“International corporate control over every essential aspect of our lives, from food and water to fuel and clothing, has placed our most basic security in the hands of strangers who put their own interests first.”(1) Vincent McCaffrey
Assuming that you're not a professor of economics or a hedge fund manager ( I am neither, as will become readily apparent if you choose to read on), the finer points of stock market machinations or the interpretation of economic data are closed books. However, it seems that if your fervent desire is to blow up an economy, there is at least one viable methodology that might be employed and it's possible to understand the play-book even if you (or I) are a financial pygmy. It goes like this.
First, hugely inflate the available money supply, thus ensuring that more dollars (pounds, yen etc) are chasing a quantity of goods and services that hasn't been artificially expanded; if possible, do this towards the end of a period when the means of production have either been temporarily halted or, at the very least, severely compromised – perhaps after a prolonged lock-down, for instance. This will greatly enhance the inflationary effect that is always present when the money supply is swiftly and massively expanded. Generally, asset prices rise first, followed by goods and services.
Once the inflationary conflagration is well established (having done nothing to ameliorate its effects, obvious though they were to all and sundry), announce an intention to take money out of the economy. Don't just end the supply of fake money (Quantitative Easing) and take a neutral stance. Actively reverse course instead by switching to a practice known as Quantitative Tightening (QT), citing some half baked intention to eventually balance the books. If feasible – and anything is feasible if you're a central bank – raise interest rates at around this time, making a single whammy into a double. Be careful not to raise them far enough that they actually have any real effect on inflation.
“To fight inflation, interest rates need to exceed the inflation rate. That means a dollar saved loses purchasing power unless savings interest rates climb from less than 1 percent to something over current inflation (now around 8%). One rule of thumb provides that savings interest rates should reach 150 percent of inflation in order to reverse the trend. The theory holds that high interest rates encourage saving cash thus slowing down the speed at which money chases assets. If interest rates are less than inflation, it makes holding cash a losing proposition.”(2)
Of course, inflation is running much higher than 8%, because the fanciful 'basket of goods' that is relied upon in the calculation includes such fripperies as clothing and recreation, which are less of a factor when people are having to queue up at food banks because their entire pay-check is going on the absolute basic necessities of life. But, no matter. An increase in the interest rate to 12% would instantly crash the economy, but might also act as a corrective and finally get inflation under control. That doesn't form part of the plan. Under this ineffectual, too-little-too-late guise the idea is to prolong the pain. Asset prices should start falling at the point at which goods and services become more expensive.
Next, engineer a massive crash in crypto currencies. Once more, wait until there is maximum pain and then regulate them. Enough people will buy into the idea that crypto needs regulating (despite the fact that the whole appeal of them lies in the fact that they are decentralized and free of regulation). More to the point, any financial instrument that cannot be centrally controlled needs to be tamed or destroyed. Hopefully, at some point in this arc of a story, there will be some spontaneous and severe civil unrest – rioting and looting will do the trick. If the populace cannot be roused to wanton violence, enlist the assistance of BLM and Antifa, that they may reprise their 'mostly peaceful' protests of 2020.
By now, inflation will be biting hard. If the pain can be maximized by the judicious deployment of 'vital' policies or by engagement in a proxy war, all the better. You don't have a high regard for public perspicacity, after all. Again, wait for the moment of peak pain before stepping in and offering (inflicting) solutions to the crisis of your own making. Make the case – relentlessly via the cheerleaders in the press) that it wasn't government overreach and malfeasance that caused problems; no, by contrast it was the lack of central control that is the true cause of the debacle.
People hoarded, people spent money on whatever they wanted to. This reckless (and selfish) behavior caused asset bubbles and terrible inequities – of outcome, not opportunity. The only way to prevent this happening again is to give the Feds the proper tools. They need precision instruments, not the unsubtle, untargeted ones they have now. Presently, they can only fiddle with interest rates and money supply – essentially, two sides of the same coin. What they should be able to do instead is control the flow of resources and the best way to do that would be through a Central Bank Digital Currency (CBDC). It would need to be programmable, of course. And there'd have to be some limitations; people wouldn't be allowed to purchase stocks, for instance. Too risky, not tightly controlled and it might destabilize markets and we wouldn't want that again, would we? One more thing. To ensure that everyone gets what you think they need, there will need to be some sort of guaranteed income (Universal Basic Income).
There's a reason that at least some of this sounds vaguely familiar – we are partway through a process that, so far, looks remarkably similar. Before I delve a little deeper into the many and varied ways that our financial health is being degraded, it's worth examining why our elites would be doing such a thing in the first place. In service of that end, it's incumbent upon us to take note of what they are telling us. A Great Reset – that crazy conspiracy theory of a year ago – wherein we Build Back Better, is explicitly concerned with changes to the status quo. It's intended to be a control-alt-delete for the entire globe. This new and improved omelette will require many broken eggs and cannot be prepared by those who are sans recipe; the elites must be the cooks.
