Wednesday, July 3, 2013


By JJ3 The Liberty Bard
This song was inspired by an article written by Bill Bonner (The Daily Reckoning) in June of 2013.  In this article Bill talked about the smoke of ZIRP and the mirror of QE.  I thought that this particular phrase was very poetic and it became the beginning line for this song.  "When the smoke of ZIRP and the mirror of QE..."
I know that many people have no idea what these terms mean or what these letters even stand for.  Let me enlighten you somewhat if you are one of those people.  ZIRP stands for the zero interest rate policy that the Federal Reserve has enacted since the financial collapse of 2008.  QE stands for Quantitative Easing, which is a fancy way of saying monetary intervention by our central banks which is basically a fancy way of saying the Fed prints money and then gives it to the largest banks in the world.  Why?  In the name of financial stability of course.
So ok, now that we know that, uh, so what?  Well here is the issue.  When the Federal Reserve Central Banking system forcibly uses it's policy to keep the interest rate low it creates bubbles.  Remember the housing bubble?  Or the tech bubble?  Bubbles are created when the Fed not only creates money out of thin air but also keeps the rates artificially low and then basically gives it to the banks for practically free.  Oh and did I mention that the Fed actually pays the banks to hold on to the money and not lend it out to us, the American people? 
If you are still thinking ok I don't see what the big deal is, this is what the Fed is designed to do.  Let me explain as follows.  The interest rate in essence is the price of money.  It determines how much it costs to borrow or lend money. When it goes up then the banks can make more money by lending it out to us.  When it goes down, why in the world would a bank want to lend it to us and take the risk that we don't pay them back when they can just hold the money in their vaults (on their books) and collect interest risk free from the Federal Reserve?   OK, so this is a bit of a simplification I know, but here is the real issue.
These policies, ZIRP and QE, have created perhaps the biggest bubble this world has ever seen.  Where?  In the bond market.  If you didn't know the bond market is many many times bigger in terms of money invested in it than the housing market that imploded in 2008 and collapsed our economy.  When the Federal Reserve tries to change or reverse their ZIRP and QE policies it will make the bond market go wild and collapse.  Even if done very carefully, there is no way around this financial truth.  This upcoming bond market collapse is a certainty, there is no escape.  The only thing that the Federal Reserve can do is to "extend and pretend".  I'm sorry, that's not true, they can also "lie and deny."  That is they will continue these policies until the invisible hand of the market takes that decision out of their hands AS IT ALWAYS HAS THROUGHOUT HISTORY!
So sit back, get your popcorn ready and get ready to experience a worldwide economic collapse of a scale that most cannot even imagine within the next couple of years.  Please don't say that you weren't warned and that you didn't see it coming.  If you really believe that then you are not watching or reading the right information.  I recommend highly if you want to educate yourself further on these issues.  Also is another excellent site for financial education.  I read them both daily and enjoy their sharp financial analysis.
Here are the lyrics for the song posted in the video above.


When the smoke of ZIRP and the mirror of QE,

Lead a nation to believe in false prosperity,

When the magic show ends and illusion is revealed,

When the people look around and there’s nothing left to steal,

Will we turn the tv off and finally start to feel?

The American people got the short end of the deal.

Do we have the courage can we find the bravery,

To confront our servitude and escape our slavery

Quantitative Easing – yes it is so pleasing,

To the Wall Street bankers and connected traders,

But for the average Joe who doesn’t really know,

What easing really means it’s only shattered dreams.

We’ve crucified savers on a cross of zero interest rates

Rewarded bad behavior and tempted the financial fates,

We’ve printed so much paper, only one thing left to contemplate,

When the Fed begins to taper, how long will we have to wait,

Before the party’s over and we begin to hyper-inflate.

Mobs, Messiahs and markets too,

Empire of Debt - US I Owe U,

There’s really not that much left to say…

Just sitting here on the dock of the bay,

Waiting for the financial reckoning day. - more great truths at this site - libertarian analysis