5 When the Lamb opened the third seal, I heard the third living creature say, “Come!” I looked, and there before me was a black horse! Its rider was holding a pair of scales in his hand.6 Then I heard what sounded like a voice among the four living creatures, saying, “Two pounds[a] of wheat for a day’s wages,[b] and six pounds[c] of barley for a day’s wages,[d] and do not damage the oil and the wine!”
(Revelation 6)
Germany suffered two currency collapses in the last century, in 1920-23 and1945-48. The architect of the recovery from the former, Hjalmar Schacht, chose to cooperate with the Nazi successors to the Weimar Republic, and failed. In that of the second, Ludwig Erhard remained true to his free market credentials and succeeded. While they were in different circumstances, comparisons between the two events might give some guidance to politicians faced with similar destructions of their state currencies, which is a growing possibility.
Let us assume the next credit crisis is on its way. Given enhanced levels of government debt, it is likely to be more serious than the last one in 2008.
And note the IMF recently warned that $19 trillion in corporate debt is a systemic timebomb, and that collateralised loan obligations and direct exposure to junk held by the US commercial banks is approximately equal to the sum of their equity.
Then we can say with some confidence that a major credit crisis is developing, and that it will almost certainly be far greater than Lehman. We can also say that the money-printing by central banks to rescue both the banking system and government finances will be on a far greater scale, likely to destabilise the purchasing power of government currencies.
The end of currencies might not be immediate. The lessons from the past tell us that the public can be slow to recognise what is happening to their money and savings. Currency collapses have happened in individual currencies before, but next time it appears it will be a common fate faced by all major currencies.
But fiat currencies die. Other than today’s currencies that have yet to do so they always have, and any student of money and the exchanges should be able to detect signs of their demise as well. The death of a currency is painful for all those involved. It is a national bankruptcy, but even though it is difficult to see how, nations and their peoples do survive the destruction of their currencies.
If a widespread currency collapse takes sterling with it, the political class will be unable to stop it. Then, will Boris be a Hjalmar Schacht, or a Ludwig Erhardt, both of which saw a collapse of the mark at different times and managed the subsequent recovery. It is an interesting thought.
Central banks are easing, and stocks have reached a record high. But that doesn’t mean that everything is okay. Jeffrey Gundlach sees big trouble ahead. The CEO of the investment firm DoubleLine is worried about the development of corporate debt. But also the levels of government debt and the US equity markets are not sustainable. According to Gundlach, investors have to brace for significant disruptions.
Mr. Gundlach, what would you recommend to investors?
They need to position themselves for the next global downturn because it will lead to substantial changes in the markets.
When will the downturn come?
It doesn’t matter whether it comes in one year or four. If you don’t start preparing now, you will maybe do better while the economy continues to do okay, but whatever gain you get from that will be overwhelmed by problems with your investments in the downturn.
Do you see any historical parallels?
It feels like 2006 when people realized that there was tremendous over-leverage and that it would lead to an extraordinary collapse in credit.
The globalists and banking elites have been running the “order out of chaos” scam for a long time, centuries in fact. One thing that practice does is make people of otherwise average intelligence appear brilliant. One thing that organized conspiracy does is make a group of highly vulnerable criminals appear omnipotent and untouchable. Ultimately, it's all about time.
The globalists have had lots of time to tune and refine their methods for manipulating the collective psyche of the masses.
They make mistakes often, but as long as no one confronts them directly and removes these people from the equation, they simply set up shop elsewhere under a different name using different masks and continue their insidious work.
As long society is still stricken with ignorance and assumes that such conspiracies are “impossible”, the elites have a free hand to victimize the population further. As long as academic idiots misinterpret Occam's Razor and insist that the evidence of conspiracy does not matter because it does not fit with their narrow notion of “the simplest explanation”, they prop up the banking cartel and allow it to thrive.
On the positive side, I see an awakening taking place among a subset of the population which is savvy to the games of the globalists. I believe this subtle wave of analytical samurai has the elites worried; they realize that time for them is, for once in history, starting to run out. One day soon, they may find themselves the direct targets of a revolution, and they don't like that idea.
Hence, the globalists need a plan, a con game of epic proportions on top of one of the largest economic bubbles in recent history.
The plan relies first on a tried and true weapon of the elites: Co-option of the people that oppose them. And how does one co-opt a movement? By taking over their leadership. Second, for global change the cabal needs a global distraction, or a firestorm of numerous distractions to keep the public enthralled or in fear. Third, they need to divert blame away from themselves by presenting the public with believable scapegoats.
They make mistakes often, but as long as no one confronts them directly and removes these people from the equation, they simply set up shop elsewhere under a different name using different masks and continue their insidious work.
As long society is still stricken with ignorance and assumes that such conspiracies are “impossible”, the elites have a free hand to victimize the population further. As long as academic idiots misinterpret Occam's Razor and insist that the evidence of conspiracy does not matter because it does not fit with their narrow notion of “the simplest explanation”, they prop up the banking cartel and allow it to thrive.
When it's all over, they want people dazed and shell-shocked, wondering how it happened and searching for anyone to point a finger at. The narrative will be that “it was a perfect storm of coincidences”, that it was “the evil of the political left”, or the “evil of the political right”.
They want to turn public confusion into civil war, all while they sit back and enjoy the chaos from a comfortable beach chair and wait for the moment they can swoop in and act like saviors seeking to “end the madness”.
This process is happening today, and only the most blind have problems seeing that the world has gone over the edge of an ugly precipice.
Disinformation agents call it “doom and gloom”, because that is supposed to dissuade you from taking it seriously. But the facts are the facts. This is why I focus so much of my time on economics – While numbers and stats can be rigged, the effects of a financial crash cannot be hidden. It is undeniable, and all the critics of this information can do is try to trick people into not looking at it.
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