Independent minded folk, given their unfortunate habit of deciding matters for themselves wherever possible, need to be brought to heel. This is best achieved via control of all the resources necessary for survival in the modern world. In its most basic form, this would be energy, food and money. Anybody who wishes to hold populations in thrall will need to exercise control over all three, but in a very specific way. Instead of the traditional method of corralling all the food and energy (for instance) and denying the masses access to these resources, the modern method will rely on making them scarce and unobtainable instead.
Every crisis, of whatever stripe, inevitably leads to more debt creation. This debt is financed by taxpayers, albeit the people who eventually pay it off may not yet be old enough to vote – future generations have been footing the bill for the deficit spending of today for some time. There is also a more immediate wealth transfer. Last time around (in 2008), as well as hoovering up trillions of dollars from the lenders of last resort – us, in reality, not the central banks – the financial elites also inherited vast tranches of residential property from owners who never should have obtained a mortgage in the first place and who defaulted as soon as interest rates rose.
That same dynamic will be in play this go-around as well, and in the same sector – housing – so the temptation for the elites to line their own pockets is ever present. However, this time there is an alleged ideological motivation taking centre stage. It's indicative of just how far we have diverged from any semblance of control over own own fates that the globalists can talk openly about their agenda, celebrating the move away from fossil fuels and meat and can while simultaneously blaming Putin for shortages of food and energy. The twisted logic doesn't appear to have occurred to most people – how can the elites blame Putin (notwithstanding the fact that it is their own prior policies and sanctions that they have willingly imposed that have led us to this place, not the Russians) whilst celebrating the 'transition'? Shouldn't they be thanking him instead?
Inflation is a time honored weapon:
“Inflation closes the gap between money earned and money spent. Since the financial crisis of 2008, the Federal Reserve expanded M2 money supply from just under $8 trillion to around $22 trillion today. During that time GDP has increased from around $14.6 trillion to around $24.5 trillion today. We’ve gone from a ratio of one dollar chasing $2.20 in goods in services to an almost 1 to 1 ratio today. Inflation during the same period, according to the government, has eroded the dollar by a mere 33 percent.”(3)
If the inflation can be targeted at the expenses that make up a disproportionate share of the working and middle class while leaving the chosen ones largely unaffected, even better. So energy, food and housing (both rental and mortgage financed) all take a massive hit, while the nice-to-haves maintain price stability, or relative deflation – due to the sudden lack of demand.
So far, so good. The plebs will find themselves increasingly swamped by rising costs and static wages, paying for basic necessities on credit cards which are now more expensive due to rising interest rates. These interest rate rises will further impoverish the right segment of the population. Those paying floating rate mortgages will be in dire straits as even a modest rise in interest rates could double mortgage payments. Equally, those looking to buy will find their purchasing power decimated. The winners in this market will be the landlords – increasingly, investment funds – who will find themselves in demand and who will price their properties accordingly.
It's not as if the plan isn't coming together. But the brains trust at the WEF and the UN seem to have decided that the final destination needs to be arrived at rather sooner than originally envisaged. Agenda 21/30 was to be completed by 2030, but it's difficult to see the takeover taking that long judging by its current breakneck speed. Digital currencies are said to be on the menu for 2025. It seems likely that the globalists feel as if too long a lead time will allow some of the rubes enough time to re-engage their critical faculties and there are only so many pandemics that can be propagated before most people become a little jaded with the whole thing. The pot needs to be kept simmering, not boiling. The aim is constant debilitating fear and stress, not a psychological breakdown or the adoption of a fatalistic 'whatever' state of mind.
And so, matters need to get incrementally worse, fairly quickly. Fortunately, for the globalists, manufactured crisis follows manufactured crisis and the ability to examine each one in depth is compromised; there's no time before the next one rolls around. This makes it easy to get away with patently false explanations (e.g. the aforementioned Putin's price hike) and makes it difficult for people for people to take stock and recognize patterns. This is the situation in which we find ourselves at present.
The final objective, at its most macro level, is control over pretty much every aspect of our lives. This necessarily entails destroying anything that allows people to exercise independence from the state. Therefore, some members of society – not part of the self selecting elites – naturally pose a greater threat than others; hence, the current attack on farmers. Plus, nobody is going to eat carcinogenic fake meats unless they absolutely have to. The elites plan to make that scenario come to life. They don't want us healthy and capable of resistance. I'm pretty sure they won't want us growing our own food either, so I would expect an avalanche of red tape specifically designed to prevent self-sufficiency.
They also want us short of fuel and energy. The US, in addition to banning new drilling leases, closing pipelines and discouraging the construction of any new refineries (no major refinery has been built in the US since the 1970s)(4), now has huge problems with the internal supply of gasoline. By April of 2021, there was already a 50,000 shortfall of tanker drivers.(5) Railroad congestion in the US is another slow moving catastrophe in the making.(6) While gasoline prices have risen by around 50% in most European countries, America has seen increases of 100% plus. Regime interference in the refining and distribution system may be responsible for that.
