IMF: Debt Reduction Thru Higher Interest Rates

IMF:     “Public debt now accounts for almost 40 percent of total global debt, the highest share since the mid-1960s. The accumulation of public debt since 2007 is largely attributable to the two major economic crises governments have faced—first the global financial crisis, and then the COVID-19 pandemic.”

Providing a graph to depict and substantiate this claim, the IMF literally made up the causal factors.

According to their graphic (an estimate per their footnotes), from 1970 to 2007, before the global financial crisis, before the pandemic, public debt doubled.    Nonfinancial Corporate Debt doubled from 1970 to 2020 – before the pandemic. The Public debt held by the US is on par with the debts illustrated as being from advanced economies.   According to the IMF the increased debt was justified as governments sought to par the catastrophic consequences of ‘their own lockdowns’.   Okay – the IMF didn’t exactly put it that way.   Instead they denoted the necessity to ‘save peoples lives, avoid bankruptcies and save jobs’… as justified actions.

But the point remains.   The Pandemic was used as the catalyst to increase debt beyond sustainability.

The IMF again relays inconsistent information by claiming that ‘central banks were instrumental in keeping inflation at bay during the pandemic by consistently lowering interest rates so governments could unabashedly borrow limitlessly.   But again, according to their own graphic interest rates had tanked in 2019 – well before the Great Pandemic.

Central Banks are now poised to reduce large purchases of government debt and other assets in advanced economies. The effect of this reduction is to reduce the supply of money in the economy increasing interest rates and the ability to borrow.

In contrast, some economists are calling for the outright ‘cancellation’ of the debt.   Shifting debt from the Fed to the Fed’s banks is a zero monetary transaction.   The argument the economists provide is that the debt is ‘fiat money’ existing only from an accounting standpoint. Like transferring money from your checking to your savings – you still have the same amount of money.

Cancelling the debt would have the result of cancelling the circular interest.   However, the logic is that cancelling the debt means the feds have no way to lower inflation which is attached to selling bonds to the public. Selling new bonds would likely require an increased interest attachment to make them attractive which would push inflation higher.

The entire monetary policy concept created by the Federal Reserve assures us of two things:   1. The continued degradation of the value of $1, and 2.   The ever increasing worthlessness of money due to insurmountable debt.

At which point paper money will be burned for heating fuel.

At this point Today the IMF is recommending a tightening monetary policy greenlighting the raising of interest by the Federal Reserve. Mortgage rates have already begun to climb in anticipation since the end of November.

And just like that, Morgan Stanley is calling for the Fed to raise interest rates to bring a ‘balanced economy’. Acknowledging that the move will result in a stagnated economy, CEO Gorman has declared that the move will be completed by the end of March and equities will flatten as cheap money disappears.

Spiked by the wage raises, Gorman has declared the Fed should start moving today given any waiting will make the move that much more difficult for sustainability.   Falling in-step with their banking handlers, the Fed announced 3 hikes will begin in 2022, with a further 3 in 2023. Citing a robust job market and a reduced unemployment rate, Gerome Powell has announced he will comply with the banker’s demands.

The available jobs has hit a near high at over 11 million while unemployment stands at 4.5%.   But unemployment does not reflect those vast millions who simply left the employment field.   Within those numbers are some fine print:   the number of working hours per week is 34.8, and nonfarm payrolls are less than half what they were previously.   The problem is unusual.   People reaching the age of 55 are retiring early, and the youth market is flat because millennials all believe they deserve more and better. Sounds like a mantra they learned somewhere….   Socialist schools maybe.

The Federal minimum wage remains at $7.25 per hour.   Yet retail and hospitality rates start at $15 – and can’t find an able body.   Of course there are the mask and vaccine mandates playing havoc as well with industries.   Many companies are making the mandates citing Biden’s Executive Order for companies which have more than 100 employees.   Problem.   Biden’s EO mandate was tabled by the Court. It doesn’t exist.  Which could up the ante for more class action lawsuits…

MARKET – Choppy.

4 thoughts on “IMF: Debt Reduction Thru Higher Interest Rates

  1. It’s inflate or die…. If they attempt to do a Volcker it will be immediate depression. Who knows, Maybe they want that as part of the Reset. Oh well, Stupider things are happening by the hour now….

  2. when i married my first wife,the seehawk,we bought our first house,the interest rate at the time was 18%,the day we closed the rate dropped to 16% and i remember the bank manager telling me what a great deal i was getting,i asked him where his gun and mask was,he got pissed ,i laughed,i thought it was funny how this ass actually believe he was cutting me a deal!there was no jobs in my area,i had to travel to new jersey and live away all week to make a living,i couldn’t afford a house in jersey,did that for 17 years,so when i hear the punks coming out of high school thinking they’re worth 40 dollars an hour i could just kick their asses up around their necks,LET THEM DO WHAT I DID,AND I WAS THANKFUL I HAD a job to feed my family and pay my bills! it was years till we could afford a new car and when i finally bought one,the company laid 450 of us off,why,because of nafta,the combined work of both criminal parties! i’m just pain sick of their lies and deceit,may they all rot in hell!

    • Ken and Alex and Helena,

      Reality Demonstrates : One dollar in your
      pocket represents NOT any measure of
      wealth you own!—but what you OWE to
      Washington ( unfunded MANDATES and
      GENERAL Debt ), in order to reduce ( an
      impossible correction/remedy ) its
      decades-long spendthrift profligacy.

      In other words, every man, woman, and
      child owes about $100,000 for each
      dollar in-pocket or in-holdings ( exclu-
      ding land, or physical gold/silver, one
      may have in-hand, as paper wealth
      means NOTHING in this Ponzi theft ).

      Well, that appears an exaggeration—yet,
      points to the pickle the FRAUD called :
      “Federal” ( privatized bank-theft ) “Reserve”
      ( privatized bank-theft ) really means, as
      that private ( Rothschild-controlled company )
      is neither private nor any reserve ( fractional
      banking has allowed creation of “wealth”
      not backed by any WEALTH!, but merely faked
      figures on paper and/or in electronic digitized
      Ones & Zeroes—Bitcoin being an Uber-Type
      representation of that unprecedented banking
      FRAUD ).

      Recall Rumsfeld had announced : About
      $Two-Trillion had gone missing from the
      Defense Department—announced the day
      after 9/11; and recall that professor and his
      Economics Class had discovered $23-trillion
      missing from the U.S. Defense Department’s
      financial books ( and after that investigative
      team filed an FOI to research further—the
      records became “NATIONAL Security” and,
      ergo, off limits to inquiring minds in the Public
      and in Congress.

      Go figure !—or . . . turn any cash into precious
      metals AND land AND, say, survivalist gear ?


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