Letter from Ehor (Fonte: silverbearcafe.com)
I don't want to bore you with the workings of the economy any more than necessary, with with the Fed pumping M-3 at an alarming rate, I received a note from Ehor Mazurok, who I worked with in developing the Mazurok-Ure Theory. It simply states that there are periodic crashes in the economy brought about by mountains of unsustainable debt and that the maximum period for such an accumulation is a theoretical 83-years. Today, I was pleased to get a note from Ehor:
"Remember our work, where it was shown that by dropping the interest rates, you pass a certain point, and things start to work backwards. Instead of gains one gets diminishing returns. You came up with an airfoil analog to the mathematics, that gave a physical model of the process. The airfoil has flipped, is loosing lift. To get things back on track, you have to raise interest rates, to pull things back before the point where things start working backwards. In other words, interest rates have to go back up to flip the airfoil around, to generate the lift required to keep things going.
One does not need rocket science to see this. Printing money degrades the value of currency. Its no different, than clipping bits and pieces out of a dollar as it circulates through the economy. As long as the bill is still recognizable, that is, still has some value, it is accepted as legal tender and traded. On the other hand, as enough of the bill is chopped up where its authenticity is started to be questioned, resistance to accepting as trade for goods starts to mount. Raising interest rates, is going backwards. That is gluing back the pieces that were hacked off, to where the bill starts to look like money again. A simple kindergarten explanation that brings home the point as to what is going on.
Unfortunately, if interest rates are raised, in Canada, as probably in the US, a lot of people will start turning keys back to the lenders for all of those houses, RV's, boats, cars that were bought with low interest money. FED pumping has addicted the public to easy money, and when it becomes not so easy, the payments will become as a crushing vice.
Our economic planners have successfully put all of us between a rock and a hard place. However, they still have a few tricks up their sleeves. As soon as they find out printing is not bringing the returns they expected, then other tricks come out of the bag. You may have seen some of them already. A new generation of FEES for things that our taxes were supposed to pay. Double taxation in disguise is the next game to play. This will go on, until the consumer is totally tapped out, resulting in the biggest depression we have ever seen! It ain't going to be soon! My math still shows, that 2014 is it! Which means we still have about 9 years to set ourselves up for Urbansurvival!!!!
Which is assuming of course that something wicked doesn't come this way later this month, of course... but we'll be watching for double taxation as a go forward watch point.