Is America’s Economy Fake?

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by Rebel Capitalist
Tuesday, Nov 22, 2022 - 0:30

It’s not just the corporate media that’s fake, it’s also vast portions of the economy that are fictitious in nature. 

Thanks to the Federal Reserve’s easy money policies, massive distortions have emerged across the US economy.

Artificially low-interest rates send misleading signals to entrepreneurs to set up ventures that would turn out to be unprofitable in otherwise normal circumstances. 

This leads to the dreaded boom-and-bust cycle that afflicts the macro economy. It’s an integral feature of the US’s fiat monetary system. 

These business cycles are the product of excessive growth in bank credit. The credit expansion is brought about by central banks establishing artificially low interest rates. 

Extended periods of artificially low interest rates and gigantic credit creation from central banks generates a deep imbalance between investment and saving.

The artificially low interest rates tend to incentivize borrowing, which subsequently leads to an increase in capital spending that is financed by the most recent deluge of bank credit. 

This cheap credit boom generates widespread malinvestment across the economy. However, this entire illusion of a booming economy collapses when the inevitable correction takes place. 

This is better known as the “bust” or “recession.” The money supply contracts or there’s at least a slowdown in its growth. This process takes place in order for resources to be reallocated to more economically viable parts of the economy. 

When you think about it, it’s small wonder why there’s been multiple 

boom and bust cycles ever since the creation of the Federal Reserve in 1913. The Fed is the primary culprit behind this process of credit expansion. 

And it will continue to play that role until its power it’s ultimately checked. Many Americans will suffer as a result of this dreaded cycle. 

In the meantime, check out George Gammon’s video covering the controversial FTX collapse and how even Twitter could potentially face a similar implosion that has huge macro implications. 

—Team Rebel Capitalist 

P.S. Take a look at George Gammon's private, online investment community (Rebel Capitalist Pro) with Chris MacIntosh, Lyn Alden and many other macro experts for just $1!!

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