An economic virus cultivated in the United States of America, for200 years, has become an economic epidemic that has spread to the rest of the world.

The U.S. disease was diagnosed by Sismondi already in 1819, in his book New Principles of Political Economy. This book deals with wealth distribution among the population, an issue that Sismondi was the first to point out. Wealth concentration is still the main economic problem of our era. A distinctive feature of the present world economic perspective.

Another US modern problem that Sismondi addresses in his book is the imbalance between consumption and production; which we now call economic bubbles.

200 years ago, when Sismondi published his New Principles of Political Economy, he raised the problem of wealth distribution among the population and also the issue of taxes on consumption, which he considers unethical and unfair because they put most of the fiscal pressure on the low-income salaried class that spends its entire income.

Sismondi was a farsighted historian and economist from Geneva, whose research and findings inspired both Marx (surplus value) and Keynes (wages are the market) in developing their most sound ideas.

Sismondi also pointed out a mistaken economic belief that is the cause of the present economic Bubble Pandemic.

Sismondi said that the abundance of capital leads to investment in capital goods to increase production without waiting for an equal increase in wages that would expand markets.

Such investment behavior is based on a principle of the so-called Say's Law.

Jean Baptiste Say is the father of what is known as Supply-Side Economics. It was Say who said that the balance between supply and demand was irrelevant, because all production creates its own demand. That hopeful statement was approved by David Ricardo. In1819, Sismondi denounced it as false. But it is now taught as an economic science in American business schools, under the name of Say's Law. Sismondi said that such a mistaken business expectation was what kept many markets overflooded with unsold goods, which in turn led to unfair trade policies like dumping (selling below the cost price.

As Ricardo approved Say’s nonsense idea, Say’s doctrine was trusted by many American economists and businessmen. Perhaps, because at the beginning it is convenient for the development of any kind of industry in the new country, which, at the dawn of the Industrial Revolution, produced very little in industrial goods.

Say's nonsense fueled an endemic of overproduction in the American economy, reported in the 19th century by many foreign observers, who witnessed a chain of bankruptcies at the New York Stock Exchange.

In the United States, overproduction became an official doctrine during the Reagan Administration in the 1980’s, and it was even called Reaganomics or Supply-side Economics. When the U.S. started to have a very negative trade balance and Wall Street saw the Dow Jones index collapse, in order to increase exports, dumping became a characteristic of the US trade policy.

Subsidized US agricultural exports were disrupting some Third World economies (US cotton exports were subsidized up to 80% of the price) and these subsidies of its agricultural exports devastated the rural areas of developing counties, becoming such a notorious threat that the World Trade Organisation (WTO) called the Doha Round to negotiate for the total elimination of export subsidies for agricultural products from the United States and the European Union.

To believe in Say’s Law is convenient for mobilizing idle capital in countries where wealth is concentrated in large computerized financial fortunes that want to transform the intangible capital of the financial world into tangible assets of the real economy.

Until it bubbles, the matter is innocuous and it can be beneficial because the investment of capital in capital goods generates a short-term increase in employment.

The danger starts when the increase in production generated by investment does not correspond to a structural increase in income in the hands of the public (wages) because the new production will not find buyers. That produces an oversupply that we now call bubbles.

When the investment capital comes from savings generated by profits from successful business activities, they are not a danger, because they will always be organic to the economy cycle.

What is very dangerous is when it is an artificial capital that comes from the unlimited inorganic creation of unsupported money. With the dollar as the referential currency, any inorganic manipulation creates international economic disorder. The entire world economic health hinges now on inorganic capital created with a keystroke, which is an abuse of the fiduciary credit allowed to unsupported money. In simple, concrete and real terms, fiduciary currency is nothing else but debt.

The excesses of production typical of the Supply-Side Economy make it necessary to stimulate purchases with sales on credit. To sell on credit products that the public does not need causes excessive indebtedness that leads to the typical US waves of personal bankruptcies (Chapter11) that contract the market.

