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Government Policy Adjustments for Kondratieff Winter

I don’t want to repeat Dylan Ratigan’s description of the financial sector as  a “con job”,  or something I wrote, as a  “financial ring“.  Instead, I want to describe the warfare that Obama is undertaking with the financial sector in terms of the extra-long cycle, the Kondratieff Wave. It’s all very simple. During Kondratieff Autumn the money supply is created by the financial sector using the fractional reserve system and monetization of debt. Rising asset prices, derivatives, and financial engineering completely privatize money printing and thus the government and central bank are released from the necessity to print money for real. This allows the economy to post exceptional growth rates combined with very low inflation. This also helps the financial sector to post over-sized returns, but in harmony with the society. People do not mind when Wall Street makes a killing when unemployment is under 5% and every recession is short and shallow. Even though the financial sector’s share in the overall economy’s profits is growing into absurd proportions, to about 40%,  the people do not mind. But please the financial sector itself is not producing any goods. The economy’s underlying strength is created by firms like Intel, Exxon Mobile, Pfizer, Caterpillar, […]

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