The Bank Bubble: Building Real Banks for Counterfeit Money!
February 16, 2016
As Posted on www.usaponzi.com
The U.S. Government's Ponzi scheme fiscal policy is creating so much counterfeit money, the U.S. banking system has created 93,228 branch banks (as of June 30, 2015) to handle all of that money. Now the U.S. banking system is realizing that they have overbuilt and the larger banks are beginning to close some of these branch bank locations.
But I contend that the only reason that this many banking locations can appear to be profitable for the banking industry is because the U.S. Government is creating counterfeit money at an astounding rate. The U.S. Government creates this counterfeit money by undertaxing the U.S. citizens and businesses with GAAP basis deficit spending.
As of February 16, 2016 the U.S. Government has undertaxed the U.S. citizens and businesses by $101.2 Trillion which has produced $101.2 Trillion of counterfeit money. This $101.2 Trillion is reported on www.usdebtclock.org as "US Unfunded Liabilities (GAAP)". As my February 1, 2016 commentary "How much money is 2.5 Trillion Dollars?" explains, the U.S. Government created $2.5 Trillion of counterfeit money in just 4 months from September 30, 2015 to January 31, 2016. The U.S. Government is projected (see www.usdebtclock.org) to have GAAP basis deficit spending of $5.82 Trillion in FY2016 which means that the U.S. Government is creating $16 Billion ($5.82T/365=$16B) of counterfeit money every day.
U.S. citizens and businesses, especially the upper class, are appearing to get rich because the U.S. Government is dramatically and fraudulently undertaxing them. This has created a financial bubble of $101.2 Trillion of counterfeit money that is expanding by $16 Billion every day.
The total net worth of all U.S. citizens and businesses is estimated to be $116.6 Trillion (see "Total National Assets" on www.usdebtclock.org) but $101.2 Trillion of that is counterfeit money so we appear to have a lot more money because we have not had to pay the taxes for the U.S. Government's spending and promising to spend.
Surely most of these branch banks have been built for convenience of access but they only appear to be profitable because of all of the counterfeit money that is deposited in these banks. 86.8% of our apparent net worth is counterfeit money produced by U.S. Government fiscal and accounting fraud ($101.2T/$116.6T=0.868).
This financial bubble of counterfeit money has created bubbles in essentially all asset classes; stocks, bonds, houses, cars, trucks, smartphones, oil, gold, skyscrapers, and yes even in banks.
The corrupt and fraudulent fiscal policy and accounting system of the U.S. Government is causing severe distortions in the U.S. and Global financial system and economy. "The Bank Bubble" is just one of these distortions. We will have many physical assets that will fall into disuse or be dramatically underutilized when USAPonzi implodes. Branch banks will be one of the asset classes that will be underutilized when USAPonzi implodes.
This is also why I predict that most banks will fail when USAPonzi implodes because this counterfeit money will evaporate. Most, nominally 87%, of the money deposited in U.S. banks is counterfeit money. This of course assumes that money deposited in banks has the same percentage of counterfeit money as does the total net worth of all U.S. citizens and businesses.
But this is why we now have 93,228 branch banks. And this is why we have "The Bank Bubble"!
The profitability of U.S. banks has been dramatically enhanced over the last 47 years because the U.S. Government's USAPonzi fiscal policy and accounting fraud has increased the deposits in U.S. banks because of the creation of $101.2 Trillion of counterfeit money produced by the undertaxing of the U.S. citizens and businesses. U.S. banks are making more and more counterfeit money by loaning counterfeit money to people and businesses that could not afford these loans without the counterfeit money that the U.S. Government is distributing to them every year. U.S. bank deposits are now nominally 7X what they would be with a balanced U.S. Government budget (1/(1-0.868)=7.6).
Because Oswald shot JFK, because LBJ became president, because Congress approved LBJ's "Unified Budget", because the "Unified Budget" used Cash Accounting, because Cash Accounting undertaxed the U.S. taxpayers, because the U.S. Government is corrupt, because this fiscal policy produced "The Biggest Ponzi Scheme on the Planet"; because the upper class U.S. citizens and businesses have appeared to have gotten "rich" with $101.2 Trillion of counterfeit money because of this undertaxing, the U.S. banking system has built now 93,228 branch banks to manage the counterfeit bank deposits that have been produced by this $101.2 Trillion of counterfeit wealth.
We have wasted 47 years building "real bank buildings" to manage "fake, imaginary, counterfeit money" produced by USAPonzi; "The Ultimate Government Fraud". But this is just one of many such futile activities that this U.S. Government fraud (USAPonzi) has caused. See Chapter 6 "The Consequences of USAPonzi" of my Book USAPonzi.pdf (also available on Amazon) for a discussion of other bubbles that USAPonzi has created. In fact, Amazon itself is a counterfeit company created by USAPonzi which is also explained in Chapter 6 of USAPonzi the book.
Ponzi schemes can cause unusual side effects to the financial system, to the U.S. and global economy, and to the geo-political system.
The financial data presented in this commentary was sourced from www.usdebtclock.org as of February 16, 2016.