lewrockwell--2020-12-25--The ‘New Confederacy’? Yes, It’s Time To Unite Against The Globalist Reset

The narrative could not be more transparent or obvious , but then again , the elites are becoming lazy in their propaganda and the leftists are not all that bright .
Essentially , every time conservatives ( or moderates ) organize to defend themselves against communist or globalist attack we are called “ Nazis ” , brownshirts , populists , bullies , etc .
Now , I would remind these people that if we were really going the path of the Sturmabteilung then there would be rampant intimidation and assault on leftists to the point that they would be afraid @ @ @ @ @ @ @ as leftists .
Conservatives believe in self defense , not coercion and terror tactics .
Such actions are the wheelhouse of the political left these days .
They are far better than we are at imitating Brownshirt behavior .
The reality is that across the board the only people engaging in widespread censorship and violence are on the political left , yet we are supposed to be the “ Nazis ” ?
Historically , there does seem to be a pattern here , though .
In Germany in the 1920s-1930s communist groups were @ @ @ @ @ @ @ riots and even assassinations .
This lured many Germans in fear of being overtaken by a communist regime to support national socialism , the other side of the coin when it comes to tyranny .
In other words , to defeat the communists the public supported the fascists , and the fascists ended up being just as bad as the communists .
A Sugar Creek Christma ... Jones , Jenny B .
Best Price : $ 9.00 Buy New $ 12.99 If you study the investigations of historians like Antony Sutton in books @ @ @ @ @ @ @ Revolution ’ or ‘ Wall Street And The Rise Of Hitler ’ , you will discover there is incredible evidence proving that BOTH the communists and the fascists were funded and managed by the same global elites .
In other words , the bankers win either way because they control both sides of the game .
I do suspect that a similar strategy is being implemented within the US today , and that part of the agenda of globalists hellbent on getting their “ great reset ” is to foment civil war in @ @ @ @ @ @ @ of the fight .
It is indeed a Catch-22 for conservatives : If we roll over and do nothing , then the extreme left and their corporate and political partners take control of the country and we will never see freedom again as they assert their “ social justice ” mandates along with their lockdown mandates .
If we fight back using the same tactics as the leftists or support martial law , then we ultimately erase the civil liberties protected within the Bill of Rights .
Those rights will NEVER return ( @ @ @ @ @ @ @ a second ) and we become history ’ s biggest hypocrites and a cautionary tale of the “ dangers of nationalism ” told to children generations from now , much like the Nazis .
There is , however , another option , and it ’ s not diplomacy .
The establishment likes to make people think there are only ever two choices during any crisis , and both choices involve giving up more freedom or giving government more power .
What they don ’ t want you to consider is the third option @ @ @ @ @ @ @ and removing power from those that would abuse it .
Why should we rely on a middleman to enact such measures ?
Why are we always being told that we need to wait for a president or a government to do the job we can do ourselves ?
The liberty movement doesn ’ t revolve around Trump or the election , and it should NEVER rely on martial law as a means to secure our safety .
We can do this on our own without asking permission or waiting to be led by @ @ @ @ @ @ @ the political left and conservatives are no longer capable of finding common ground ( except , interestingly , among some moderate liberals that also stand against forced vaccinations and medical mandates ) .
In terms of the hard left , their cult is so far beyond reality now that it would be impossible to reconcile .
They live on another planet and their frothing zealotry is too entrenched for them to ever see reason .
In their delusional fantasies we are the ultimate villains , and they are the “ noble freedom fighters @ @ @ @ @ @ @ establishment power platform in the corporate world , in Big Tech and in the mainstream media is at their disposal , not to mention millions in funding from globalist organizations like the Open Society Foundation and the Ford Foundation , so this tale of the leftist “ underdog ” makes us double over with laughter at times .
The majority of conservatives just want to be left alone to live our lives the way we see fit .
You know , like real Americans are supposed to do .
But this notion is @ @ @ @ @ @ @ that we are “ all part of a society ” …THEIR society , and we must abide by their ideologies and rules “ for the greater good ” or suffer the consequences .
In other words , you can check out anytime you like , but you can never leave .
The fact is , groups in general are abstractions of the mind .
Just because someone declares that you are a part of their society does not make it so .
Walking away is every individual ’ s right as a human @ @ @ @ @ @ @ tend to be built on shared values and principles .
They don ’ t all need to agree on every detail , but they can ’ t be diametrically opposed in every way either .
Usually those with principles that match with an inherent sense of conscience are the groups that most appeal to people .
That said , there are people in this world ( around 1 % to 5 % of any given population ) that do NOT have inherent conscience , or they suffer from an ingrained affliction called narcissism @ @ @ @ @ @ @ that seek to dominate others , and they maintain membership through force rather than appealing to principle .
There is no possible way that this group can ever coexist with people that value freedom and empathy .
At least , not without incredible conflict… There is a large and growing opposition to pandemic lockdown measures , social justice policies that amount to cultural Marxism , as well as the prospect of a Biden presidency which would encourage both of these travesties exponentially .
It ’ s not all about Biden or the leftists @ @ @ @ @ @ @ beyond them , but many conservatives are looking at the problem more according to what is directly in front of them and less according to the people behind the curtain .
In light of this the mainstream media is doing exactly what is it designed to do – Create propaganda to “ shame ” anyone that dares to oppose the prevailing establishment narrative .
Their most recent strategy is to label the conservative rebellion against the Reset as “ the new Confederacy ” , and to bring up the specter of the Civil @ @ @ @ @ @ @ the back of discussion among conservatives and state politicians that the possibility of secession should be explored in the wake of the growing impasse between leftists , the globalist agenda , and freedom loving Americans .
The establishment and the useful idiots on the left will have none of it .
Despite the fact that all they talked about during the first two years of Trump ’ s presidency was secession , now that the shoe is on the other foot ( if Biden enters the White House and maybe even if he @ @ @ @ @ @ @ their media counterparts are FURIOUS at the idea that conservatives might actually succeed where they failed .
Collectivists are good at destroying things , not creating things .
Their calls for secession were a joke because we all know they are incapable of self sufficiency , and also they have no means of defense .
One look at short lived autonomous zones like “ The CHAZ ” will give you insight to what would happen if leftists tried to separate within a states .
It would be a disaster for them .
When @ @ @ @ @ @ @ the leftists and globalists listen .
They might not ever admit it , but they know we are actually capable of it .
To be clear , what I believe is happening is that conservatives are being prodded and provoked , not to separate and organize but to centralize .
I think they want us to support actions like martial law which would be considered totalitarian .
Conservatives , the only stalwart defenders of civil liberties , using military suppression and abandoning the Bill of Rights to maintain political power ?
That is @ @ @ @ @ @ @ in the long term .
And despite people ’ s faith in Trump , there are far too many banking elites and globalists within his cabinet to ensure that such power will not be abused or used against us later .
I think the concept of the “ new confederacy ” label being used by leftists and the media reveals what they truly fear , though : If they can get us to roll over for the lockdowns and medical tyranny and a Biden dictatorship , they ’ re happy .
If they @ @ @ @ @ @ @ under a Trump “ coup ” , they ’ re happy .
But what they don ’ t want is for conservatives and moderates to form their own organizational resistance not beholden to any singular political figure or top down pyramid structure .
Such organization is happening right now .
Millions of liberty minded Americans are leaving leftist counties and states , taking their wealth and businesses with them , and going to more conservative regions where they feel they will be safer .
There has not been an ideological immigration like this @ @ @ @ @ @ @ century .
The reality is that conservatives are congregating ( FINALLY ) and they are starting to work together for their own security .
In my own area in Montana I have been running local open meetings on preparedness and current events in the hopes of getting people on the same page and networked in the event that the current crisis spills over and rule of law breaks down .
Or , in the event that there is an attempt by the state or federal government to enforce medical lockdown mandates where we @ @ @ @ @ @ @ in the past couple of months and needless to say , people in my town are not going to submit to restrictions and do not plan to hide quietly in their homes while their community and businesses are destroyed .
These groups are forming across the country , and thank God , because without community organization there is ZERO chance of survival or freedom for liberty minded Americans .
As I ’ ve noted in some of my latest articles , the rebellion against lockdowns and vaccination mandates is visible even in hard-left @ @ @ @ @ @ @ There is much to be optimistic about .
However , the fight is going to be difficult and there will be ample vitriol leveled against us as we successfully unify .
Organization requires a tit-for-tat philosophy to do well .
Meaning , everyone must take some risk in order to encourage others to join the fight .
For example , conservatives want business owners to refuse to enforce lockdown rules .
