Waking Dreams End Unpleasantly

							       Waking Dreams End Unpleasantly
Brandon Smith
Alt Market
Feb 26, 2013
Whenever I endeavor to
explain America’s current
economic situation to a
person who likely receives
most of his information
from skewed mainstream
news sources, I try to use
two comparisons; the Great
Depression, and Weimar
Germany, because what we
are experiencing is actually
a combination of elements
from both events. Some
people, unfortunately, have
little understanding of the
Weimar hyperinflationary
crisis, but at the very least,
the imagery of the Great
Depression is present in the
minds of most Americans,
if only through television
and film.
When the depression is mentioned, they begin to grasp the gravity of our fiscal disaster, or at least what
I am trying to convey. However, those slow on the draw almost always sneer at the validity of the
threat. After all, during the Great Depression, there were bank runs, endless soup kitchen lines, roving
masses of dirty homeless drifters looking for employment, shanty towns, and desperation everywhere.
We’ve all seen the old stock black and white photos, and the America of today looks nothing similar…
We have shopping malls and imported fineries. We have sports cars and HDTV and video games and
iPads and Disneyland and pharmaceuticals in every color of the rainbow! We have tract homes and
gated communities and condos and beach houses and summer vacations and first-class flights and
texting and nightclubs and lattes and credit cards! When we turn on cable news, what do we see?
Progress! Glorious progress! All is in “recovery”. All is as it was yesterday. All is well…
For the average unaware citizen, as long as the commercials and the fast food continue, there is nothing
to be concerned about. What they have overlooked is that in this country we have had for at least the
past decade the illusion of prosperity, and nothing more. Our modern citizenry looks back at the Great
Depression and sees a deteriorating exterior that matched the true state of the interior crisis. They look
at today, and see a fresh, glimmering, glossy exterior that cleverly hides the rotting financial sinew
underneath.
They do not grasp how today’s implosion could be worse than that of any crisis yet seen in our history
while still maintaining a visual facade of working order.
                                                        In recent articles I discussed the black magic of
                                                        the stock market, and summarized a position I
                                                        have held for a very long time:
                                                        That the Federal Reserve has been injecting a
                                                        very large percentage of its QE, or fiat stimulus,
                                                        into the Dow in order to keep the market
                                                        propped and seemingly prosperous. That this
                                                        has been done by fueling international banks
                                                        with capital and then allowing the institutions to
                                                        flood stocks with purchase orders as well as
                                                        direct interventions by the Fed itself.
                                                          What seemed obvious to those of us in
                                                          independent economic analysis has been called
                                                          “conspiracy theory” for the past few years.
                                                          Finally, the cat has been let out of the bag by
                                                          former Fed Chairman Alan Greenspan (the same
                                                          man who admitted that the Federal Reserve is an
                                                          independent entity that answers to no one, not
                                                          even Congress, ending decades of
                                                          misinformation). In the following interview,
                                                          Greenspan states quite nonchalantly that “only
the stock market matters”, meaning, that the market is no longer a reflector of legitimate economic
health or decrepitude, rather, it has become a primary psychological driver. For Greenspan and the
Fed, fundamental indicators like true supply and demand are of no importance. The market must be
kept inflated at all costs, because its success, no matter how artificial, is the only thing keeping our
system from breaking apart:
http://video.cnbc.com/gallery/?video=3000148510&play=1
Richard Fisher of the Dallas Federal Reserve, clearly in response to Greenspan’s comments, openly
admitted in a recent interview that the central bank has “artificially sustained markets”:
http://www.zerohedge.com/news/2013-02-21/least-they-are-finally-honest
This is, of course, dangerously backwards. Strong data and legitimate profits are supposed to drive
market psychology, which in turn is supposed to increase stock performance. Instead, the market is
being manipulated in order to maintain a false sense of economic optimism and keep ignorant investors
and consumers spending in the hopes that tomorrow will bring better tidings!
