In case you thought anybody in Washington was driving this thing, they are not. It’s official: the Department of Treasury is now issuing debt at pandemic levels. It’s worth noting the pandemic record was double the previous record, which had stood for 231 years.
None of this is accidental. They want to destroy the old system so we beg them for a new system. They are intentionally blowing the whole thing up. The dollar and hence the USA. Expect hyperinflation, multiple deliberate "disasters" that necessitate the launch of digital currencies and troops on the streets to ensure compliance. Not long now. America has been in military ownership since they shot Kennedy in 1963. They are not even bothering to hide it anymore.
1. I think we are at war. Because of thermonuclear weapons it isn’t a mass industrial war like WW2 but it’s a war nonetheless. For deterrence sake there will be lots of defense spending but most of the conflict will be cyber, social and space. Pippa Malgren is doing the best work in this area.
2. The US Cold War model of freezing conflicts in Europe and Asia by demilitarizing Germany and Japan is not going to work this time. Too expensive. We have to choose one. I am leaning toward Asia but realize that German rearmament is terrifying. But this means that defense spending abroad is going to expand rapidly. Just look at European defense stocks. On a tear.
3. The neoliberal project post Cold War assumed that geopolitics was irrelevant. Thus the wisdom of putting the most sophisticated chip foundries within range of China’s short range missiles. Now as leaders realize their mistake they are building redundant capacity in safer places. Wise but much more expensive and less efficient.
4. All roads point to higher inflation.
5. The biggest investment question comes down to “who pays?” Raising taxes is hard. Neither political party is really keen on it. I expect lots of tweaking of the tax code. Already you are seeing tax “catches” in how Social Security benefits are taxed. Spending isn’t likely to stop. In WW2 we had yield curve control; I think we are seeing a soft version now. The Fed and Treasury are clearly uncomfortable with the 10-year above 5%; this is what triggered Powell’s December pivot. My current guess is that banks will be “encouraged” to buy the auctions and depositors will consistently receive negative real yields. Wealthy households will have tools to offset much of this. But the fact we are seeing the S&P, gold and bitcoin all rallying simultaneously suggests that the store of value function of money is being eroded.
According to The Great Taking, a collapse is coming and the public doesn't actually own our stocks anymore (we only have "security entitlements") so we will be wiped out and CBDCs will be ushered in, giving us an "allowance."
The worst part is not sure how much of this is accidental.
This insane inflation is the only way the central banking class could capture the purchasing power that was hiding inside savings accounts and underneath mattresses.
It's estimated there's 200 trillion of wealth that is moving at zero velocity.
In order to try to get that money to increase its velocity the global central banking cartel has been depressing interest rates and pumping cash to starve yield and instigate capital flows.
Really what's going on ultimately is that they are transferring the purchasing power from existing savings into inflation heat which drives up the cost to rent assets that the central banking class already own.
Inflation's not a bad deal when you are already on top.
But when you are the one paying rents for those assets, and you don't have passive income sufficient to offset your operating expenses... Inflation can kill you.
You’re correct in saying voters don’t think this is real, but the bill is going to come due and I believe it will be fairly soon. Magic Money theory is all fun & games until the illusion is exposed. Like laws of gravity, laws of economics cannot be defied, even if you may be able give the illusion that they can for a time. Just as inflation was inevitable after Biden poured gasoline on the fire with the American Rescue Plan that Lawrence Summers warned him would ignite inflation. Everyone just wants to kick the can down the road but that road is about to come to an abrupt end.
With every step on the ladder to new higher (debt) ground, the law of unintended consequences moves closer to becoming reality and rearing its head in ways not thought about. I wouldn't fail to consider that this is leading up to the financial system blowing up which ushers in CBDCs and the end of all freedom. It's a clown show run by clowns that couldn't care less about humanity.
I'm relatively sure that if Congress had to use their own money to fund the various programs and they were responsible for the outcome, the congressmen would be a bit more frugal when it came to spending their money.
Thank you for an interesting read. Yes, a reset is coming. The options are limited. I suspect crypto will get wiped out down the road by the powers that be (ones riding it high now), metals great to a point. Tangible assets other than selective com real estate still good. Good to be in US as BRICS and rest of world in worse position.
Yes, all by design in order for the elites to stave off deflation. Which I might add, they have been trying to do since the Industrial Revolution's productivity improvements.