But , if a business owner makes this courageous choice and faces off with government health officials , then patriots need to @ @ @ @ @ @ @ This might even mean standing in the way of law enforcement that is violating the constitutional rights of that business .
I call this “ creating a wall of worry ” ; many police and sheriffs are not onboard with the enforcement of illegal mandates , but those that are need to understand that there are potential consequences for doing so .
The wall of worry is a deterrent , and the larger the group of people involved the better .
Police are not going to risk escalation of a fight over lockdown @ @ @ @ @ @ @ go badly for them .
And , if people in their own departments are against the lockdowns , the consequences double if they seek to enforce them .
They should be the ones worried , not us .
Health Department officials are even less likely to push the issue in the face of opposition .
By extension , if your local sheriff ’ s department or police department is standing against the unconstitutional mandates and the state or federal government threatens them with repercussions , YOU must be there to offer help and @ @ @ @ @ @ @ for you , so you must be willing to take a risk for them .
I am also hearing considerable chatter that many medical professionals including doctors and nurses are going to REFUSE to take the poorly tested and questionable Covid vaccine for fear of damaging side effects .
And why should they ?
Why take a vaccine for a virus that only threatens less than 0.3 % of the public outside of nursing homes ?
Medical professionals are under immense pressure to take the vaccine or lose their license to practice .
@ @ @ @ @ @ @ against mandatory vaccination .
This means helping them to set up their own clinics outside of the controlled system where they can continue to aid people and still make a living .
This means networking liberty minded patients that need treatments for various ailments to doctors and nurses that will not demand they show a medical passport and will not report them to the government .
This means protecting doctors and nurses from retribution should government officials try to punish or arrest them .
Communities will need to build their own localized economies @ @ @ @ @ @ @ even creating a local currency scrip ( hopefully backed by some kind of commodity ) .
They are going to have to insulate themselves from the lockdowns economically in order to defy the lockdowns in a practical way .
Otherwise , anyone that does not conform to medical passports and contact tracing will be denied access to the establishment controlled economy and die of poverty .
We have to create alternatives .
We have to offer people a choice outside of tyranny , otherwise many will go along with the tyranny .
Finally @ @ @ @ @ @ @ to provide for their own security .
Regardless of how the election situation actually ends , and even if Trump stays in the White House and refuses to concede , martial law is an unacceptable scenario .
Conservatives don ’ t need it anyway .
We should be establishing localized security ( otherwise known as militias ) composed of any able bodied person in the community that wants to join .
These militias would have to form as unofficial organizations , as it is unlikely that state politicians will sanction them .
That @ @ @ @ @ @ @ t need them to sanction our own security and defense .
Like I said , we can handle it ourselves .
In the meantime , the leftists will label us “ brownshirts ” , but as mentioned they are the people that have proven over and over again to be violent and totalitarian , so their accusations ring hollow .
The media will call us the “ new confederacy ” , which is funny because the majority of the original confederates and slave owners during the Civil War were Democrats .
We ’ @ @ @ @ @ @ @ out that people have an inherent right to self defense and to freedom from oppression , and none of us are slave owners .
Anyone that calls for the globalist Reset is an enemy of individual rights , and anyone that tries to enforce medical tyranny is on the wrong side of history and of morality .
They can call us whatever they want and make erroneous historical comparisons until they are blue in the face ; it won ’ t change the fact that we are seeking to be free and they @ @ @ @ @ @ @ .
This is all that matters .
The Best of Brandon Smith

The narrative could not be more transparent or obvious, but then again, the elites are becoming lazy in their propaganda and the leftists are not all that bright. Essentially, every time conservatives (or moderates) organize to defend themselves against communist or globalist attack we are called “Nazis”, brownshirts, populists, bullies, etc. Now, I would remind these people that if we were really going the path of the Sturmabteilung then there would be rampant intimidation and assault on leftists to the point that they would be afraid to leave their homes or even identify as leftists. Conservatives believe in self defense, not coercion and terror tactics.
Such actions are the wheelhouse of the political left these days. They are far better than we are at imitating Brownshirt behavior. The reality is that across the board the only people engaging in widespread censorship and violence are on the political left, yet we are supposed to be the “Nazis”?
Historically, there does seem to be a pattern here, though. In Germany in the 1920s-1930s communist groups were highly active and initiated street violence, riots and even assassinations. This lured many Germans in fear of being overtaken by a communist regime to support national socialism, the other side of the coin when it comes to tyranny. In other words, to defeat the communists the public supported the fascists, and the fascists ended up being just as bad as the communists. A Sugar Creek Christma... Jones, Jenny B. Best Price: $1.86 Buy New $13.99 (as of 10:02 UTC - Details)
If you study the investigations of historians like Antony Sutton in books like ‘Wall Street And The Bolshevik Revolution’ or ‘Wall Street And The Rise Of Hitler’, you will discover there is incredible evidence proving that BOTH the communists and the fascists were funded and managed by the same global elites. In other words, the bankers win either way because they control both sides of the game.
I do suspect that a similar strategy is being implemented within the US today, and that part of the agenda of globalists hellbent on getting their “great reset” is to foment civil war in America while controlling or manipulating both sides of the fight.
It is indeed a Catch-22 for conservatives:
If we roll over and do nothing, then the extreme left and their corporate and political partners take control of the country and we will never see freedom again as they assert their “social justice” mandates along with their lockdown mandates.
If we fight back using the same tactics as the leftists or support martial law, then we ultimately erase the civil liberties protected within the Bill of Rights. Those rights will NEVER return (don’t believe the promises for a second) and we become history’s biggest hypocrites and a cautionary tale of the “dangers of nationalism” told to children generations from now, much like the Nazis.
There is, however, another option, and it’s not diplomacy.
The establishment likes to make people think there are only ever two choices during any crisis, and both choices involve giving up more freedom or giving government more power. What they don’t want you to consider is the third option – The people taking power for themselves and removing power from those that would abuse it.
Why should we rely on a middleman to enact such measures? Why are we always being told that we need to wait for a president or a government to do the job we can do ourselves? The liberty movement doesn’t revolve around Trump or the election, and it should NEVER rely on martial law as a means to secure our safety. We can do this on our own without asking permission or waiting to be led by a mascot.
It is true that the political left and conservatives are no longer capable of finding common ground (except, interestingly, among some moderate liberals that also stand against forced vaccinations and medical mandates). In terms of the hard left, their cult is so far beyond reality now that it would be impossible to reconcile. They live on another planet and their frothing zealotry is too entrenched for them to ever see reason.
In their delusional fantasies we are the ultimate villains, and they are the “noble freedom fighters”. Of course, every single establishment power platform in the corporate world, in Big Tech and in the mainstream media is at their disposal, not to mention millions in funding from globalist organizations like the Open Society Foundation and the Ford Foundation, so this tale of the leftist “underdog” makes us double over with laughter at times.
The majority of conservatives just want to be left alone to live our lives the way we see fit. You know, like real Americans are supposed to do. But this notion is not acceptable to collectivists. They argue that we are “all part of a society”…THEIR society, and we must abide by their ideologies and rules “for the greater good” or suffer the consequences. In other words, you can check out anytime you like, but you can never leave.
The fact is, groups in general are abstractions of the mind. Just because someone declares that you are a part of their society does not make it so. Walking away is every individual’s right as a human being. Groups that survive and thrive tend to be built on shared values and principles. They don’t all need to agree on every detail, but they can’t be diametrically opposed in every way either.
Usually those with principles that match with an inherent sense of conscience are the groups that most appeal to people.
That said, there are people in this world (around 1% to 5% of any given population) that do NOT have inherent conscience, or they suffer from an ingrained affliction called narcissism. These people are attracted to movements that seek to dominate others, and they maintain membership through force rather than appealing to principle. There is no possible way that this group can ever coexist with people that value freedom and empathy. At least, not without incredible conflict…
There is a large and growing opposition to pandemic lockdown measures, social justice policies that amount to cultural Marxism, as well as the prospect of a Biden presidency which would encourage both of these travesties exponentially. It’s not all about Biden or the leftists, obviously. The Reset goes far beyond them, but many conservatives are looking at the problem more according to what is directly in front of them and less according to the people behind the curtain.
In light of this the mainstream media is doing exactly what is it designed to do – Create propaganda to “shame” anyone that dares to oppose the prevailing establishment narrative. Their most recent strategy is to label the conservative rebellion against the Reset as “the new Confederacy”, and to bring up the specter of the Civil War.
This narrative is riding on the back of discussion among conservatives and state politicians that the possibility of secession should be explored in the wake of the growing impasse between leftists, the globalist agenda, and freedom loving Americans.
