Definition of economy.
January 24, 2010
The definition of economy is monetary activities related to the production of goods and services and measured by currency spent to purchase these goods or services. In the current US economy or most modern economies the total moneys spent is not limited to just goods or services. For example the money made in the stock market is neither a product nor a service but it is part of the modern economy.
The definition of economy can also mean saving money by spending less than you would normally spend to provide a particular service or a product. Like the use of an economy car, which uses less fuel then a larger car would use. It could also mean the least expensive class of accommodations of traveling on an airplane. This is the short definition of economy
Then we have the Federal Reserve that is supposed to understand the definition of economy, but they have admitted that they don't understand the meaning of the definition of economy. I have observed the actions of the Federal Reserve for the last 35 years. I have watched 3 Federal Reserve chairmen come and go. First there was Paul Volcker then there was Alan Greenspan and now we have Ben Bernanke. All three have made major mistakes. They don't understand the definition of economy. These are supposed to be the smartest guys in the world. I don't see it that way at all.
First let’s take a look at Paul Volcker. By far he was the worst Federal Reserve chairmen of all three for the last 35 years. He is now 82 years old. He presided over the worst economy since the great depression of the 1930 to 1939 time period. Here is only part of what he did wrong. The main blunder was raising interest rates from 7% to 23%. This was reported publicly for the purpose of bringing down the inflation rate on our currency which went up to 15% at the time. The true reason was huge budget deficits by the congress over spending in a shrinking economy. The interest rate was raised to an extremely high rate of 23%. The true purpose was to attract all the money available in the banking systems worldwide to finance the huge Federal budget deficits of that time period. These deficits would seem tiny by today's standard of federal deficits which are in the trillions of dollars. But we had deficit spending never seen before, that required funding by the sale of debt bonds. At the interest rates peak of 23% a home mortgage was 25%. No one was buying houses. Not new and not existing houses.
As these high interest rates the economy was declining at a rapid rate. The government tax collections shrank as well forcing up deficit spending. This caused the deficit to increase and the Federal Reserve had to raise interest rates to attract more money to fiancé the tax shortfall. Paul Volcker does not seem to understand or comprehend the definition of economy.
How could anyone afford to buy a home at that ridicules 25% interest rate which is now only at 5 %. No one could afford to buy a home and this shut down the construction industry which was 20% of the economy back in that time period. This is what Paul Volcker brought to the American people. Paul Volcker brought America’s economy to its knees and now President Oboma is taking advice from this mental midget. Who got the really dumb idea to dust of this old relic and bring him out of the closet? President Oboma. He has been taking advice from Paul Volcker since prior to the election of 2008. Do you think that maybe that's why the economy has really not recovered and job creation has not started yet? The rate of inflation did not come down until after the interest rates dropped. It was the supper high interest rate that was the primary cause of the high 15% inflation. If you raise the cost of purchases and the cost of doing business with high interest rates you increase the cost of everything. This is what causes the inflation along with the out of control spending, which destroys confidence in a paper currency. If you go to the federal library of records depository you will see that the interest rates went up first then inflation increased 6 months after, not before. The higher the interest rate, the higher inflation followed it up. Paul Volcker does not seem to understand or comprehend the definition of economy
The Federal Reserve is supposed to set monetary policy for the country. Their decisions have an immediate effect on all American citizens. These decisions can cause an increase in economic activity or a decrease. They have an immediate effect, but the affect does not show up for 3 to 6 months after policy is set in the numbers reported by the Federal Reserve. The proof has been there for the last 35 years that they do not have the ability to project the economic consequences of their actions. Yet this is exactly what their job is. Time and time again over and over they make the same mistakes and they do it with the help of over 800 economists that work at the Federal Reserve. It is apparent that none of these economists understand the definition of economy. How can they be wrong so much? Could it be they do not understand or comprehend the true definition of economy? They always go way to far one way or the other. I can see it the day they go too far one way or the other. Why can’t they see it? The answer is, there just not smart enough. These are Alan Greenspan's words. They are mine as well. They don't seem to understand or comprehend the definition of economy.