The other basic need is for money. Without money independently earned, we would be obliged to rely on government, which is exactly how they like it. There are a variety of risk factors that impact our financial viability. All of them are under attack.
It's the economy, stupid
The one to watch most closely is the US economy. It's true that the UK economy is contracting swiftly – allegedly there was still GDP growth in the first quarter of 2022, albeit a measly 0.8% - and the Bank of England reckons that there'll be a recession next year. Others think that optimistic (an occupational hazard for central bankers, it seems) and believe it'll come in the second half of this year.(7) This is in no way surprising; average household energy bills will go from £1,278 to £2,599 between March and October.(8) There will be nothing left over for the goods and services that may even have been deemed essential in better times.
The problem with conventional financial forecasting is that it doesn't take account of motivation. When looking at what the Federal Reserve or the Bank of England might do, commentators assume that, whatever course of action is pursued will be pursued in good faith. It might turn out to be misguided perhaps, but not malicious. This is fundamentally incorrect:
“First and foremost, no, the Fed is not motivated by profits, at least not primarily. The Fed is able to print wealth at will, they don’t care about profits – they care about power and centralization. Would they sacrifice “the golden goose” of US markets in order to gain more power and full bore globalism? Absolutely. Would central bankers sacrifice the dollar and blow up the Fed as an institution in order to force a global currency system on the masses? There is no doubt; they’ve put the US economy at risk in the past in order to get more centralization.”(9)
The Fed have done nothing about inflation. They began by calling it 'transitory' eleven months ago, even though they must have known that it wasn't. They deliberately exacerbated it by continuing to pump money into the system – by mid April, the Fed balance sheet was still expanding with more than $11 trillion dollars of assets, all of which have been paid for by issuing new currency. Now, of course, they are raising interest rates in an apparent attempt to curb inflation, knowing that all it will do is make matters worse; they can't raise them enough to make a difference and the inflationary pressure is asymmetrical, impacting basic needs far more than comparative luxuries.
It's not just the Fed. In fact, the Federal Reserve is not the most important financial deity; the Bank for International Settlements is. This is the central banker's central bank. All other central banks take their orders from Basel. They don't serve their own country's best interests – they serve the globalists' interests and they want a global currency.(10) They blame capitalism for creating inequality (once again, of outcome not opportunity), when the reality is that free market capitalism hasn't existed for decades.(11) Rigged markets, monopolies and central bank meddling are the antithesis of capitalism. These are socialist ideas, but the growing divide between the super rich and the rest of us is more easily blamed on greedy capitalists, instead.
How else can we explain the dreadful outcomes of the economic policies that central banks have followed? 80% of all dollar bills have been magicked into existence since 2020.(12) Huge numbers of Americans are maxing out their credit cards.
Figure 1
Wage growth (year on year) is in free-fall, having declined by 4% - which is worse than during the Global Financial Crisis of 2008-10 - and savings are taking a hammering. Mortgage payments are up 56% year on year.(13) Additionally, America has seen two consecutive quarters of negative GDP growth; she is now officially in a recession. Not that the administration will admit it. We are instead treated to the usual Leftist nonsense, whereby the definition must be changed so that it aligns with the facts. In the same way as there isn't a crisis at the southern border (despite upwards of 3 million illegal immigrants in the past year) and the Covid inoculations are 'vaccines' even though they don't prevent infection or transmission, six months of negative growth no longer constitutes a recession.(14)
“This is not an economy that’s in recession. We’re in a period of transition in which growth is slowing, and that’s necessary and appropriate."(15)
That's the US Treasury Secretary's take on matters and it is tempting to believe that she actually believes what she is saying. There is no doubt that the political elites are transitioning us; that's a necessarily part of the Reset. She just doesn't want to acknowledge the unpopular reality that everyone (except those elites) will be worse off as a result of it.
Figure 2
The debt bubble – both personal and national – is a massive crisis that is being ignored, presumably on the basis that the government can continue to print money ad infinitum because the dollar is the world's reserve currency and nothing can possibly go wrong. More on the dollar's status shortly. However, matters can certainly get out of control, whether the dollar maintains its hegemony or not:
“Imagine, for instance, a fiscal environment in the 2020s in which interest rates rise to 10 percent—a not entirely absurd hypothetical, given that current inflation levels in the United States are touching double figures. In that case, for the U.S. federal government to service our national debt (which approaches $30 trillion), it would have to commit $3 trillion per year just to making interest payments.