The establishment and the useful idiots on the left will have none of it. Despite the fact that all they talked about during the first two years of Trump’s presidency was secession, now that the shoe is on the other foot (if Biden enters the White House and maybe even if he doesn’t) the SJWs and their media counterparts are FURIOUS at the idea that conservatives might actually succeed where they failed.
Collectivists are good at destroying things, not creating things. Their calls for secession were a joke because we all know they are incapable of self sufficiency, and also they have no means of defense. One look at short lived autonomous zones like “The CHAZ” will give you insight to what would happen if leftists tried to separate within a states. It would be a disaster for them.
When conservatives talk about separation, though, the leftists and globalists listen. They might not ever admit it, but they know we are actually capable of it.
To be clear, what I believe is happening is that conservatives are being prodded and provoked, not to separate and organize but to centralize. I think they want us to support actions like martial law which would be considered totalitarian. Conservatives, the only stalwart defenders of civil liberties, using military suppression and abandoning the Bill of Rights to maintain political power? That is a dream come true for the globalists in the long term. And despite people’s faith in Trump, there are far too many banking elites and globalists within his cabinet to ensure that such power will not be abused or used against us later.
I think the concept of the “new confederacy” label being used by leftists and the media reveals what they truly fear, though:
If they can get us to roll over for the lockdowns and medical tyranny and a Biden dictatorship, they’re happy. If they can get us to support martial law under a Trump “coup”, they’re happy. But what they don’t want is for conservatives and moderates to form their own organizational resistance not beholden to any singular political figure or top down pyramid structure.
Such organization is happening right now. Millions of liberty minded Americans are leaving leftist counties and states, taking their wealth and businesses with them, and going to more conservative regions where they feel they will be safer. There has not been an ideological immigration like this in the US for well over a century. The reality is that conservatives are congregating (FINALLY) and they are starting to work together for their own security.
In my own area in Montana I have been running local open meetings on preparedness and current events in the hopes of getting people on the same page and networked in the event that the current crisis spills over and rule of law breaks down. Or, in the event that there is an attempt by the state or federal government to enforce medical lockdown mandates where we live. These meetings have been expanding in the past couple of months and needless to say, people in my town are not going to submit to restrictions and do not plan to hide quietly in their homes while their community and businesses are destroyed.
These groups are forming across the country, and thank God, because without community organization there is ZERO chance of survival or freedom for liberty minded Americans. As I’ve noted in some of my latest articles, the rebellion against lockdowns and vaccination mandates is visible even in hard-left states like California and New York. There is much to be optimistic about. However, the fight is going to be difficult and there will be ample vitriol leveled against us as we successfully unify.
Organization requires a tit-for-tat philosophy to do well. Meaning, everyone must take some risk in order to encourage others to join the fight.
For example, conservatives want business owners to refuse to enforce lockdown rules. But, if a business owner makes this courageous choice and faces off with government health officials, then patriots need to be there to back them up. This might even mean standing in the way of law enforcement that is violating the constitutional rights of that business.
I call this “creating a wall of worry”; many police and sheriffs are not onboard with the enforcement of illegal mandates, but those that are need to understand that there are potential consequences for doing so. The wall of worry is a deterrent, and the larger the group of people involved the better. Police are not going to risk escalation of a fight over lockdown mandates if they realize that fight could go badly for them. And, if people in their own departments are against the lockdowns, the consequences double if they seek to enforce them. They should be the ones worried, not us.
Health Department officials are even less likely to push the issue in the face of opposition.
By extension, if your local sheriff’s department or police department is standing against the unconstitutional mandates and the state or federal government threatens them with repercussions, YOU must be there to offer help and support. They are taking a risk for you, so you must be willing to take a risk for them.
I am also hearing considerable chatter that many medical professionals including doctors and nurses are going to REFUSE to take the poorly tested and questionable Covid vaccine for fear of damaging side effects. And why should they? Why take a vaccine for a virus that only threatens less than 0.3% of the public outside of nursing homes?
Medical professionals are under immense pressure to take the vaccine or lose their license to practice. Conservatives MUST defend them if they rebel against mandatory vaccination.
This means helping them to set up their own clinics outside of the controlled system where they can continue to aid people and still make a living. This means networking liberty minded patients that need treatments for various ailments to doctors and nurses that will not demand they show a medical passport and will not report them to the government. This means protecting doctors and nurses from retribution should government officials try to punish or arrest them.
Communities will need to build their own localized economies, using barter and trade and maybe even creating a local currency scrip (hopefully backed by some kind of commodity). They are going to have to insulate themselves from the lockdowns economically in order to defy the lockdowns in a practical way. Otherwise, anyone that does not conform to medical passports and contact tracing will be denied access to the establishment controlled economy and die of poverty. We have to create alternatives. We have to offer people a choice outside of tyranny, otherwise many will go along with the tyranny.
Finally, conservative communities are going to have to provide for their own security. Regardless of how the election situation actually ends, and even if Trump stays in the White House and refuses to concede, martial law is an unacceptable scenario. Conservatives don’t need it anyway. We should be establishing localized security (otherwise known as militias) composed of any able bodied person in the community that wants to join. These militias would have to form as unofficial organizations, as it is unlikely that state politicians will sanction them.
That’s okay. We don’t need them to sanction our own security and defense. Like I said, we can handle it ourselves.
In the meantime, the leftists will label us “brownshirts”, but as mentioned they are the people that have proven over and over again to be violent and totalitarian, so their accusations ring hollow. The media will call us the “new confederacy”, which is funny because the majority of the original confederates and slave owners during the Civil War were Democrats.
We’ll set aside that irony and point out that people have an inherent right to self defense and to freedom from oppression, and none of us are slave owners. Anyone that calls for the globalist Reset is an enemy of individual rights, and anyone that tries to enforce medical tyranny is on the wrong side of history and of morality.
They can call us whatever they want and make erroneous historical comparisons until they are blue in the face; it won’t change the fact that we are seeking to be free and they are seeking to take that freedom away. This is all that matters.
Reprinted with permission from Alt-Market.com.
The Best of Brandon Smith


Why?

Trump gave a statement on election fraud .
You know the details : leading going into the night ; several swing states stop counting ; losing by morning .
Hundreds , if not thousands , of sworn affidavits ; video evidence ; vote dumps at ninety-percent or higher for Biden .
It ’ s about a thirteen-minute statement .
He lays out his accusations in great detail , as if making the opening statement in a court trial .
Why give it now , when he has lost in every contested state , virtually every court case , etc.
?
@ @ @ @ @ @ @ , there is no point .
Just one more example of him saying something while doing nothing .
I Have Walked With the ... Robertson , Pat Best Price : $ 12.31 Buy New $ 15.19 Or…maybe…he is making his opening statement in his defense of his oath .
The one he took when entering office .
The one every meaningful official takes .
An oath to defend the Constitution .
As I noted before , nothing will happen unless Trump believes he will have meaningful support – primarily from the military .
@ @ @ @ @ @ @ this ?
Or is there no there there ?
The Best of Bionic Mosquito

Trump gave a statement on election fraud. You know the details: leading going into the night; several swing states stop counting; losing by morning. Hundreds, if not thousands, of sworn affidavits; video evidence; vote dumps at ninety-percent or higher for Biden.
It’s about a thirteen-minute statement. He lays out his accusations in great detail, as if making the opening statement in a court trial. Why give it now, when he has lost in every contested state, virtually every court case, etc.? What’s the point?
Likely, there is no point. Just one more example of him saying something while doing nothing. I Have Walked With the... Robertson, Pat Best Price: $1.18 Buy New $3.00 (as of 10:02 UTC - Details)
Or…maybe…he is making his opening statement in his defense of his oath. The one he took when entering office. The one every meaningful official takes. An oath to defend the Constitution.
Conclusion
As I noted before, nothing will happen unless Trump believes he will have meaningful support – primarily from the military. Does he now know that he has this?
Or is there no there there?
Reprinted with permission from Bionic Mosquito.
The Best of Bionic Mosquito


lewrockwell--2020-12-25--The Psychology of Money

The Psychology of Money

The world stands on the threshold of monetary hyperinflation with the US dollar leading the way .
The final months of fiat money are coming into view .
What will replace them — bitcoin or gold ?
This article argues that the final solution is bound to be with central banks and government treasury departments retaining their control as issuers of money by the only means at their disposal : deploying their gold reserves to back their currencies , not as fiat , but as credible gold substitutes .