Now we also have the second of two mental midgets advising congress and the president and that's Alan Greenspan. While he presided as the Federal Reserve chairmen he allowed interest rates to get way to low. Alan Greenspan did this by moving the effective interest rate to 1%. He should have never gone below 3%. It was not necessary to go to 1 %. The economy had already started to recover from the 9/11 attacks, yet he still continued dropping the interest rates. This allowed a bubble to be created in the real estate market and this bubble in real estate caused the current banking collapse. Now the government is taking advice from the men who created the messes. How does that make any sense? It doesn't, it defies all logic. Both Federal Reserve chairmen really screwed things up for the economy of the country and we are going to take advice from them. This is a continuation of making the same mistakes over and over, they are ignoring history. They don't seem to understand or comprehend the definition of economy
Paul Volcker and Alan Greenspan made huge mistakes and they should be the last people to get economic advice from. But once again we are making the very same mistakes over and over. Paul Volcker presided over a depression like economy that he created. Alan Greenspan lowered interest rates to low and created the current collapsed banking system. We have not seen the worst of Alan Greenspan's mistakes. Yet, most of the problems he created will unfold in the next 2 years. Get ready for a wild ride in 2010 and 2011. They don't understand or comprehend the definition of economy
Now we are down to Ben Bernanke. What is or what will be his mistake? The first would be the bubble being created right now in the bond market. This bubble will burst as soon as they stop playing the current shell game of buying in treasuries off the market and then selling new debt back to the very same people they bought them from. This has been going on for over a year now. First it was done by loaning $700 Billion in Tarp money to the banks and the banks would buy the monthly US treasury debt sales as the Federal Reserve needed them to. This is where banks normally park there reserve cash anyway. But it’s still a shell game. The same thing was done with a $500 billion loan to the World Bank. That has come to an end as well.
The Federal Reserve is trying to service a monthly average of 120 Billion in deficit spending and the dollar amounts are increasing not decreasing. So far my projected Federal budget deficit for 2010 is $1.7 trillion. This number will grow as 2010 progresses. This shell game started in the first quarter of 2009 and the Federal Reserve is running out of time. Most of the TARP money has been paid back by the larger banks that didn't need the money in the first place, but were forced to take the money anyway. This allows the banks money to be invested else ware and leaves the Federal Reserve without the power to dictate to the banks were the put there reserve money. As the months go buy in 2010 the Federal Reserve will run out of places to hide what they are doing. Remember that the whole worlds banking system went bankrupt in September of 2008. So if there not playing this little shell game were has the more than $2 trillion came from to finance the federal budget deficit since September of 2008. This is what they are doing. In order to artificially keep interest rates low they have to keep playing this shell game. It has been made public that the Federal Reserve will buy back up to 1 Trillion of its own debt. This is what they are using to artificially create demand and artificially keep interest rates low for the past 12 months. They first buy their older debt bonds in and they sell a like amount right back to replace what they have bought. This is creating an artificial market for these newly issued bonds. This will start to come apart in the second quarter of 2010.
This is Ben Bernanke's big mistake. He doesn’t understand the definition of economy either. When Bernanke's blunders do fly apart, the results will be devastating and they are as follows. First the interest rates will start to increase, slowly at first and it will escalate over the short period of 12 months, not 5 years. The interest rate now at 5% on home mortgages, only needs to get to 8% and this will cause a second collapse in the real estate market. The second affect of another collapse in the real estate market, will have the third affect of another round of even an even more severe banking system collapse. The result will be far worse than in September 2008. This circle will lead back to a collapse in the bond market due to the collapse in the banking system. The effect will be no one with any money to buy the more than $120 billion a month in US Treasury bond sales to finance the federal deficit spending. Those investors who can will try to dump or sell US treasury bonds. At a time when the federal reserve is trying to sell more than 120 Billion a month into the bond markets. This creates a situation where everyone is selling and there are no buyers. This will have a much more then devastating effect on the US economy, the value of the dollar will crash and hyper inflate. All these added together will totally collapse the economy. This will create an economic depression much worse than 1929 to 1939. They just don't fully understand the definition of economy. Ben Bernanke then becomes the third useless idiot. I know all this and much more will happen over the next three years.
If you want all the details, buy my book. 2012 what’s really going to happen in 2012.
In the book 2012 what’s really going to happen. You will find out.
How it all started.
Specifically who is doing it to the American people. Ill give you their names.
I will tell you why the elections in 2010 will do no good in changing the direction we are headed in.
Why Its being done intentionally by the very government that is supposed to protect us.
How our current political system has everything to do with all the current problems.
How the so called stimulus package passed in February 2009 will do nothing to help the economy.
Month by month prediction of the economic decline that will destroy our currency and our government
What 2013 will look like after the government has collapsed.
How this condition will last between 7 years and could go on for 20 years, until 2033.
What the 2013 aftermath will look like.
The chapters of 2012 are as follows
1. How I know
2. How we really got were we are
3. General summary of the current economic conditions
4. The Federal deficit problem
5. Oboma promised no new taxes.
6. Liberalism or communism
7. To stimulate or not to stimulate.
8. 2010 to 2013 the final chapter.
Electronically delivered in a PDF file, immediately after purchase 250 pages only $ 13.99
definition of economy
definition of economy