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Declining Empires, Diminishing Returns and Economic Inertia
Read the Friday Afternoon Wrap-up for 4/19/2013 and the Monday Morning Commentary for 4/22/2013
In the below article, Zero Hedge published one of the most alarming – and damning – charts imaginable, regarding the outlook for the dying American “empire”…
The Great Unrotation in US GDP
Specifically, it plots the U.S. 10-year Treasury yield against nominal GDP over the past 53 years; depicting a peak in “nominal GDP” during the nation’s most poignant inflation spike since the Civil War (in 1979); and in 10-year Treasury yields a year later…
Since then, the nation’s economic undulations produced a choppy data series; with the worst declines occurring in the early 1980s – following said inflation spike; the early 1990s, following Bush I’s “read my lips, no new taxes” proclamation; the early 2000s’ “tech wreck”; and, of course, 2008’s Global Meltdown I.
Irrespective of these cyclical changes, the long-term secular trend has been decidedly DOWN – with no end in sight. This UNSTOPPABLE progression was unquestionably exacerbated by the outsourcing of manufacturing overseas; partly due to suicidal trade agreements like NAFTA and GATT; partly currency manipulation – enabling Eastern nations a significant cost advantage; and the rest – simple, honest competition.
Aside from these issues, one can’t discount the “coincidence” that U.S. economic strength peaked just after it abandoned the gold standard in late 1971. At that point, the ENTIRE WORLD adopted a fiat currency regime – in which emerging manufacturers gained the lion’s share of global “business”; while declining empires like America focused on “imaginary production” (housing, banking, etc.) via the manipulation of government printing presses.
Unfortunately, the law of “DIMINISHING RETURNS” works quickly; and within a decade, the false growth profile considerably weakened. Four decades later; amidst a Federal Reserve-generated annual inflation rate of 7%-8% – and rising – nominal GDP is no higher than in the 1960s!
Worse yet, all key indicators of economic activity are in FREE FALL –globally…
…and thus, America’s “economic inertia” has never been worse; perhaps, on a par with what it experienced in the 1930s…
Of course, we had a GOLD STANDARD back then; and thus, the government couldn’t impose an additional “tax” on the public by PRINTING MONEY…
Money-printing scam at taxpayer expense – Godfrey Bloom MEP
To conclude, the Zero Hedge graph depicts EXACTLY how far America has fallen; and sadly, all evidence points to – if anything – an acceleration of downward economic inertia. Given the nation’s MASSIVE, EXPLODING debts and deficits; it’s only a matter of time before the PRINTING PRESSES destroy what’s left of the declining empire…
Research Shows ALL Paper Money Systems Failed
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2013-04-22 16:49:21
Source: http://blog.milesfranklin.com/declining-empires-diminishing-returns-and-economic-inertia
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