To put this in context, the entire annual budget of the federal government for 2023 is expected to amount to $5.7 trillion. In other words, it is conceivable, if not yet likely, that the U.S. government, and other Western governments, could soon be called upon to spend most of their public funds servicing their considerable debts.”(16)
US consumer debt is approaching $16 trillion. The average price of new car was $35,6000 in 2019; it's now $47,000. Used cars have become even more desirable; average prices have risen to $28,000, up $9,200 from three years ago.(17)
Figure 4
It isn't just the US – elites around the world have been ramping up national debt to unsustainable levels.
Figure 5
The huge problems facing Western nations are not the result of failures of policy. They are the product of successful policies. They did not 'fail to spot' inflation. They did not screw up. The inflation that they have created due to an orgy of money printing can hardly be said to be a mistake; it's economics 101. Neither can lowering energy production, limiting energy development and new production and effectively disqualifying funding for fossil fuel producers result in anything other than yet more inflationary pressure. None of this is rocket science.
Climate Change BS
I realize that citing the bullshit that passes for evidence in support of the concept of man-made climate change causing runaway global warming is hardly original, even if 97% of the world's scientists (hardly any of whom work in the climate field) allegedly believe this to be the case. The broad strategies that have been adopted in the Paris Climate Accords and Agenda 21/30 are the framework upon which the rest of the scam is hung. There are two current tactics that are making life very much more difficult that it has to be; our old friend ESG and the specific obsession with nitrogen emissions. These twin abominations are currently top of the climate activists' hit parade.
In particular, ESG is being used as carrot and stick, forcing conglomerates to do the bidding of the select few. In essence, the banks, venture capitalists and investment funds won't lend to a corporation unless they can demonstrate that they are playing ball. The three prongs of ESG, which are seen as factors that count towards an overall score, are as follows:
E = Environmental scoring factors
Climate Change
Soil and water contamination
Renewable Energy
Environmental policy
S = Social scoring factors
Are workers treated ethically?
Do they earn a living wage?
Are facilities regularly inspected and shown to be fit to work in? Can employees take leave when they are sick and indisposed?
G = Governance scoring factors
Does the company abide by local, state and federal law?
Does the board represent diverse backgrounds and perspectives?
How does executive and non executive pay compare to peer companies?(18)
As is often the case, not all of the scoring factors are a bad idea. It would be nice to know that companies obeyed the law and paid workers a living wage before a fund invested. But, as is equally frequently so, the subjectivity and waftiness of most of the scoring factors are ripe for coercion and abuse. Who decides what is ethical or not? Why does a board have to have a diverse background? ESG is a way to impose many elements of the Green New Deal without the need for legislation. These funds are not good performers. Indeed, they lag the market considerably. But that's missing the point. By forcing businesses into behaviors that the financiers favor, such as a lower carbon footprint, they contribute to the slowing of economies and the shortage of goods and services.
Figure 6
And it's not just companies that are blessed with trial by ESG scores; countries are also. In fact, there are a couple of charts that measure the obedience of nations. The National ESG chart's upper reaches are peopled exclusively by the developed world; of the top 20, 18 are in Europe and they are joined by Australia and New Zealand.(19) But emissions are measured separately and here the top countries are from the developing nations.(20) This is logical as, up until now, the Europeans have talked a good game, but have spent most of their time convincing others to bite the bullet, rather than suffering themselves. Two countries serve as an example of the way in which ESG (and the drive to lower emissions) is wrecking economies and inflicting unnecessary hardship; Sri Lanka and Ghana. Both have outstanding scores on the Emissions Index – 98.1% and 97.7% respectively (100% would represent perfection) – and both are fubar.
Sri Lanka was still doing fine economically prior to 2020, with GDP growth of between 3% and 4%. However, in April 2021 the country's rulers instituted a chemical fertilizer ban on the advice of Western elites. There was no plan B, no gradual transition. The effects were apparent in short order. One third of the country's farm lands were dormant in 2021 – within six months rice production had contracted by 20% and prices had risen by 50%. The family farms in the most fertile areas reported a 50-60% shortfall in crop yield. As a result, the country was obliged to spend $450 million importing rice, having previously been self sufficient.
Yet even a disaster such as this wasn't the most impactful incidence. The biggest problem, in terms of the viability of Sri Lanka as a nation, came in tea production. The country exported $1.3 billion annually and this money paid for 71% of the food that Sri Lanka imported. But the fertilizer ban caused further shortfalls in tea production, which fell 18% between November 2021 and February this year. The knock on effect of that was to destroy the country's ability to pay for food and fuel and to service its debt.(21) The Sri Lankan government reversed the fertilizer ban in November 2021, but it was already too late.(22)
In May, it reneged on a foreign debt repayment and the sorry sequence of events that follows such a default played out in typical fashion – the government couldn't borrow money, it therefore devalued its currency, inflation rose 30% and the government ran out of cash anyway. So, in attempting to obtain the highest possible ESG emissions score – in order to attract investment, presumably – the government had, in fact, ensured that it was now unable to borrow any money at all.
