By Brandon Smith
21 May 2014
On the surface, the economic atmosphere of the U.S. has appeared rather calm and uneventful. Stocks are up, employment isn't great but jobs aren't collapsing into the void (at least not openly), and the U.S. dollar seems to be going strong. Peel away the thin veneer, however, and a different financial horror show is revealed.
U.S. stocks have enjoyed unprecedented crash protection due to a steady infusion of fiat money from the Federal Reserve known as quantitative easing. With the advent of the "taper", QE is now swiftly coming to a close (as is evident in the overall reduction in treasury market purchases), and is slated to end by this fall, if not sooner.
Employment has been boosted only in statistical presentation, and not in reality. The Labor Department's creative accounting of job numbers omits numerous factors, the most important being the issue of long term unemployed. Millions of people who have been jobless for so long they no longer qualify for benefits are being removed from the rolls. This quiet catastrophe has the side bonus of making it appear as though unemployment is going down.
U.S. Treasury bonds, and by extension the dollar, have also stayed afloat due to the river of stimulus being introduced by the Federal Reserve. That same river, through QE, is now drying up.
In my article The Final Swindle Of Private American Wealth Has Begun, I outline the data which leads me to believe that the Fed taper is a deliberate action in preparation for an impending market collapse. The effectiveness of QE stimulus has a shelf-life, and that shelf life has come to an end. With debt monetization no longer a useful tool in propping up the ailing U.S. economy, central bankers are publicly stepping back. Why? If a collapse occurs while stimulus is in full swing, the Fed immediately takes full blame for the calamity, while being forced to admit that central banking as a concept serves absolutely no meaningful purpose.