However, I will chalk this elite scheming, puppet string pulling and grand planning, up to what I call the "Evil Genius Fallacy". That is their concept that somehow this time, it's going to be different.
'Different this time' in that when this all comes uncorked and mass confiscation of all collateral & capital occurs, 'they' will still be in charge and that all their flocks of sheep are just docile herbivores that do what they're told.
I think the reality is more likely to be those sheep that were docile, are dead already as they did what they were told and were injected with a gene toxin that is in fact resulting in increased mortality among this cohort of the demographic.
What will be left over in the coming years are a cohort of broke but very pissed off sheep that weren't really sheep after all, because they were the ones always grazing outside the elite's fences. Those are actually some rather irritable wolves that had been minding their own damn business for centuries as all this grand scheming was going on. At that point, I don't think any amount of cajoling by the elites will result in any of them being spared by said irritable wolves.
Just sayin'... haven't read anywhere in 7,000 years of recorded history where the "Evil Genius" thing worked indefinitely. But hey, maybe this time it is different and it's all going to work out just like they planned.
Hanlon's razor: "Never attribute to malice that which can be adequately explained by stupidity." MMT posits that government debt is just an accounting entry. Or as Paul Krugman dismissed it, "money we owe ourselves."
(I think this is total nonsense, as any rational person does.) BUT if I was in charge of an empire on the wane, it would be *mighty comforting* to pretend debt doesn't matter, and that I could just keep spending...
Sid Meier made this game back in the 90s called "Railroad Tycoon." I enjoyed playing it a lot -- you were an 1800s robber baron set on regional domination. Your company could issue stock and take on debt. But there was a strange bug... At a certain point, the massive amount of debt you accrued confused the software -- and the number magically inverted! Your $30 million in IOUs turned into a $30 million cash balance (and that was REAL money back in the middle of the 19th century).
I think that's what the federal government is hoping for. Some kind of deus ex machina accounting glitch that magically transmutes the largest debt in world history into wealth. It keeps not working, *yet*, so they keep trying harder...
None of this is accidental. They want to destroy the old system so we beg them for a new system. They are intentionally blowing the whole thing up. The dollar and hence the USA. Expect hyperinflation, multiple deliberate "disasters" that necessitate the launch of digital currencies and troops on the streets to ensure compliance. Not long now. America has been in military ownership since they shot Kennedy in 1963. They are not even bothering to hide it anymore.
Couple of thoughts…
1. I think we are at war. Because of thermonuclear weapons it isn’t a mass industrial war like WW2 but it’s a war nonetheless. For deterrence sake there will be lots of defense spending but most of the conflict will be cyber, social and space. Pippa Malgren is doing the best work in this area.
2. The US Cold War model of freezing conflicts in Europe and Asia by demilitarizing Germany and Japan is not going to work this time. Too expensive. We have to choose one. I am leaning toward Asia but realize that German rearmament is terrifying. But this means that defense spending abroad is going to expand rapidly. Just look at European defense stocks. On a tear.
3. The neoliberal project post Cold War assumed that geopolitics was irrelevant. Thus the wisdom of putting the most sophisticated chip foundries within range of China’s short range missiles. Now as leaders realize their mistake they are building redundant capacity in safer places. Wise but much more expensive and less efficient.
4. All roads point to higher inflation.
5. The biggest investment question comes down to “who pays?” Raising taxes is hard. Neither political party is really keen on it. I expect lots of tweaking of the tax code. Already you are seeing tax “catches” in how Social Security benefits are taxed. Spending isn’t likely to stop. In WW2 we had yield curve control; I think we are seeing a soft version now. The Fed and Treasury are clearly uncomfortable with the 10-year above 5%; this is what triggered Powell’s December pivot. My current guess is that banks will be “encouraged” to buy the auctions and depositors will consistently receive negative real yields. Wealthy households will have tools to offset much of this. But the fact we are seeing the S&P, gold and bitcoin all rallying simultaneously suggests that the store of value function of money is being eroded.
FWIW
According to The Great Taking, a collapse is coming and the public doesn't actually own our stocks anymore (we only have "security entitlements") so we will be wiped out and CBDCs will be ushered in, giving us an "allowance."
Another good article with sad 😢 implications.
The worst part is not sure how much of this is accidental.
This insane inflation is the only way the central banking class could capture the purchasing power that was hiding inside savings accounts and underneath mattresses.
It's estimated there's 200 trillion of wealth that is moving at zero velocity.