Ghana isn't having much luck either. Until 2014, it was one of the world's fastest growing economies – a net exporter of energy. Then the government made the decision to accept a loan from the World Bank and things went rapidly downhill.(23) The country joined the Paris Climate Accords, a sure-fire indicator that woke environmental policy was about to become entrenched. Ghana began an 'energy transformation' towards renewables but, as with Sri Lanka, ideology trumped practicalities. Fertilizer supplies are now scanty, due in large part to the government's refusal to pay its debts to the suppliers.(24) The result is the slow moving, looming disaster that threatens many nations – upcoming food shortages that will become obvious by the autumn. This is on top of the energy grid shutdowns that are another inevitable result of chasing an ESG score.
So, in assessing the damage, are we to once again attempt to let the Western elites off the hook? Shall we entertain the possibility that the utter shambles that is Sri Lanka and Ghana is yet one more example of their epic incompetence, their ideological fervor? I think they'd like us to think that, but it wouldn't be true. Green policies are the holy texts for the true believers, but you won't find too many of them in government or Big Business. What you'll find instead is cynical autocrats willing to use the gullible extremists to suborn the rest of us.
The waning petrodollar
Firstly, a conundrum. If, as previously observed, the globalists want a global currency (and they do, as the ECB and the WEF have made clear)(25)(26), they are going to have to do something about the de facto reserve currency first – the US dollar. There will need to be a Reset, which is a somewhat anodyne way of describing the processes that would be required. The Reset and its first cousin, the Build Back Better agenda are supposed to bring order, but first there must be chaos. But the dollar isn't going to collapse on its own - it will need to be actively taken down.
The dollar's reserve status rests upon two main tenets; confidence in the US economy and America's status as a global superpower. It's this historic status that has allowed the US to dictate terms around the world and, most importantly, to Saudi Arabia. The agreement with the Saudis is predicated on mutual self interest. America's part of the deal involves defending Saudi Arabia from its enemies and providing military materiel. The gulf states, in return, gave an undertaking that they would trade their oil in dollars and reinvest that money in dollar denominated assets, thus propping up the currency and allowing the American's to retain their status as the world's financial superpower.
This system has worked for nearly fifty years, but probably won't for much longer. One might think, as was certainly the case with past presidents, that Biden and co would be anxious to retain the dollar's pre-eminence. But if the WEF and the IMF feel confident enough to openly advocate for a replacement and receive zero pushback, then perhaps not. And when the US cools on the Saudis and invokes sanctions against Russia that penalize the West and drive their enemies into the same camp, one might be forgiven for thinking that these actions are yet more intended consequences, not foreign policy gaffes.
The Saudis are not happy with America. They resent the US's lack of support for their ongoing war in Yemen, they are furious with Biden's attempt at a nuclear deal with Iran and they are concerned that the Afghanistan withdrawal debacle showcases their ally's military incompetence. Additionally, the economic relationship with the US has changed character. In the 1980s, the Americans imported two million barrels of Saudi crude oil a day. Now it's only half a million. Consequently, the Saudi relationship with China and Russia is much closer. China imports oil from both of them, to the tune of 1.76 billion barrels and 1.6 million barrels respectively.(27)
The Russians have successfully coerced a number of European nations to pay for their energy in rubles – how many nations is unknown – thus further weakening the petrodollar. And the stars are aligning in other ways, too. The Russian company Gazprom has just signed a deal with the Iranians, which might be worth as much as $40 billion.(28) They are investing in Iran's oil and gas fields; this at the same time as they are cutting supplies to the EU.(29) Additionally, the Russians and the Saudis have signed an agreement to develop joint military co-operation,(30) which cannot be anything other than a slap in the face for the Americans – if, of course, Biden had his country's best interests at heart, rather than those of the globalists. The princes of Arabia are further signalling their displeasure by publicly musing that they may accept Chinese payment for oil in yuan.(31) None of these machinations have excited any comment from the Biden White House, which would be inexplicable if the preservation of the dollar was a priority. Less so if it isn't.
The myth that a major currency cannot fail is as important to the financial system as that other canard, namely that there are some banks that are too big to fail. Both rest on the assumption that, no matter how bad things get, there is always a solution which is backstopped by the myth. Confidence is key; if the currency myth starts fraying around the edges, investors would dump currencies en masse and rush into tangible assets instead, thus causing yet another inflationary surge.(32)
Fiat currency systems only exist due to an exercise of faith – there is no asset backing them. The European Central Bank (ECB), the Fed and the Bank of Japan have simply been throwing good money after bad. They have been buying up government bonds that will likely not be paid (especially in the case of Italy), accepting bad debt onto the balance sheet rather than deal with the inevitable defaults in the here and now. They are merely delaying the inevitable by allowing the size of the problem to grow ever larger and refusing to deal with the fundamentals. Italy and Japan have been on life support for years – any weakness in the euro or the yen will lead to a stronger dollar in the short term (as we are seeing now), because there is nowhere else to go, but won't impact the long term trend in dollar weakness.