Interestingly, the latest minutes from the Fed indicate a “push for tapering” on bond market purchases,
and a diminishment of QE, which is currently pumping over $85 billion per month into our fiscal
structure. Part of this effort has been led by Fisher, who owns over $1 million in personal gold
holdings (meaning it is doubtful the banker believes that the Fed will actually stop printing, or that the
dollar is going to hold its value for much longer). I believe this is a bit of theater designed to remind
the country how addicted to fiat we now are, as well as set the stage for the government alone (instead
of the government in collusion with central bankers) to be blamed as the scapegoat for an inevitable
collapse.
Both Greenspan and Fisher in their latest interviews subtly introduce the meme that government
indecision and “partisan bickering” are the ultimate culprits behind the continuing dysfunction of the
economy. Both parties do indeed play a role in the crisis, but not in the manner that central bankers
assert. The government’s greatest crime was allowing the private Federal Reserve to operate with
impunity and create the mortgage and derivatives bubble in the first place, while aiding it in policies of
inflation and manipulation. The government is a danger to our fiscal system not because of
“indecision”, but because it takes its marching orders from the Federal Reserve and colludes in now
openly admitted market manipulation.
Will the Fed cut off the flow of stimulus? Possibly.
It is important to note that talk of a QE reduction has surfaced right as the Federal Government is set to
make a decision on spending cuts and the raising of the national debt ceiling. The first cuts, now called
the “sequester” (a nicer word for “austerity”), will be administered in early March, and will apparently
affect everything from school teaching positions to employment at the Department of Defense. The
White House claims that such cuts will damage the U.S. “recovery” and send the nation hurtling back
into recession.
Obama is, in a sense, correct. However, I would point out that the federal cuts alone will not be the
catalyst for collapse. The Federal Reserve’s move to reduce QE in conjunction with cuts would be the
true trigger of fiscal calamity…a controlled calamity with a purpose…
America’s financial and social systems only function today because of one thing – government
spending. The government is “officially” indebted in the amount of $16 trillion. Unofficially, the
number is closer to $120 trillion. These massive liabilities have been accrued mainly through
entitlement programs and state welfare. Foreign investment in U.S. Treasury bonds does not produce
anywhere near the capital needed to maintain such programs, which is why the Federal Reserve is now
the world largest holder of U.S. debt (surpassing even China). Without the Fed’s endless printing and
bond buying schemes, the government cannot continue entitlement programs, and, it cannot feed
money to dependent states. These programs are the only thing keeping the illusion of a normal
economy alive.
To give you a sense of what I mean (keep in mind that real numbers are likely much worse than
reported statistics)…
Despite talk of recovery, U.S. poverty levels have hit all time highs. Over 50 million Americans are
below the official poverty line:
http://washington.cbslocal.com/2012/11/15/census-u-s-poverty-rate-spikes-nearly-50-million-
americans-affected/
In 2009, food stamp enrollment stood at around 32 million Americans. Today that number has grown
to around 48 million; a 50% increase in only 5 years:
http://www.nypost.com/p/news/business/more_americans_on_food_stamps_QfLsaSyEHbnWxAZ0z7
MMEP
The number of citizens on federal disability is at record highs, climbing to almost 9 million people, and
has expanded every month for the past 192 months:
http://cnsnews.com/news/article/8830026-americans-disability-hits-new-record-192nd-straight-month
Requests for emergency food assistance are on the rise in most cities across the country, and homeless
numbers continue to climb:
http://www.reuters.com/article/2012/12/20/us-usa-economy-hunger-idUSBRE8BJ14I20121220
Now ask yourself this: How many people in this country rely on government money for most if not all
of their survival needs?
Without government funding, and without the fiat printing press at the Federal Reserve to feed that
funding, the veil of financial recovery fades away, not just in the stock market, but everywhere. All the
poverty that has remained hidden for the past five years will suddenly be visible on our streets and
doorsteps. Welfare programs to individuals and to states ARE the modern day soup lines. When they
go, those reliant on them have nowhere to turn.