Central banks own no bitcoin , which effectively rules it out @ @ @ @ @ @ @ , central bank digital currencies , but they are simply another form of fiat money and will also fail — assuming there is enough time for them to be introduced .
In any event , the eventual replacement for fiat money needs to be beyond government control ( other than the state acting as a monetary trustee , ensuring gold coins are always available for exchange ) and flexible enough for its users to collectively set the quantity that acts as money .
A formulaic medium such as bitcoin does not provide this @ @ @ @ @ @ @ has proved its suitability in the past .
Only Her Christmas Mir ... Checketts , Cami Buy New $ 12.99 For anyone interested in the history and qualifications of money as a circulating medium the current times are fascinating , being the fin de siècle of fiat currencies .
Any doubt that fiat currencies are failing is being banished .
The days when governments can finance their schemes by debauching their currency are numbered .
Consequences flow .
A meaningful debate about why they are failing is yet to be had .
Only @ @ @ @ @ @ @ of monetary history and an understanding of the economics of inflation , are aware of an impending monetary crisis , but there are early signs they are being joined by a widening circle of thinkers .
But for all the believers in the macroeconomics of Keynes , there is for the moment , a state of profitable bliss , of money-making in anything financial .
They do not realise it yet , but when everything rises in price it is because the purchasing power of the currency in which they are measured is @ @ @ @ @ @ @ investors is everything , because with belief you can evade reality .
Belief is a condition where things held in the mind are true .
There can be no evaluation .
It provides the foundations of attitude and behaviour .
Over the decades the Keynesian cohort has led itself to believe in governments and their statistics at the expense of humanity and those beliefs have become increasingly divorced from economic reality .
For them , inflation is no longer of money , but redesignated to prices , leaving the weapon of debasement concealed @ @ @ @ @ @ @ to rise by a targeted two per cent — paying that little bit more for everything every year is good for us , apparently .
Bull markets are perpetual .
Banks will always be bailed , so counterparty risk becomes a theoretical problem , never to be realised .
And while most of us might be persuaded these speed bumps are inevitable , we now find that whole economies need to be bailed .
It is all thanks to the magic money tree , which can be stripped repeatedly by central banks , @ @ @ @ @ @ @ accepts as the truth , is contained by a goal-sought two per cent .
The belief that a rising GDP represents economic growth allows governments to make up the numbers simply by spending more .
And because the continual debasement of the currency guarantees that the dumbest trend follower will make money in financial markets , Keynesian beliefs continue to be reinforced , notwithstanding the reality .
Of one thing we can be certain and that is hyperinflation of the quantity of money will destroy the mainstream ’ s dreams .
That time @ @ @ @ @ @ @ blind deaf and mute Keynesians and their followers will wake up to reality late in the hyperinflationary collapse .
There are two other cohorts we must consider : those who believe that gold and/or silver will return as money out of the destruction of fiat , and a new class of believer who understands the relative supply dynamics of bitcoin relative to the rapid and increasing expansion of government currency .
There is a gentle rivalry between believers in precious metals and cryptocurrencies , the former sticking to the lessons of history and @ @ @ @ @ @ @ The problem we have to deal with is that , for now , the majority in all three cohorts are comprised of believers and not realists .
They all believe they are right but have applied little thought to the demise of fiat and what it means .
Nor have they stopped to think how its replacement will come about and what that replacement will be .
This article attempts to answer these questions .
The certainly of fiat destruction Now that fully two-thirds of US Government spending in the second half of @ @ @ @ @ @ @ ( the other third being from revenues which fell sharply ) we can say that without a miraculous change in circumstances and financing policies , the dollar is on a hyperinflationary course .
For what has happened is continuing to happen , and irrespective of who commands the White House in late-January , the political imperative rules out cuts in government spending and demands it to be increased instead , even while government revenues continue to fall .
The Greatest Salesman ... Mandino , Og Best Price : $ 1.91 Buy New $ @ @ @ @ @ @ @ and supply chain failures it behoves the government to do whatever it takes to rescue businesses and prevent an economic slump .
Its advisers are Keynesian priest-like figures , who argue that government spending must be increased to save the economy .
They say more deficit spending is required , and modern monetary theorists argue that the increase in government debt will be owed to itself .
In this the MMTs have a minor point : US Treasuries bought by the Fed is effectively debt owed to the government by a government department @ @ @ @ @ @ @ otherwise , MMT is simply a justification for unfettered inflationary financing of government spending .
The hyperinflationary conditions in the second half of fiscal 2020 are therefore certain to continue , and as the dollar is diluted by successive increases in its quantity , the nominal amounts of inflationary issues of money and credit must rise to achieve the imaginary benefit .
At the time of writing , a stopgap of $ 900bn has currently been agreed in Congress , but President Trump has rejected it as being too little and reflecting vested @ @ @ @ @ @ @ , because the Keynesian priesthood knows of no other means of dealing with the current economic situation .
Monetary debasement can only continue for as long as its users continue to accept fiat currency as the medium of exchange .
To reject an established unbacked state currency for transactional purposes is a last resort , and naturally , in the general public there is great reluctance to do so .
But , unless the government reins in its spending and balances its budget , the fate of its currency is for it to @ @ @ @ @ @ @ .
The path to valuelessness is uneven , faith being maintained in the currency until it is no longer tenable .
The dilution of its purchasing power by the inflation of its quantity is one factor ; faith in it is ultimately the overriding factor .
The continual abuse of that faith is what leads to a currency ’ s demise .
The first to be alerted are the users of foreign exchanges , and it is here that the dollar will face a destructive weakening .
Foreigners own considerably more dollars and @ @ @ @ @ @ @ of in foreign currencies .
Having had the exorbitant privilege of issuing the world ’ s reserve currency for seventy-five years , most American ownership of foreign-related financial assets is denominated in their own dollars .
A year ago , many of my American friends argued that I was wrong to be bearish about the dollar because foreigners would always need to own them , and in the event of a worldwide financial or economic panic , they would increase their demand for dollars as a safe haven .
It is an argument @ @ @ @ @ @ @ the dollar is not over-owned ; but in a contracting global economy with diminishing international trade the dollar is needlessly owned and is already being sold down .
The history of fiat money breakdowns usually features a substantial fall in the currency ’ s purchasing power on the foreign exchanges before the domestic population becomes aware of what is happening to its medium of exchange .
The fall in foreign exchange values is accompanied naturally by a rise in prices for commodities and raw materials .
The Keynesian priesthood initially argues in favour @ @ @ @ @ @ @ , measured against other currencies and not so much against commodities , because it becomes more competitive for trade purposes , until , of course , the fall in international purchasing power creates embarrassing problems .
The first of these is the withdrawal of the government ’ s principal source of finance that does not originate from its central bank : foreigners no longer retaining net dollar surpluses from the balance of trade to reinvest in government , corporate and agency debt .
The balance of payments no longer balances .
Meanwhile , @ @ @ @ @ @ @ still needs to be financed .
In effect , the foreign holders of dollars are sending a clear message : “ The interest I earn on my dollars fails to compensate me for potential capital losses , and so long as that is the case , I will continue to sell my dollars ” .
Though unwelcome , the only solution to a falling dollar becomes clear : a rise in interest rates will be necessary for the currency to be stabilised in the foreign exchanges .
Communication Miracles ... Robinson , Jonathan @ @ @ @ @ @ @ $ 10.38 This solution is only accepted by the Keynesian priesthood with the greatest reluctance , and is seen as a last resort , in denial of the failure of their cherished beliefs .
They start by intervening in the foreign exchanges , but to no avail .
They may introduce price controls .
They may suppress or confiscate key inflation markers , such as ownership of gold .
All this is to no avail .
The longer they delay , the higher must be the hike in interest rates to protect the @ @ @ @ @ @ @ a significant element in the government ’ s budget , higher interest rates make the situation for it even worse .
The government is ensnared in a debt trap , from which , in the absence of massive cuts in spending , there can only be one outcome : the bankruptcy of the government , and indebted businesses with accumulated malinvestments shut out of credit markets .
These zombies form a substantial part of the US economy , as they do in Europe , the UK and Japan , and a significant portion @ @ @ @ @ @ @ to the banks ) is exposed to their inevitable failure .
Keynesians and MMT supporters tell us that a government that issues debt in its own currency can not go bankrupt .
They avoid telling us that the condition is only true so long as there is some value yet to extract from the diminishing purchasing power of its inflating currency .
At this juncture , let us take stock of the current situation facing the dollar and its immediate future : • Hyperinflation of the dollar commenced in the second half of @ @ @ @ @ @ @ , a condition which is bound to continue , so long as Keynesian beliefs and the electoral mandate to prevent an economic slump at all costs persist .
