuck-and-jive con job.

For the bottom 90% of American households, the “prosperity” of the “recovery” since 2009 is a bright shining lie. The phrase is from a history of the Vietnam War, A Bright Shining Lie: John Paul Vann and America in Vietnam.

Just as the Vietnam War was built on lies, propaganda, PR and rigged statistics (the infamous body counts–civilians killed as “collateral damage” counted as “enemy combatants”), so too is the “recovery” nothing but a pathetic tissue of PR, propaganda and lies. I have demolished the bogus 5.3% “increase” in median household income, the equally bogus “official inflation” body counts, oops I mean statistics, and the bogus unemployment rate…

I’ve been reading a lot about a “recovering” economy. It was even trumpeted on Page 1 of The New York Times and Financial Times last week. I don’t think it’s true.

The percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from a 61% average between 2000 and 2008 to 51% today.”

Now that is a self-reported number. The reality is much worse: only 20% of American households possess the income and assets that characterize the middle class in financial terms. Granted, someone making $28,000 a year can self-identify as middle class, but if we look at basic metrics of financial security, they’re not even close.


Here’s your American “middle class” right here: see that little green slice of the pie? The upper middle class is the purple slice, and the top 10% is blue (most of this wealth is held by the top 1% and top 5%.)

Jim Clifton calls those who have been pushed out of the middle class Invisible Americans.

“Ten percent of 250 million adults in the U.S. is 25 million people whose economic lives have crashed.  What the media is missing is that these 25 million people are invisible in the widely reported 4.9% official U.S. unemployment rate.

Let’s say someone has a good middle-class job that pays $65,000 a year. That job goes away in a changing, disrupted world, and his new full-time job pays $14 per hour — or about $28,000 per year. That devastated American remains counted as “full-time employed” because he still has full-time work — although with drastically reduced pay and benefits. He has fallen out of the middle class and is invisible in current reporting.

More disastrous is the emotional toll on the person — the sudden loss of household income can cause a crash of self-esteem and dignity, leading to an environment of desperation that we haven’t seen since the Great Depression.

Millions of Americans, even if they themselves are gainfully employed in good jobs, are just one degree away from someone who is experiencing either unemployment, underemployment or falling wages. We know them all.”

This is where the bright shining lies come in. The worker now earning $28,000 annually is counted as employed, but there is no official metric for the household’s increasing insecurity and loss of opportunity.


If this does not sound like the groundwork for a revolution, then I can’t imagine what would convince you.  But regardless, it is coming.  Not just in the US, but in all of Western Society.  And those with progressive, globalist agendas intend to make the best of it.  Indeed, they already have been for the last 25+ years – accruing tangible assets which are not denominated in $USD, and moving people around in such a way that the previously homogeneous nation-states of Europe and North America will no longer be such, and thus will be easier to force into the mold of a centrally governed “global society”.



~Those who abuse liberty, sentences themselves to death!

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