Already, homeless shelters in numerous states are suffering from funding shortfalls and many are
closing their doors:
http://www.christianpost.com/news/las-largest-emergency-homeless-shelter-seeks-funds-to-survive-
77494/
http://bangordailynews.com/2012/12/10/news/midcoast/midcoasts-only-homeless-shelter-abruptly-
closes-no-reason-given/
http://www.wbaltv.com/news/maryland/baltimore-city/Tough-times-lead-to-homeless-shelter-s-
closure/-/10131532/17589782/-/122ke1n/-/index.html?absolute=true
http://www.khou.com/news/Woman-seeks-help-as-her-southwest-Houston-homeless-shelter-faces-
closure–177795891.html
Food Banks are stricken with heavy demand and a dwindling supply. Interestingly, government cuts to
food bank spending are being blamed on high food prices due to the latest “drought”. No mention of
inflation caused by dollar devaluation, of course:
http://www.reuters.com/article/2012/11/21/us-usa-hunger-holiday-idUSBRE8AK08Q20121121
The lesson here is that no one, not even the government, has the ability to “spend their way out of
debt”. And no one, including central bankers, has the ability to cure economic collapse by printing
money out of thin air. But the bankers already know this…
The Fed is discussing QE reductions in the face of a “burgeoning recovery”, but they know as well as
you and I that the fundamentals show no economic improvement whatsoever. Why else would they
manipulate the stock market with fiat stimulus? Why else would they manipulate bond markets with
fiat stimulus? Why else would they keep interest rates at near zero and throw essentially free money at
international banks? Because this is their only means of hiding the reality they know to be true.
Why would they suddenly decide to reduce QE when they KNOW that the result will be the fast
moving exposure of true instability with the U.S.?
There are two reasons that I would make such a move if I were them…
First, they have done this song and dance before; allowing markets to dive in the face of a prospective
end to stimulus, and then jumping in to save the day with even larger fiat injections. The Fed’s
decision to spread the rumor of QE cuts just
before the government is to decide on
austerity measures and the debt ceiling is no
accident. The combination of Fed cuts and
government cuts may be a deliberate effort to
create a shock event that leads to the next
stage of U.S. implosion. Government cuts
and “party conflict” (fake party conflict) will
provide cover for the real cause of
destabilization; the Fed’s shut down of the fiat
life support machine. The masses blame the
lack of government “compromise”, and the
Fed moves back in later with even more
overwhelming QE measures, slowing the
crisis slightly.
Second, the Fed and the globalists at the seat
of our government may very well be
preparing the populace for a default scenario.
Central banks around the world have been
purchasing record amounts of gold, and
establishing bilateral trade agreements that
remove the dollar as the world reserve
currency. They are undoubtedly getting ready
for extreme devaluation in the U.S. dollar.
If QE is cut, or restricted to the point where debt obligations cannot be maintained, then this is exactly
what will happen. Again, government indecision and partisan debate will be blamed for the disaster
while the Fed remains the “innocent bystander” who “tried to warn us all of what would happen…”
The propaganda message sent to the public is:

Government decentralization is going to destroy you. Politics must be centralized and streamlined and
checks and balances must be removed if you are to survive. Politicians are unqualified to handle
economic policy because they care too much about the opinions of citizens, who are too stupid to
understand economic policy. All fiscal decisions should be handled by the banking elite without
interference so that they can remain “objective”. The American economy is in need of a complete
overhaul, and the American people need to hand over their economic sovereignty if they wish to
continue any semblance of a comfortable living standard.
In the end, the madness of debt spending is going to annihilate this country anyway. Fiat printing and
infinite QE will eventually result in the dumping of our currency as the world reserve, causing
devaluation and hyperstagflation. Stimulus and the monetization of government liabilities are crippling
us. The problem is, this nation is irrevocably dependent on such measures. Cuts will result in almost
similar catastrophe, but on a faster time frame and perhaps a slightly shorter duration (depending on
who runs the show in the aftermath). I’ve been saying it since 2008 – there is no easy way out of this
situation. There is no silver bullet solution. There will be struggle, and there will be consequence. It is
unavoidable. All we have to decide now is how we will respond when the inevitable disaster comes.


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