Why are Interest Rates so Low? USAPonzi!
May 13, 2016
I listened to an interesting discussion on CNBC recently about why interest rates are so low and why they are continuing to stay low. I contend that interest rates are low because the U.S. Government is running a Ponzi scheme fiscal policy (USAPonzi).
I think it is quite natural for interest rates to be low when the U.S. Government is operating a Ponzi Economy that is producing massive liquidity with fiscal and accounting fraud. The U.S. Government, by operating with a dramatically unbalanced budget, is introducing new but imaginary-counterfeit money into the U.S. and global economy at the astounding rate of $15.8 Billion every day.
Because the U.S. Government is not operating with GAAP Accounting, we are incurring an unreported GAAP Deficit in FY2016 of $5.78 Trillion and therefore the daily rate of new money into the economy and financial system is $5.78T/365 = $15.8B. By deferring liabilities to the future U.S. taxpayers, the current U.S. taxpayers get to keep that deficit amount of $5.78 Trillion in FY2016 and this has now accumulated to a total of $102.1 Trillion over the last 47 years.
|Cash Deficit in FY2016
|GAAP Deficit in FY2016
|Unfunded Future Liabilities
|| $82.8 Trillion
|US Unfunded Liabilities (GAAP)
|| $102.1 Trillion
|Total National Assets
|| $123.6 Trillion
Source: www.usdebtclock.org May 13, 2016
As a result of operating with a dramatically unbalanced budget, the U.S. Government has given the U.S. citizenry $102.1 Trillion of imaginary-counterfeit money to spend to make Americans appear prosperous and to make the American upper class appear to be super wealthy. But it also means that most people do not need to borrow money because the U.S. Government is continuously issuing "free money" but imaginary-counterfeit money to finance their purchases and commerical activity.
The future U.S. taxpayers are now expected to pay for all of these things we have bought, built, and consumed but cannot afford. The tax bill that the future U.S. taxpayers now owe comes to $102.1 Trillion, our US Unfunded Liabilities (GAAP).
Because the U.S. Government has already borrowed $102.1 Trillion from the future U.S. taxpayers, it is in the best interest of the U.S. Government to keep interest rates very low. The value of capital is clearly diluted when the U.S. Government is introducing imaginary-counterfeit money into the economy and the financial system at the rate of $15.8 Billion a day. The value of real capital will increase significantly when USAPonzi implodes and this imaginary-counterfeit money evaporates.
If the U.S. Government continues this Ponzi scheme fiscal policy, it will create an infinite amount of imaginary-counterfeit money. The U.S. Government is stuffing money into the pockets of Americans but most of it is ending up in the pockets of the U.S. upper class.
This problem can only be equitably resolved by the adoption of GAAP Accounting and a commitment to a balanced GAAP basis budget by the U.S. Government.
You can learn more about this fraud/Ponzi scheme by reading my website www.usaponzi.com or better yet by reading my book "USAPonzi" which is available on Amazon and also on my website in PDF format.
This is the biggest ($102.1 Trillion) financial fraud ever perpetrated, I call it "USAPonzi: The Ultimate Government Fraud" and "The Biggest Ponzi Scheme on the Planet"!