In order to try to get that money to increase its velocity the global central banking cartel has been depressing interest rates and pumping cash to starve yield and instigate capital flows.
Really what's going on ultimately is that they are transferring the purchasing power from existing savings into inflation heat which drives up the cost to rent assets that the central banking class already own.
Inflation's not a bad deal when you are already on top.
But when you are the one paying rents for those assets, and you don't have passive income sufficient to offset your operating expenses... Inflation can kill you.
That is what's happening right now.
You’re correct in saying voters don’t think this is real, but the bill is going to come due and I believe it will be fairly soon. Magic Money theory is all fun & games until the illusion is exposed. Like laws of gravity, laws of economics cannot be defied, even if you may be able give the illusion that they can for a time. Just as inflation was inevitable after Biden poured gasoline on the fire with the American Rescue Plan that Lawrence Summers warned him would ignite inflation. Everyone just wants to kick the can down the road but that road is about to come to an abrupt end.
With every step on the ladder to new higher (debt) ground, the law of unintended consequences moves closer to becoming reality and rearing its head in ways not thought about. I wouldn't fail to consider that this is leading up to the financial system blowing up which ushers in CBDCs and the end of all freedom. It's a clown show run by clowns that couldn't care less about humanity.
I'm relatively sure that if Congress had to use their own money to fund the various programs and they were responsible for the outcome, the congressmen would be a bit more frugal when it came to spending their money.
Pump me up. It’s fiat will just create more
Only real concern is hyperinflation so cannot afford bacon and eggs
lol
Thank you for an interesting read. Yes, a reset is coming. The options are limited. I suspect crypto will get wiped out down the road by the powers that be (ones riding it high now), metals great to a point. Tangible assets other than selective com real estate still good. Good to be in US as BRICS and rest of world in worse position.
Yes, all by design in order for the elites to stave off deflation. Which I might add, they have been trying to do since the Industrial Revolution's productivity improvements.
However, I will chalk this elite scheming, puppet string pulling and grand planning, up to what I call the "Evil Genius Fallacy". That is their concept that somehow this time, it's going to be different.
'Different this time' in that when this all comes uncorked and mass confiscation of all collateral & capital occurs, 'they' will still be in charge and that all their flocks of sheep are just docile herbivores that do what they're told.
I think the reality is more likely to be those sheep that were docile, are dead already as they did what they were told and were injected with a gene toxin that is in fact resulting in increased mortality among this cohort of the demographic.
What will be left over in the coming years are a cohort of broke but very pissed off sheep that weren't really sheep after all, because they were the ones always grazing outside the elite's fences. Those are actually some rather irritable wolves that had been minding their own damn business for centuries as all this grand scheming was going on. At that point, I don't think any amount of cajoling by the elites will result in any of them being spared by said irritable wolves.
Just sayin'... haven't read anywhere in 7,000 years of recorded history where the "Evil Genius" thing worked indefinitely. But hey, maybe this time it is different and it's all going to work out just like they planned.
Bitcoin !
IF we hit another crash???
Great article, Peter! We shared it on our site!
https://www.moneymetals.com/news/2024/03/29/fiscal-collapse-accelerates-003082
America has Already Collapsed: People Just Haven't Figured it Out Yet
https://open.substack.com/pub/blackboxpolitics/p/america-has-already-collapsed?r=99p96&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true
Hanlon's razor: "Never attribute to malice that which can be adequately explained by stupidity." MMT posits that government debt is just an accounting entry. Or as Paul Krugman dismissed it, "money we owe ourselves."
(I think this is total nonsense, as any rational person does.) BUT if I was in charge of an empire on the wane, it would be *mighty comforting* to pretend debt doesn't matter, and that I could just keep spending...
Sid Meier made this game back in the 90s called "Railroad Tycoon." I enjoyed playing it a lot -- you were an 1800s robber baron set on regional domination. Your company could issue stock and take on debt. But there was a strange bug... At a certain point, the massive amount of debt you accrued confused the software -- and the number magically inverted! Your $30 million in IOUs turned into a $30 million cash balance (and that was REAL money back in the middle of the 19th century).
I think that's what the federal government is hoping for. Some kind of deus ex machina accounting glitch that magically transmutes the largest debt in world history into wealth. It keeps not working, *yet*, so they keep trying harder...
Treasury Secretary Janet Yellen is a buffoon