• The $ 900bn covid temporary relief package , currently rejected by President Trump as too small , will be followed by further inflationary financing in 2021 , which will of necessity be larger than that of fiscal 2H 2020 .
A moment ’ s thought on the evolving scale of the covid crisis should put all doubts to rest that this is the case @ @ @ @ @ @ @ foreign ownership of US dollar financial assets and cash deposits in the US banking system amounted to $ 28.5 trillion .
The momentum behind the maintenance of the balance of payments is clearly diminishing and we can confidently expect further selling in the foreign exchanges to drive the dollar significantly lower .
• The fall in the dollar on the foreign exchanges will require an increase in interest rates to stabilise it .
An increase in dollar rates at a time of growing economic difficulties goes against the Keynesian creed , will be @ @ @ @ @ @ @ of government deficit financing .
Being unable to refinance their debt , zombie corporations will begin to collapse , and a full-scale economic crisis ensues .
These developments are in process or can now be anticipated with a high degree of certainty .
The only thing to add is that all other fiat currencies are affected by similar inflationary factors .
For simplicity ’ s sake the ratio between the dollar ’ s purchasing power on the foreign exchanges and commodity markets is considered to be a separate topic , so as to @ @ @ @ @ @ @ widespread currency failure .
To the current observable developments listed above , we can add the following bullet points , which are likely to evolve from them .
Someone Like You : A Novel Kingsbury , Karen Best Price : $ 12.60 Buy New $ 11.15 • A global banking crisis is unavoidable , probably starting in the Eurozone .
US bank exposure to EU banking deposits in dollars will be withdrawn and sold .
Instead of a flight to dollar safety , it is likely that there will be an intensified flight @ @ @ @ @ @ @ banks , such as the British , and those with foreign-owned prime brokers could result in substantial disruption in US financial markets .
It is certain that the US Treasury and the Fed will continue to underwrite risks in the entire US banking system in that event .
• The US banking system will have to absorb bad debts from both covid and supply chain failures .
The sheer scale of these probably constitute a greater threat to US banks than counterparty risks from foreign bank failures , but a combination of the @ @ @ @ @ @ @ the US and elsewhere will be considerably more difficult to deal with than the Lehman crisis twelve years ago .
• In the wake of a banking crisis , equity markets are bound to suffer a major reverse .
The consequences are that the mirage of wealth creation in financial markets will disappear and foreign selling of financial assets and of the dollar will almost certainly accelerate .
• Bank loans secured with financial assets will no longer be covered , leading to the possibility of a repeat of the domino effect behind @ @ @ @ @ @ @ • The Fed has managed to keep the purchasing power of the dollar stable by maintaining an asset bubble in US Treasury debt , and by extension in US equities .
A combination of banking problems and rising interest rates forced on the Fed by the foreign exchanges will end these conditions and inevitably the dollar will then be taken down with collapsing bond and equity markets .
Clearly , the violence of these likely events has the potential to challenge the American public ’ s confidence in the dollar over a foreshortened @ @ @ @ @ @ @ the public believes in the government ’ s control over markets .
People are generally unaware of the dangers ahead .
But as a cohort , they are beginning to drift into one or the other of the other two cohorts : supporters of cryptocurrencies and precious metals .
The outcome of current inflationary policies is increasingly obvious to those who care to think about it .
We are coming to the end of the monetary era of fiat currencies .
The common assumption of those aware of it appears to be that @ @ @ @ @ @ @ by governments , clubbing together to manage the situation .
Attempts to develop central bank digital currencies are consistent with governments seeking an alternative to existing currencies , but CBDCs are still fiat and will not survive the public ’ s rejection of unbacked government money .
The problem with a government monetary reset is it ignores the origin of the problem — that governments can not be trusted with money .
While a government reset might be attempted it is bound to fail , because on the basis of experience humanity will @ @ @ @ @ @ @ backed with metallic money , or as bitcoin hodlers presumably hope , governments abandon the money business entirely .
However , successful action will be borne out of a crisis , and the only available anchor to money is gold , owned in quantity by central banks and government treasury departments .
Anyone who thinks governments will just stand back and let the people decide for themselves what is money , leading to us carrying around gold and silver coins , or transacting with cryptocurrencies between mobile phones , has failed to learn @ @ @ @ @ @ @ only to prevent individuals taking away control of money from the state completely , governments will be forced to turn what is left of fiat money into gold substitutes to ensure widespread distribution .
In this context , a gold substitute is a form of money exchangeable on demand by the holder for gold coinage at a fixed rate .
In other words , the monetary system can only return to the generally accepted monetary conditions that existed prior to the First World War .
There will be other difficulties .
The Keynesian @ @ @ @ @ @ @ an intellectual vacuum .
Being the only nations with unencumbered and undeclared bullion reserves free of leasing and other forms of double-counting , China and Russia will probably be the first to credibly back their currencies with gold substitutes , while the geopolitical implications and the loss of the dollar ’ s hegemonic role is bound to be taken badly in Washington .
But we know the eventual outcome .
The only question is how long it will take for the crisis to accelerate and end , and how long it will take @ @ @ @ @ @ @ as backing for their new currencies , acting as gold substitutes .
Most governments have gold : none of them have bitcoin .
In the markets , there is considerable uncertainty over the monetary qualifications of leading cryptocurrencies , particularly bitcoin .
Other than mainstream investors , who still cling to the Keynesian creed , there is an emerging crypto cohort who have so far not addressed the subject of a possible replacement of fiat adequately , riding high on recent price gains for bitcoin and other cryptocurrencies , which they persist in @ @ @ @ @ @ @ .
In other words , they understand the effect of the relative rates of issue between cryptos like bitcoin and fiat currencies , and they buy into the concept that cryptos are potentially a better form of money than state-issued fiat for that reason .
But for nearly all of them fiat unconsciously remains the principal form of money : fiat remains the objective value in crypto transactions .
There is little doubt that measured in fiat cryptos such as bitcoin can continue to rise priced in fiat significantly from here , and @ @ @ @ @ @ @ the fiat cohort are now buying into this concept .
With central banks working on their own centralised digital currencies , respectability is loaned to the crypto class .
The lack of new supply in bitcoin in particular presents an attractive performance opportunity relative to other portfolio investment assets .
In other words , this current wave of cryptocurrency buying is not with the intention of hedging out of fiat risk but intended to be sold for fiat at a future date .
The conditions likely to benefit the crypto cohort most are @ @ @ @ @ @ @ never quite dies and therefore is never actually replaced .
That condition , such as occurs in Argentina , requires a better form of money , in this case dollars , to circulate alongside the peso .
And because the economic activity continues with the sounder currency , the depreciating peso continues with it .
The more likely outcome , a collapse of the whole fiat currency regime and its replacement with gold substitutes raises the question that really matters : can distributed ledger cryptocurrencies survive being priced in gold ?
In any @ @ @ @ @ @ @ how they can be used as a pricing medium , assuming state currencies re-emerge as credible gold substitutes .
If they are to gain a monetary role , cryptos will need to be stable enough to act as the objective value in transactions .
Furthermore , future values need to be both stable and calculable so that business investment in production of both consumer goods and of the higher levels of production can be contemplated .
It is all very well for the crypto cohort to revel in spectacular gains measured against fiat @ @ @ @ @ @ @ , say , bitcoin , is faced with the prospect of significantly lower prices for his end product measured in bitcoin , it is no use to him as a financing medium .
This is probably the most important reason cryptocurrencies can not act as money .
Their innate volatility and inflexibility render them unsuitable for the financing of production .
And without the money function the idea of bitcoin continuing to act as a store of value is only possible until the successor to fiat is a stable form of money .
@ @ @ @ @ @ @ , a return to monetary stability will make hoarding money largely redundant , replaced by personal liquidity relative to anticipated purchases of goods , and savings , whereby hoarded money is invested in and loaned to businesses .
If the successor to fiat is to be bitcoin , it will have to survive this radical change of use .
Furthermore , consideration must be given to the financial structure of a post-fiat world .
Today the sum total of OTC derivatives is over $ 600 trillion according to the bank for International Settlements @ @ @ @ @ @ @ in listed futures and a further $ 43 trillion in options .
These are paper on paper , which will evaporate with fiat , destroying the financial world as we know it .
Speculation and the pseudo-speculation of risk hedging with derivatives will die .
Unfortunately for lovers of cryptocurrencies , if , as we must conclude , gold wins the race for the replacement of fiat , they will have turned out to have been mere speculation , drowned alongside all that paper .