“To keep the illusion of a viable economy alive central banks must continue expanding credit and debt so the wheels do not come off the economy. It is hard to create the illusion all is well if unemployment soars and defaults skyrocket. It is easy to see how central bank policy, right or wrong, falsely accomplishes two things, it bolsters and supports current holdings while reinforcing the image markets are climbing higher because our economic future is getting brighter.”(33)
Putin and the Chinese seem intent on speeding the dollar's demise. They have just announced a new 'global reserve currency', which will be implemented among the BRICS countries (Brazil, Russia, India, China and South Africa) at the very least. This development has come about in the aftermath of the decision to cast Russia out of the SWIFT international settlements system, thus forcing Putin to come up with an alternative;(34) yet another own goal by the West, if we are to believe their motivations are kosher. Not so if we can read the runes.
What we can be sure of is that there is a ticking time bomb that will likely destroy the dollar if faith in the currency is compromised. As a direct result of American governmental indiscipline – due to the constant temptation to print money and expand federal influence – there are $18 trillion dollars overseas. If that money were to be repatriated, because investors didn't want to hold dollars any more, hyperinflation would be a serious possibility and, were that to occur, it would necessarily result in the collapse of the dollar as global reserve currency. None of which bothers the administration one jot. They are consumed with the task of fast-tracking despotism, instead.
Price Controls
One more constituent part of the Leftist mantra is price controls. Expect to see them imposed somewhere near you relatively soon. It's part of the doom loop that must play out if economic catastrophe is to be accomplished and, indeed, price controls are already gaining a foothold in the US – the Build Back Better bill, while mired in the Senate at present, provides that government pricing of prescription drugs will soon be a fact of life.(35) This may seem superficially appealing – nobody appreciates the widespread price gouging practiced by Big Pharma. But, as is often the case, be careful what you wish for. Biden's rhetoric about gas companies and their profiteering is a smokescreen, designed to obscure the role of his administration's policies. There are some fundamental problems with price controls, all of which provide an incentive for regimes to mandate them if they are bent on ruining their own economies.
They result in a shortage of the goods (or service) that has a price ceiling. Because of the artificially low price, there are more buyers. However, sellers are less inclined to sell. Ergo, more buyers than sellers.
They make rationing necessary, there now being not enough of the goods (or service) to satisfy demand.
The price ceiling affects the amount of the goods that even the buyer can acquire.
These processes inevitably increases the cost of the goods – not in money terms, but in terms of the effort required from a consumer who wishes to acquire the goods.
The quality of the goods (or service) is also affected – it no longer has to be high quality when demand outstrips supply. Not only that, but producers have to downgrade quality in order to continue making a profit.
We have a modern day example of how this works. Sri Lanka has just introduced a National Fuel Pass (inevitably, it's a QR code) which allows for a weekly fuel ration. Naturally, no digital ID, no fuel pass. And, in an echo of point 4 above, it is necessary to queue all night and all day just to fill up a tank.(36)
“No government intervention into a market economy is as certain to do damage as price controls. Market prices make possible the successful, productive coordination of the efforts of countless specialized workers and firms spread around the world. Market prices also coordinate the resulting massive flows of economic outputs with the demands of consumers. Every government-imposed control on prices reduces the effectiveness of this coordination.”(37)
Nonetheless, the softening up of the people has already begun. Oil companies, meat processors and any other company that catches the wokeist's eye are already being demonized.(38) Because they will make matters worse – how could farmers possibly survive if they are squeezed with much higher production costs (due to our self inflicted energy crisis) and then denied the right to set prices in order to make a profit? - and because they go hand in hand with rationing, I expect them to start making an appearance before the year is out.
Labour Market
The much maligned Millennials are copping yet more flak for their allegedly snowflake attitude to life (I wonder which generation was responsible for inculcating that?), which is, of late, manifesting itself in their habit of resigning from jobs in droves. Apparently, they don't feel heard or respected.
Figure 7
The effect is to drive up wages pretty much across the board. Wall Street interns (not the most popular group of people in the country) are earning 37.2% more than they were a year ago. Their companions in infamy, juniors bankers, are benefiting from bonuses double the size of last year's.(39) However, the biggest news is the huge disconnect between the number of jobs that are allegedly unfilled and the number of unemployed that are sitting at home.
Pre Covid employment was high – wages were also high, in relative terms. Now, however, Americans are being paid to stay at home. In yet another stealthy policy change, the Biden administration has removed work requirements from Federal assistance plans (such as the stipulation that work much be sought after, plus a removal of the time limit for assistance). This changes the labor landscape, somewhat.(40) In the US, the ratio of job openings to unemployed workers is almost two to one, much higher than previously seen. I imagine that 'vaccine' mandates, 'vaccine' injuries and the ongoing mismatch between job applicants and skills required all play a part, too. But there is no doubt that the market has a different character, post lock-downs.
