A powder keg is a barrel of gunpowder. The powder keg was the primary method for storing and transporting large quantities of black powder until the 1870s and the adoption of the modern cased bullet. However, the barrels had to be handled with care, since a spark or other source of heat could cause the contents to deflagrate.
I cannot imagine a more perfect storm taking shape. Not of the meteorological variety. But one that’s been taking shape for many years, even decades, tearing apart the fabric of this nation. You know this. There is a very great divide. More than one.
Attempt to identify and label the sides of the divide. Good luck with that. You might say it’s about the Makers and the Takers (reference Carlson the other night). Or you might say the left and the right. The Dems and the Repubs. Blue and Red. Patriots / Socialists. Freedom vs tyranny. Globalism and one-world rule versus nationalism. The rich and middle-class/poor. Race. On and on… It’s all that and more.
So what’s different right now, 2020? Why a powder keg? I think you instinctively know. It feels like things/events/forces are ramping up to unavoidable confrontation. Not just one. But on many fronts.
Things are hitting us hard. And in life-altering ways. And it’s far from over.
The Wuhan Flu / Covid-19 and the repercussions that we’ve seen. The breathtaking swiftness at which rule-by-decree has been accepted in a land called the USA. Home of the brave, land of the free. The world’s power players and their plans to strip away remaining freedom and liberties under the fear and guise of what has been proven to be a initially massively overestimated disease.
Americans have been locked-down for months. People don’t like prison. Even if for some people it’s dangerous outside, people want out. We’re seeing some of the results of this pent up emotion. This is shaking the powder keg.
The lock-down may have helped flatten the curve. But it created other problems, bad decisions, other causation’s for death. Oh, and it destroyed the economy.
Record unemployment since the Great Depression. 40 million unemployed workers. So many businesses are gone. Bankrupt. There are a lot of former middle class who are no longer. They are unable to pay bills. There is a very large and increasingly desperate class.
Now the riots popping up all around the country. Blue cities burning. While the excuse of thuggery, pillaging, looting, rioting and burning is the Floyd murder (though horrible), it’s more than “racial injustice”. It is symptomatic of the bigger war that has been simmering among the people. It’s just one front. There are many.
“The threads of our civic life could start unraveling, because everybody’s living in a tinderbox,” quoted from an article this morning.
We are headed straight into economic Depression. A full societal meltdown. That’s how I see it.
People are getting very angry. Most have entirely lost faith in the political system, institutions, and government mismanagement.
We have an election in November.
Egon von Greyerz
As we kickoff trading in the month of June, and the world continues to move closer to the next crisis, today the man who has become legendary for his predictions on QE and historic moves in currencies and metals told King World News this is how we know the big collapse is still in front of us.
History repeats itself with staggering similarity. The Crises of the 3rd Century and today have much in common. All empires have the seeds of their own destruction within them. So if we look back almost 2000 years to the Roman Empire we will find exactly the same symptoms as today.
Deficits, debts, excessive military spending, debasement of currency, breakdown of trade, plague, revolts, wars and hyperinflation. This is exactly what happened in the Crisis of the 3rd century, and right now the world is facing the same disasters. When Marcus Aurelius’ son, Commodus, became Emperor in 180 AD, the silver content of the Denarius coin was almost 90%. But gradually costs were soaring and revenues declining and the empire was running out of real money — gold and silver. More and more money was required to bribe a disloyal army…
By 235 AD, the situation became serious as many Roman legions were defeated by the Germanic peoples. The Roman generals also fought each other for control of the Empire. Between 235 AD and 284 there were more than 50 emperors, most of them murdered or killed in battle. The finances of Rome declined rapidly and debts increased substantially. Taxes were continuously raised but there were fewer and fewer who were in a position to pay tax. Then, in 250 AD, there was a plague that killed major parts of the population.
By changing the names and years to today in the above paragraph, the situation is almost identical. From the creation of the Fed in 1913, the US and the dollar has gradually gone downhill but the acceleration phase started in 1971, when Nixon closed the gold window.
Again, the similarity with Rome is astonishing. The real decline started in 235 AD, when the Crisis of the 3rd century began. At that time the Denarius had 50% silver content, which over the next 50 years declined to 5%, a 90% fall. Emperor Gallenius presided over this final fall.
The situation today is even worse. In the 50 years between 1971 and today, the dollar has lost 98% of its real value, measured in gold. The fall is now accelerating as the graph below shows. The dollar has lost a staggering 83% in the last 20 years, since 2000.
What is absolutely extraordinary is that the symptoms of the 3rd century are identical today: Deficits, debts, excessive military spending, debasement of currency, breakdown of trade, plague, revolts, wars and hyperinflation.
Each one of the above circumstances is present today. We obviously have the debts, deficits, etc. We also have social unrest in many countries and right now rampant in the US. We also have the plague in the form of Coronavirus. So far there are no major wars, but sadly with the current geopolitical tensions, the risk is major.
We don’t have hyperinflation yet, which is typically defined as prices going up by 50% per month. But with the dollar having lost 98% over 50 years, and 83% since 2000, it only has 2% to go to ZERO. And with the massive money printing and credit expansion that is now taking place, I cannot understand how anyone believes we can avoid it today.
Human beings always think that it is different today just because we are here. But how can anyone think that we can solve a debt problem with more debt? And when we look back at history, currency collapses and hyperinflation are very frequent events. Just in the last 100 years, there have been over 60 hyperinflationary events in the world. And in the last 2000 years, the number could easily be over 1,000. What is totally different today is that the whole world is in a similar situation, and when hyperinflation starts, very few countries will be able to avoid it. A global hyperinflation will clearly be both spectacular and devastating. It is not a question of IF, only of WHEN.
Many are saying that we have no inflation today so how can we get hyperinflation. What few understand is that hyperinflation is a currency driven event. It arises as a result of the currency collapsing. And the currency collapses due to massive money printing, which we are at the beginning of now.
Hyperinflation happens very quickly, almost out of the blue. As the chart shows below. it can go exponential in a couple of years.
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