Nevertheless , the crypto cohort is likely to @ @ @ @ @ @ @ it sparks an early realisation in a growing part of the wider population about what government is doing with money .
That is likely to speed up the collapse of fiat currencies compared to what would otherwise occur .
Like the crypto cohort , supporters of precious metals taking over the role of money are considerably smaller than the mainstream .
We can exclude investors in mining shares and physical ETFs on the basis they are only seeking exposure to them as investments , intending to measure and take their profits in them @ @ @ @ @ @ @ a fiat currency retaining its role of objective value .
And promoters such as the World Gold Council dare not mention the moneyness of gold for fear of frightening off investors in their ETF .
The true supporters of metallic money are those who hoard bullion and coin , ensuring there is no counterparty risk .
Not only does this rule out securitised representations of precious metals , but putting them under the control of a bank , even on an allocated basis , does not qualify as clear title of ownership .
@ @ @ @ @ @ @ , silver , is a bridge to a post-fiat future .
As argued above , after an unsettling period the future is almost certainly based on gold and fiat money being reassigned to become gold substitutes .
Unlike bitcoin , gold possess a flexible supply , which is determined by its users and is beyond the control of governments .
To annual mine supply is added gold being used for non-monetary purposes .
A rise in gold ’ s purchasing power leads automatically to an increase in supply from sources such as jewellery @ @ @ @ @ @ @ in purchasing power leads to increased jewellery sales .
In any event , throughout recorded history the additions from mining to above-ground gold stocks have approximated to population growth , making gold for money purposes no less scarce today than it was in the past .
This flexibility in the supply of monetary gold and the stability of prices allows the originary rate of interest to be both low and stable .
It allows entrepreneurs to do business calculations with a high degree of certainty , knowing in terms of goods the value @ @ @ @ @ @ @ time .
And savers , who provide the monetary capital for future production can be confident of the future capital value of their savings when lending them for business investment purposes .
A return to the monetary arrangements that existed before the Fits World War shows that price stability combined with free markets and free trade , as argued and demonstrated by adherents of the Manchester school in the nineteenth century , is the sure path to future prosperity in a post-fiat world .
The views and opinions expressed in this article are @ @ @ @ @ @ @ and do not reflect those of Goldmoney , unless expressly stated .
The Best of Alasdair Macleod

The world stands on the threshold of monetary hyperinflation with the US dollar leading the way. The final months of fiat money are coming into view.
What will replace them — bitcoin or gold?
This article argues that the final solution is bound to be with central banks and government treasury departments retaining their control as issuers of money by the only means at their disposal: deploying their gold reserves to back their currencies, not as fiat, but as credible gold substitutes.
Central banks own no bitcoin, which effectively rules it out. They may try their own equivalents, central bank digital currencies, but they are simply another form of fiat money and will also fail — assuming there is enough time for them to be introduced. In any event, the eventual replacement for fiat money needs to be beyond government control (other than the state acting as a monetary trustee, ensuring gold coins are always available for exchange) and flexible enough for its users to collectively set the quantity that acts as money. A formulaic medium such as bitcoin does not provide this flexibility, but gold clearly does and has proved its suitability in the past.
Introduction
Only Her Christmas Mir... Checketts, Cami Buy New $12.99 (as of 10:02 UTC - Details) For anyone interested in the history and qualifications of money as a circulating medium the current times are fascinating, being the fin de siècle of fiat currencies. Any doubt that fiat currencies are failing is being banished. The days when governments can finance their schemes by debauching their currency are numbered. Consequences flow.
A meaningful debate about why they are failing is yet to be had. Only very few, who have an idea of monetary history and an understanding of the economics of inflation, are aware of an impending monetary crisis, but there are early signs they are being joined by a widening circle of thinkers. But for all the believers in the macroeconomics of Keynes, there is for the moment, a state of profitable bliss, of money-making in anything financial. They do not realise it yet, but when everything rises in price it is because the purchasing power of the currency in which they are measured is falling.
But belief for these macroeconomic investors is everything, because with belief you can evade reality. Belief is a condition where things held in the mind are true. There can be no evaluation. It provides the foundations of attitude and behaviour. Over the decades the Keynesian cohort has led itself to believe in governments and their statistics at the expense of humanity and those beliefs have become increasingly divorced from economic reality. For them, inflation is no longer of money, but redesignated to prices, leaving the weapon of debasement concealed from the public. Prices are indexed to rise by a targeted two per cent — paying that little bit more for everything every year is good for us, apparently. Bull markets are perpetual. Banks will always be bailed, so counterparty risk becomes a theoretical problem, never to be realised. And while most of us might be persuaded these speed bumps are inevitable, we now find that whole economies need to be bailed.
It is all thanks to the magic money tree, which can be stripped repeatedly by central banks, now that official inflation, which everyone accepts as the truth, is contained by a goal-sought two per cent. The belief that a rising GDP represents economic growth allows governments to make up the numbers simply by spending more. And because the continual debasement of the currency guarantees that the dumbest trend follower will make money in financial markets, Keynesian beliefs continue to be reinforced, notwithstanding the reality.
Of one thing we can be certain and that is hyperinflation of the quantity of money will destroy the mainstream’s dreams. That time is now upon us, but the blind deaf and mute Keynesians and their followers will wake up to reality late in the hyperinflationary collapse.
There are two other cohorts we must consider: those who believe that gold and/or silver will return as money out of the destruction of fiat, and a new class of believer who understands the relative supply dynamics of bitcoin relative to the rapid and increasing expansion of government currency. There is a gentle rivalry between believers in precious metals and cryptocurrencies, the former sticking to the lessons of history and the latter enthused by the technology.
The problem we have to deal with is that, for now, the majority in all three cohorts are comprised of believers and not realists. They all believe they are right but have applied little thought to the demise of fiat and what it means. Nor have they stopped to think how its replacement will come about and what that replacement will be. This article attempts to answer these questions.
The certainly of fiat destruction
Now that fully two-thirds of US Government spending in the second half of fiscal 2020 was funded by monetary inflation (the other third being from revenues which fell sharply) we can say that without a miraculous change in circumstances and financing policies, the dollar is on a hyperinflationary course. For what has happened is continuing to happen, and irrespective of who commands the White House in late-January, the political imperative rules out cuts in government spending and demands it to be increased instead, even while government revenues continue to fall. The Greatest Salesman ... Mandino, Og Best Price: $1.69 Buy New $6.11 (as of 10:02 UTC - Details)
In the face of mounting bankruptcies and supply chain failures it behoves the government to do whatever it takes to rescue businesses and prevent an economic slump. Its advisers are Keynesian priest-like figures, who argue that government spending must be increased to save the economy. They say more deficit spending is required, and modern monetary theorists argue that the increase in government debt will be owed to itself. In this the MMTs have a minor point: US Treasuries bought by the Fed is effectively debt owed to the government by a government department, its own central bank. But otherwise, MMT is simply a justification for unfettered inflationary financing of government spending.
The hyperinflationary conditions in the second half of fiscal 2020 are therefore certain to continue, and as the dollar is diluted by successive increases in its quantity, the nominal amounts of inflationary issues of money and credit must rise to achieve the imaginary benefit. At the time of writing, a stopgap of $900bn has currently been agreed in Congress, but President Trump has rejected it as being too little and reflecting vested interests. Further increases will inevitably follow, because the Keynesian priesthood knows of no other means of dealing with the current economic situation.
Monetary debasement can only continue for as long as its users continue to accept fiat currency as the medium of exchange. To reject an established unbacked state currency for transactional purposes is a last resort, and naturally, in the general public there is great reluctance to do so. But, unless the government reins in its spending and balances its budget, the fate of its currency is for it to be eventually rejected and to become useless.
The path to valuelessness is uneven, faith being maintained in the currency until it is no longer tenable. The dilution of its purchasing power by the inflation of its quantity is one factor; faith in it is ultimately the overriding factor. The continual abuse of that faith is what leads to a currency’s demise. The first to be alerted are the users of foreign exchanges, and it is here that the dollar will face a destructive weakening. Foreigners own considerably more dollars and dollar-denominated assets than Americans own the equivalent of in foreign currencies. Having had the exorbitant privilege of issuing the world’s reserve currency for seventy-five years, most American ownership of foreign-related financial assets is denominated in their own dollars.
A year ago, many of my American friends argued that I was wrong to be bearish about the dollar because foreigners would always need to own them, and in the event of a worldwide financial or economic panic, they would increase their demand for dollars as a safe haven. It is an argument that is only valid so long as the dollar is not over-owned; but in a contracting global economy with diminishing international trade the dollar is needlessly owned and is already being sold down.