Demographic changes also play their part. Although older people are continuing to work rather than retiring (because they have to), the working population is rapidly ageing, but because they are supplementing a pension rather than seeking full time employment – for the most part – they can usually avoid what might be termed 'toxic' employment. Not so the younger generation. One can almost see why being paid to sit on the couch might be more appealing.
Figure 8
The upside is that, finally, those who are still in the labor market may well have reversed a multi decade elite robbery. The downside is that it's taken rampant inflation and an administration willing to pay people for doing nothing to accomplish it.
Figure 9
Governments are not extending welfare provision for the benefit of society at large. They haven't even publicized the change in policy; presumably, because they know it won't be well received. It is taxpayers' money that is funding the ne'er do wells, after all. The US regime is doing so because it stymies businesses, especially smaller ones, and increases dependence on the government, which is exactly what they want. It's even got a fancy new name.
Universal Basic Income
Technically, UBI refers to a sum of money (gifted by the state) that is sufficient to live on, paid to each citizen with no preconditions. If you believe that last part, I've got a bridge to sell you. It's not a pipe dream – well, it is in its present form, but not-so-tentative steps are being made to enshrine UBI in our societies. To begin with, vast sums of money were given away as Covid relief, at least some of which wasn't siphoned off by fraudsters:
“The stimulus checks were just a portion of $5 trillion in pandemic stimulus money. The New York Times estimated that individuals directly received $1.8 trillion, including stimulus checks and nearly $700 billion of increased or extended unemployment benefits. Businesses, states, localities, and health care providers received most of the balance.”(41)
In addition, there are over 20 trial schemes in the US, whereby random individuals are the unworthy recipients of free cash for no apparent reason. There are other trials ongoing in Canada (naturally), Brazil, Germany, Spain and nearly a dozen other nations. But these schemes are a pale shadow of what UBI would have to look like were it to fulfil the definition. The problem is an obvious and insurmountable one to anyone but an ideologue; it's simply not affordable. In the UK, it would cost £260 billion to pay each individual £5,000 a year. Bear in mind that £15,000 a year is the poverty line. Given that it would not be possible to sell the concept at anything less than an above poverty level, the cost would be at least £1 trillion a year. Even with an abundance of creative accounting, the state can still only provide a fraction of a living wage.(42)
In the US, just $1,000 a month would amount to a bill of $4 trillion, annually, which is roughly equal to all federal revenue in 2021. Again, unaffordable. Plus it would create an even bigger pool of people with nothing to do, with hardly enough money to do it. The inevitable consequence of such an outcome would be increased levels of criminality and a slothfulness that would swiftly undermine creativity and initiative – which must be the point.
All of which would tend to mitigate against the idea. In fact, a quick calculation on the back of a fag packet and a five minute meeting ought to have been enough to consign the plan to a grey, cylindrical, floor based, temporary storage facility. But, of course, it hasn't, which should tell us all we need to know. The idea will be pursued, but it will clearly only work at reduced rates. And it's flagrantly about control – if the regime gives you everything, it can also not give you anything. Anybody that thinks that UBI will be a universal, no strings attached proposition is living in la la land. Indeed, it's not even with us yet and the WEF are already floating caveats:
“Finally, good arguments can be made for having very selective conditions – for instance, some that relate to public goods, like vaccinating all children and ensuring they attend school.”(43)
Think social credit score, programmable digital currencies, 'vaccine' mandates. Add UBI and mix. That's where they are taking us.
Market blowout
And the traditional way to start the journey is the tried and tested stock market crash. This time around, the ever expanding money supply has financed an enormous, long term spree of stock-buybacks. In simple terms, companies have borrowed money – funds which have been created by central bankers out of thin air – and spent it in buying their own company's stock on the open market and paying dividends to shareholders, rather than investing in capital projects or infrastructure. Not only does this suggest short termism – they don't seem too bothered about how not investing in their companies will affect longer term performance – it lines the pockets of investors and executives and drives the market ever higher on weakening fundamentals. There is no possible way it will end well.
Stock markets are massively overvalued and must correct at some point. The market volatility that precedes a crash is already occurring and will only worsen. Any analyst who believes that inflation has peaked and that all in the garden will soon turn rosy is proceeding from the wrong basic assumptions. The Fed isn't trying to help – they are going to hinder, either by actively meddling by reducing the money supply (QT) and upping interest rates or by sitting on their hands again, like they did in the years prior to 2008. Not because they have to, but because they need an excuse for seizing the scalpel like financial tools that they covet. If they acted to avert the upcoming meltdown, they would lack the necessary justification.
