The fiscal cliff exists for all countries of the world, since they all use the same central banking system. The fiscal cliff used by those in power to describe the situation, is used by them because they know that debt is now so large that it is impossible to pay it. That is part of the reason why it is inevitable. The other is that it can only be stopped in a manner that would result in the loss of their power by those, presently in power, and that is unacceptable to them. Because, to prevent the collapse, they would have to replace the system in a way that would not default on the debt. This would reverse the transfer of wealth to the rich from the poor which has existed the past 99 years and bring about a more equitable distribution of resources to the poor The Central banks could fix the pending economic collapse, by abolishing themselves. Banks have caused it, by printing fiat money, which is paper, for which no labor was expended and nothing was created. It is called counterfeiting (unless Congress has authorized it as they did by the Federal Reserve Act of 1913 The Central bank of every country is powerless to create jobs or assist the economy. When people catch onto the fact that all government statistics are so massaged as to be useless, they will realize that unemployment is greatly understated by eliminating the unemployed, who the government has decided, appear not to be looking for work. This unemployment has resulted in a reduction in consumption. The economy is not recovering it is shrinking. There are therefore no shortages and manufacturing does not wish to increase production, it wishes to increase sales demand. Credit is not sought or needed by industry and interest rates on loans are irrelevant.. Printing more fiat money with nothing behind QE3 and 4, has caused further inflation thereby reducing consumption further and reducing employment further In 1913 , the year the Federal reserve was enacted into law, the average annual wage in America was $633. The exchange value of gold that year was $20.67. That means that the average worker earned the equivalent of 30.6 ounces of gold per year. In 1990 the average annual wage had risen to $20,468. That is a whopping increase of 3,233 per cent, an average rise of 42 per cent each year for 77 years. But the exchange value of gold in 1990 had also risen. It was at $386.90 per ounce. The average worker, therefore, was earning the equivalent of 52.9 ounces of gold per year. That is an increase of only 73 per cent, a rise of less than 1 per cent per year over that same period. It is obvious that the dramatic increase in the size of the paycheck was meaningless to the average American. The reality has been a small but steady increase in purchasing power (about 1 per cent per year) that has resulted from the gradual improvement in technology. This and only this has improved the standard of living and brought down real prices-as revealed by the relative value of gold. In areas where personal service is the primary factor and where technology is less important, the stability of gold as a measure of value is even more striking. At the Savoy Hotel in London, one gold sovereign will still buy dinner for three, exactly as it did in 1913. And, in ancient Rome, the cost of a finely made toga, belt, and pair of sandals was one ounce of gold. That is almost exactly the same cost today, two-thousand years later, for a hand-crafted suit, belt, and a pair of dress shoes at Barneys in New York. There are no central banks or other human institutions which could even come close to providing that kind of price stability. And, yet, it is totally automatic under a gold standard.
The Federal Reserve claims that one of its primary objectives is to stabilize prices. In this, of course, it has failed miserably. The irony, however, is that maintaining stable prices is the easiest thing in the world. All we have to do is stop tinkering with the money supply and let the free market do its job. Prices become automatically stable under a commodity money system, and this is particularlly true under a gold standard. . The free market, if unfettered by politicians and money mechanics, will always maintain a stable price structure which is automatically regulated by the underlying factor of human effort. The human effort required to extract one ounce of gold from the earth will always be approximately equal to the amount of human effort required to provide the goods and services for which it is freely exchanged.
Economics is a non linear system and therefore subject to Chaos Theory. Economics is not close to an exact science. Someone won the election and that is going to have an effect sooner or later. Power has shifted. We may have a cliff for awhile. It will be corrected.. It could take many decades. Prepare yourself for that, or fix it. Those in power will not do so.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I write about the economy without compensation as a matter of public service and in an effort to save my country and others from economic collapse