The history of fiat money breakdowns usually features a substantial fall in the currency’s purchasing power on the foreign exchanges before the domestic population becomes aware of what is happening to its medium of exchange. The fall in foreign exchange values is accompanied naturally by a rise in prices for commodities and raw materials. The Keynesian priesthood initially argues in favour of the benefits of a weaker currency, measured against other currencies and not so much against commodities, because it becomes more competitive for trade purposes, until, of course, the fall in international purchasing power creates embarrassing problems. The first of these is the withdrawal of the government’s principal source of finance that does not originate from its central bank: foreigners no longer retaining net dollar surpluses from the balance of trade to reinvest in government, corporate and agency debt. The balance of payments no longer balances.
Meanwhile, government spending in excess of tax income still needs to be financed. In effect, the foreign holders of dollars are sending a clear message: “The interest I earn on my dollars fails to compensate me for potential capital losses, and so long as that is the case, I will continue to sell my dollars”. Though unwelcome, the only solution to a falling dollar becomes clear: a rise in interest rates will be necessary for the currency to be stabilised in the foreign exchanges. Communication Miracles... Robinson, Jonathan Check Amazon for Pricing.
This solution is only accepted by the Keynesian priesthood with the greatest reluctance, and is seen as a last resort, in denial of the failure of their cherished beliefs. They start by intervening in the foreign exchanges, but to no avail. They may introduce price controls. They may suppress or confiscate key inflation markers, such as ownership of gold. All this is to no avail. The longer they delay, the higher must be the hike in interest rates to protect the currency. But with interest costs already a significant element in the government’s budget, higher interest rates make the situation for it even worse.
The government is ensnared in a debt trap, from which, in the absence of massive cuts in spending, there can only be one outcome: the bankruptcy of the government, and indebted businesses with accumulated malinvestments shut out of credit markets. These zombies form a substantial part of the US economy, as they do in Europe, the UK and Japan, and a significant portion of bank credit (and therefore losses to the banks) is exposed to their inevitable failure.
Keynesians and MMT supporters tell us that a government that issues debt in its own currency cannot go bankrupt. They avoid telling us that the condition is only true so long as there is some value yet to extract from the diminishing purchasing power of its inflating currency.
At this juncture, let us take stock of the current situation facing the dollar and its immediate future:
• Hyperinflation of the dollar commenced in the second half of fiscal 2020 (March to September), a condition which is bound to continue, so long as Keynesian beliefs and the electoral mandate to prevent an economic slump at all costs persist.
• The $900bn covid temporary relief package, currently rejected by President Trump as too small, will be followed by further inflationary financing in 2021, which will of necessity be larger than that of fiscal 2H 2020. A moment’s thought on the evolving scale of the covid crisis should put all doubts to rest that this is the case.
• At the last count, foreign ownership of US dollar financial assets and cash deposits in the US banking system amounted to $28.5 trillion. The momentum behind the maintenance of the balance of payments is clearly diminishing and we can confidently expect further selling in the foreign exchanges to drive the dollar significantly lower.
• The fall in the dollar on the foreign exchanges will require an increase in interest rates to stabilise it. An increase in dollar rates at a time of growing economic difficulties goes against the Keynesian creed, will be unavoidable, and will seal the fate of government deficit financing. Being unable to refinance their debt, zombie corporations will begin to collapse, and a full-scale economic crisis ensues.
These developments are in process or can now be anticipated with a high degree of certainty. The only thing to add is that all other fiat currencies are affected by similar inflationary factors. For simplicity’s sake the ratio between the dollar’s purchasing power on the foreign exchanges and commodity markets is considered to be a separate topic, so as to not confuse the basic issues of a widespread currency failure.
To the current observable developments listed above, we can add the following bullet points, which are likely to evolve from them. Someone Like You: A Novel Kingsbury, Karen Best Price: $1.75 Buy New $10.73 (as of 10:02 UTC - Details)
• A global banking crisis is unavoidable, probably starting in the Eurozone. US bank exposure to EU banking deposits in dollars will be withdrawn and sold. Instead of a flight to dollar safety, it is likely that there will be an intensified flight from dollars. Counterparty risks with other banks, such as the British, and those with foreign-owned prime brokers could result in substantial disruption in US financial markets. It is certain that the US Treasury and the Fed will continue to underwrite risks in the entire US banking system in that event.
• The US banking system will have to absorb bad debts from both covid and supply chain failures. The sheer scale of these probably constitute a greater threat to US banks than counterparty risks from foreign bank failures, but a combination of the two will ensure a banking crisis in the US and elsewhere will be considerably more difficult to deal with than the Lehman crisis twelve years ago.
• In the wake of a banking crisis, equity markets are bound to suffer a major reverse. The consequences are that the mirage of wealth creation in financial markets will disappear and foreign selling of financial assets and of the dollar will almost certainly accelerate.
• Bank loans secured with financial assets will no longer be covered, leading to the possibility of a repeat of the domino effect behind the multiple banking failures in 1930-33.
• The Fed has managed to keep the purchasing power of the dollar stable by maintaining an asset bubble in US Treasury debt, and by extension in US equities. A combination of banking problems and rising interest rates forced on the Fed by the foreign exchanges will end these conditions and inevitably the dollar will then be taken down with collapsing bond and equity markets.
Clearly, the violence of these likely events has the potential to challenge the American public’s confidence in the dollar over a foreshortened period of time. For now, the public believes in the government’s control over markets. People are generally unaware of the dangers ahead. But as a cohort, they are beginning to drift into one or the other of the other two cohorts: supporters of cryptocurrencies and precious metals.
Dealing with a fiat currency collapse
The outcome of current inflationary policies is increasingly obvious to those who care to think about it. We are coming to the end of the monetary era of fiat currencies. The common assumption of those aware of it appears to be that it will lead to a reset controlled by governments, clubbing together to manage the situation. Attempts to develop central bank digital currencies are consistent with governments seeking an alternative to existing currencies, but CBDCs are still fiat and will not survive the public’s rejection of unbacked government money.
The problem with a government monetary reset is it ignores the origin of the problem — that governments cannot be trusted with money. While a government reset might be attempted it is bound to fail, because on the basis of experience humanity will reject it, unless it is credibly backed with metallic money, or as bitcoin hodlers presumably hope, governments abandon the money business entirely.
However, successful action will be borne out of a crisis, and the only available anchor to money is gold, owned in quantity by central banks and government treasury departments. Anyone who thinks governments will just stand back and let the people decide for themselves what is money, leading to us carrying around gold and silver coins, or transacting with cryptocurrencies between mobile phones, has failed to learn the lesson of government control. If only to prevent individuals taking away control of money from the state completely, governments will be forced to turn what is left of fiat money into gold substitutes to ensure widespread distribution. In this context, a gold substitute is a form of money exchangeable on demand by the holder for gold coinage at a fixed rate. In other words, the monetary system can only return to the generally accepted monetary conditions that existed prior to the First World War.
There will be other difficulties. The Keynesian priesthood will have been discredited, leaving an intellectual vacuum. Being the only nations with unencumbered and undeclared bullion reserves free of leasing and other forms of double-counting, China and Russia will probably be the first to credibly back their currencies with gold substitutes, while the geopolitical implications and the loss of the dollar’s hegemonic role is bound to be taken badly in Washington.
But we know the eventual outcome. The only question is how long it will take for the crisis to accelerate and end, and how long it will take for governments to reinstate their gold reserves as backing for their new currencies, acting as gold substitutes. Most governments have gold: none of them have bitcoin.
The crypto cohort
In the markets, there is considerable uncertainty over the monetary qualifications of leading cryptocurrencies, particularly bitcoin. Other than mainstream investors, who still cling to the Keynesian creed, there is an emerging crypto cohort who have so far not addressed the subject of a possible replacement of fiat adequately, riding high on recent price gains for bitcoin and other cryptocurrencies, which they persist in measuring in dollars and other national currencies. In other words, they understand the effect of the relative rates of issue between cryptos like bitcoin and fiat currencies, and they buy into the concept that cryptos are potentially a better form of money than state-issued fiat for that reason. But for nearly all of them fiat unconsciously remains the principal form of money: fiat remains the objective value in crypto transactions.
There is little doubt that measured in fiat cryptos such as bitcoin can continue to rise priced in fiat significantly from here, and growing numbers of respected investment managers in the fiat cohort are now buying into this concept. With central banks working on their own centralised digital currencies, respectability is loaned to the crypto class. The lack of new supply in bitcoin in particular presents an attractive performance opportunity relative to other portfolio investment assets. In other words, this current wave of cryptocurrency buying is not with the intention of hedging out of fiat risk but intended to be sold for fiat at a future date.