Without sales to the public; merchants and producers in turn fail. Financial credits are not paid. When banks are about to fail, they request help from governments which then issue inorganic money to avoid the collapse of a financial system which is globally interlinked by debts owed to each other on international financial exchanges.

National central banks have the function of monitoring and guaranteeing the soundness of the private bank financial operations, so that they do not affect the value and purchasing power of the respective national currencies.

National Central Banks under an international monetary system based on the dollar, are today nothing more than dependencies of the Federal Reserve of the United States.

The Federal Reserve does not belong to the people of the United States. The Federal Reserve, founded in 1913, belongs to a consortium of large US private banks.

Since then, that private consortium has usurped the money-issue function that belongs to the United States government, money-issuing which by law corresponds to the United States Secretary of the Treasury.

To consolidate the Federal Reserve's dominance over national central banks, a dogma was invented which claims that central banks should be independent from their governments’ economic policies. That dogma actually makes them dependencies of the Federal Reserve. Such dependency has accentuated since 1971, when the Federal Reserve started to issue dollars without a gold backing. Now, the role of central banks of the US vassal countries is to maintain the exchange value of a fiduciary dollar based on credit/debt.

To avoid the collapse of the dollar, central banks must replicate the issuance of dollars in national currency mimicking the inorganic issuing of the Federal Reserve, so that a relatively stable exchange rate can be maintained with a sort of collective devaluation, which erodes the real value of savings and wages of the entire world.

The role of the European Central Bank is no longer to maintain the purchasing power of European wages. Its function now, as seen in 2008, is to issue under the pretext of saving the banks, a monetary mass equivalent to that issued by the Federal Reserve to save the big Wall Street banks, by issuing an inorganic equivalent increase in the euro monetary mass. That way, the European public debt increased and the Euro was weakened, but a rise of the Euro against the dollar was avoided.

To get an idea of what would have happened if the ECB had not issued an inorganic money supply (debt) equivalent to that issued by the Federal Reserve, just look at what happened with the Swiss Central Bank. The Swiss issued only a few billion francs to save UBS from bankruptcy.

Before 2008, one dollar was worth 1.86 Swiss francs. After the crisis, one dollar was worth half of its previous value, just 0.90 of a Swiss franc.

The purchasing power of Swiss wages was not only maintained, but increased with the general depreciation of the other national currencies sacrificed to save the dollar. In the end, the Swiss were richer. With more honest or courageous Central bankers it could have been similar for the rest of the world

The basic cause of the announced international economic disaster that is coming is the collapse of the dollar under the weight of its debts, although to hide the real cause, the collapse will be attributed to the exaggerated measures of kidnapping freedoms taken under the pretext of protection against the COViD - 19; for which the people are deliberately being scared by presenting it as a mortal disease, without it being one; because its mortality rate is actually around 5%.

The only remedy I see for the immense international economic crisis that is going to break out is to return to the gold standard and return to the United States Secretary of the Treasury the functions assigned to it by the United States Constitution. That will not happen. The other remedy is for the United States to lose the war it will fight to avoid doing that. I understand that John Kennedy was murdered because he intended to return to the Secretary of the Treasury its legal function as the money-issuing body, and that was intended when the dollar was still backed by the Gold Standard ($ 35 / oz.) agreed in Bretton Woods.

Those that benefited most from the disappearance of the Kennedys was the consortium of banks that own the Federal Reserve.

The accumulation of wealth in the state is not the end of government, but the participation of all citizens in the joys of physical life, which wealth represents.” , J. C. Sismondi. (New Principles of Economics. (Chap. II, Lib.1)

That is a goal still missing in most Western-world economic policies, that sacrifice the well-being of their people to the financial effort to maintain the role of a toxic and corroded supremacy of the Federal Reserve’s fake dollars.

Almeria 07/23/2020