The conditions likely to benefit the crypto cohort most are the continual existence of depreciating fiat which never quite dies and therefore is never actually replaced. That condition, such as occurs in Argentina, requires a better form of money, in this case dollars, to circulate alongside the peso. And because the economic activity continues with the sounder currency, the depreciating peso continues with it. The more likely outcome, a collapse of the whole fiat currency regime and its replacement with gold substitutes raises the question that really matters: can distributed ledger cryptocurrencies survive being priced in gold?
In any event, it is hard to see how they can be used as a pricing medium, assuming state currencies re-emerge as credible gold substitutes. If they are to gain a monetary role, cryptos will need to be stable enough to act as the objective value in transactions. Furthermore, future values need to be both stable and calculable so that business investment in production of both consumer goods and of the higher levels of production can be contemplated. It is all very well for the crypto cohort to revel in spectacular gains measured against fiat currencies, but if a borrower of, say, bitcoin, is faced with the prospect of significantly lower prices for his end product measured in bitcoin, it is no use to him as a financing medium.
This is probably the most important reason cryptocurrencies cannot act as money. Their innate volatility and inflexibility render them unsuitable for the financing of production. And without the money function the idea of bitcoin continuing to act as a store of value is only possible until the successor to fiat is a stable form of money. Whatever that outcome turns out to be, a return to monetary stability will make hoarding money largely redundant, replaced by personal liquidity relative to anticipated purchases of goods, and savings, whereby hoarded money is invested in and loaned to businesses. If the successor to fiat is to be bitcoin, it will have to survive this radical change of use.
Furthermore, consideration must be given to the financial structure of a post-fiat world. Today the sum total of OTC derivatives is over $600 trillion according to the bank for International Settlements, with a further $30 trillion in listed futures and a further $43 trillion in options. These are paper on paper, which will evaporate with fiat, destroying the financial world as we know it. Speculation and the pseudo-speculation of risk hedging with derivatives will die. Unfortunately for lovers of cryptocurrencies, if, as we must conclude, gold wins the race for the replacement of fiat, they will have turned out to have been mere speculation, drowned alongside all that paper.
Nevertheless, the crypto cohort is likely to have an important effect, in that it sparks an early realisation in a growing part of the wider population about what government is doing with money. That is likely to speed up the collapse of fiat currencies compared to what would otherwise occur.
The gold cohort
Like the crypto cohort, supporters of precious metals taking over the role of money are considerably smaller than the mainstream. We can exclude investors in mining shares and physical ETFs on the basis they are only seeking exposure to them as investments, intending to measure and take their profits in them at a future date — again in a fiat currency retaining its role of objective value. And promoters such as the World Gold Council dare not mention the moneyness of gold for fear of frightening off investors in their ETF.
The true supporters of metallic money are those who hoard bullion and coin, ensuring there is no counterparty risk. Not only does this rule out securitised representations of precious metals, but putting them under the control of a bank, even on an allocated basis, does not qualify as clear title of ownership.
The retention of physical gold and arguably, silver, is a bridge to a post-fiat future. As argued above, after an unsettling period the future is almost certainly based on gold and fiat money being reassigned to become gold substitutes. Unlike bitcoin, gold possess a flexible supply, which is determined by its users and is beyond the control of governments. To annual mine supply is added gold being used for non-monetary purposes. A rise in gold’s purchasing power leads automatically to an increase in supply from sources such as jewellery though enhanced scrap, and a fall in purchasing power leads to increased jewellery sales. In any event, throughout recorded history the additions from mining to above-ground gold stocks have approximated to population growth, making gold for money purposes no less scarce today than it was in the past.
This flexibility in the supply of monetary gold and the stability of prices allows the originary rate of interest to be both low and stable. It allows entrepreneurs to do business calculations with a high degree of certainty, knowing in terms of goods the value of money in five- or ten-years’ time. And savers, who provide the monetary capital for future production can be confident of the future capital value of their savings when lending them for business investment purposes.
A return to the monetary arrangements that existed before the Fits World War shows that price stability combined with free markets and free trade, as argued and demonstrated by adherents of the Manchester school in the nineteenth century, is the sure path to future prosperity in a post-fiat world.
The views and opinions expressed in this article are those of the author(s) and do not reflect those of Goldmoney, unless expressly stated.
Reprinted with permission from Goldmoney.
The Best of Alasdair Macleod


Show Respect?

An even better way than ordering you to do something is to make you feel bad about not doing something .
Then it isn ’ t necessary to order you to do it .
Communists excel at this .
They make it a moral crime to assert your individuality .
They shame you for not being – as the current saying has it – all in this together .
They being the ones who decide what “ this ” is .
Your duty being to obey what they say .
Not because it ’ s the law – but because @ @ @ @ @ @ @ a bad person .
One can see this almost everywhere .
Injunctions not merely to “ wear a mask ” but to “ show respect ” and that “ you care.
” The obvious implication being that if you do not wear the Holy Rag then you don ’ t care – and aren ’ t being respectful .
Which is , of course , true – and ought to be loudly proclaimed .
Why should anyone care what some other person believes if what the person believes is absurd ?
Put more @ @ @ @ @ @ @ to respect the other person ’ s right to go about their business however they wish , to the extent they don ’ t impose their absurd beliefs upon others .
God in the ICU : Sudden ... Walker , Dr Dave A Best Price : $ 4.45 Buy New $ 10.00 Michael Jackson wasn ’ t turned away from stores , told he couldn ’ t work unless he took off his “ mask.
” Most employers won ’ t fire an otherwise competent worker simply because he washes his hands a @ @ @ @ @ @ @ you like .
.
.
so long as you leave me be .
Michael Jackson was less a freak than many of the people one sees walking around today in that he didn ’ t scream at people who weren ’ t wearing a “ mask ” or who got closer than six feet to his presence .
Even he understood that aberrance doesn ’ t impose obligations on the non-aberrant .
The “ mask ” pushers are precisely that , even if many of those who wear the “ mask ” don @ @ @ @ @ @ @ latter-day Useful Idiots – the term used by Lenin to describe people duped into believing something in order to get them to do something .
Lenin got people to believe in “ land and peace ” – the early slogans of a political movement determined to seize all land and give no one peace .
The Useful Idiots fell for it .
Lenin – perhaps the most brilliant practical politician of all time – would tell people anything in order to get them to believe .
The Best of Eric Peters

An even better way than ordering you to do something is to make you feel bad about not doing something. Then it isn’t necessary to order you to do it.
Communists excel at this. They make it a moral crime to assert your individuality. They shame you for not being – as the current saying has it – all in this together.
They being the ones who decide what “this” is.
Your duty being to obey what they say. Not because it’s the law – but because if you don’t you are a bad person.
One can see this almost everywhere. Injunctions not merely to “wear a mask” but to “show respect” and that “you care.” The obvious implication being that if you do not wear the Holy Rag then you don’t care – and aren’t being respectful.
Which is, of course, true – and ought to be loudly proclaimed.
Why should anyone care what some other person believes if what the person believes is absurd? Put more finely, one may have an obligation to respect the other person’s right to go about their business however they wish, to the extent they don’t impose their absurd beliefs upon others. God in the ICU: Sudden... Walker, Dr Dave A Best Price: $2.50 Buy New $5.51 (as of 10:02 UTC - Details)
Michael Jackson wasn’t turned away from stores, told he couldn’t work unless he took off his “mask.” Most employers won’t fire an otherwise competent worker simply because he washes his hands a dozen times a day.
People’s quirks shouldn’t be actionable in a free country.
Do as you like . . . so long as you leave me be.
Michael Jackson was less a freak than many of the people one sees walking around today in that he didn’t scream at people who weren’t wearing a “mask” or who got closer than six feet to his presence. Even he understood that aberrance doesn’t impose obligations on the non-aberrant.
Of course, Michael Jackson wasn’t a communist.
The “mask” pushers are precisely that, even if many of those who wear the “mask” don’t understand this. They are latter-day Useful Idiots – the term used by Lenin to describe people duped into believing something in order to get them to do something.
Lenin got people to believe in “land and peace” – the early slogans of a political movement determined to seize all land and give no one peace. The Useful Idiots fell for it. Lenin – perhaps the most brilliant practical politician of all time – would tell people anything in order to get them to believe.
Read the Whole Article
The Best of Eric Peters