The excess reserves that had been sitting with the Fed themselves have been hugely reduced in recent months, perhaps by as much as $2.4 trillion. The funds that are still available for loans to the markets are, therefore, much reduced.(44) While it's certainly possible that the Fed will lose its nerve at some point and resume money creation (QE), they may not. They aren't trying to save us, remember. The dollar needs to be trashed, the economy sautéed. The US stock market has dropped from a high of 36,799.65 to a touch over 30,000 in the course of seven months, but the combination of inflation, recession, a tightening money supply and increasing nervousness as to true value leaves it vulnerable to panic selling and a lack of buyers.(45)
In the short term, buyers will still be present, particularly as a temporary buyback blackout period ended a week ago.(46) Some $5.5 billion of daily buybacks have returned. This is the elites filling their pockets while they still can. The dollar will also ride high for a while. But it won't last. It just depends when the Fed (or some cipher acting on their behalf) decides to pull the plug, which will be when all the major players have divested themselves of as much zombie stocks as they can. And when it all goes bang, who's going to get hurt? The pension funds that invest in the likes of BlackRock and Vanguard, I suspect. Or, to put it another way, ordinary members of the public, as per usual. And this time, the feeling is that it won't matter how much the Fed prints – it won't be enough.
And finally
If we pretend, for the sake of argument, that central banks have, at some point in the past, tried to avert financial crises or, at the very least, been savvy enough to give that impression - but have nonetheless failed to do so - imagine what will happen when they openly hasten and deepen a crisis instead. In fact, we don't have to imagine. It's happening right now.
The poor will suffer first and most – there will be no respite, because that's the point. Look at the energy hikes in the UK and the almost total lack of reaction among the political class. The cost of living crisis has been actively engineered by regimes, by policies, sanctions, rules and regulations, in both the short and the long term. Lest we forget, the lock-downs (the final piece in the autocrat's jigsaw) were not inevitable – far from it. Covid didn't do anything to out economies; governments did.
There is a straight line between lock-downs and the food shortages that are about to become all too obvious. The sociopaths running the show, who insist that the WHO should be empowered to mandate lethal 'vaccines' – particularly to the Africans who missed out this go around – are also the people responsible for the imminent famines that are about to decimate the continent by virtue of their collective insistence on emissions reductions.
Hungry people are desperate people. If you're ahead of the curve and prepped, you will likely still only find salvation in a group. 'Hoarders' will be demonised and, unless you're prepared to guard what you have 24/7, you'll need to have others around you to deter. The law is already an ass; I can't see the authorities going out of their way to protect those who saw through the bullshit. The energy crisis is obeying long-standing rules; first, price inflation then shortages. The EU is already warning us that we must cut gas usage by 20% just to survive the winter.(47)
That's two out of three. People's ability to earn money independently and choose where to spend it is the final frontier for the authoritarians. They are already doing their damnedest to inflate away our spending power, but they won't be content with that alone. They'll want you to default on your mortgage and sacrifice your savings, as well. And to those that still don't believe that any of this is deliberate – take a moment to read this citation.(48)
This is the WEF telling us, loud and clear, that they want to reduce car ownership by 90% and 'transition' to eating insects and algae instead. Curiously enough, the current energy and food crises serve to further that agenda, even though it's apparently someone else's fault; Putin's, probably. If they get their way with UBI and CBDCs, we won't have much of a choice.
Citations
(1) https://amgreatness.com/2022/07/25/nixonian-yesterday-today-and-tomorrow/
(2) https://amgreatness.com/2022/05/23/the-economic-doom-loop-has-begun/
(3) Ditto
(7) https://www.zerohedge.com/markets/uk-recession-threat-soars-economy-contracts-march
(9) https://alt-market.us/the-feds-catch-22-taper-is-a-weapon-not-a-policy-error/
(10) https://www.weforum.org/agenda/2019/04/is-it-time-for-a-true-global-currency
(11) https://www.weforum.org/agenda/2020/07/great-reset-must-place-social-justice-centre/
(12) https://seekingalpha.com/article/4498214-inflation-is-just-beginning
(13) https://threadreaderapp.com/thread/1541892151109332998.html
(15)
(16) https://amgreatness.com/2022/05/25/are-we-in-for-a-bumpy-ride-in-the-2020s/
(17) https://www.zerohedge.com/economics/charted-us-consumer-debt-approaches-16-trillion
(18) https://www.diligent.com/insights/esg/esg-risk-scores/
(19) https://www.robeco.com/en/key-strengths/sustainable-investing/country-ranking/
(20) https://worldeconomics.com/ESG/Environment/Sri%20Lanka.aspx
(21)
(25) https://www.weforum.org/agenda/2019/04/is-it-time-for-a-true-global-currency
(26) https://www.weforum.org/agenda/2018/11/christine-lagarde-imf-digital-currency-central-banks
(27) https://www.zerohedge.com/energy/russia-says-some-buyers-agreed-rubles-gas-payments
(28) Ditto
(32) https://www.zerohedge.com/markets/which-major-currency-will-be-first-fall
(33) Ditto
(34)
(35) https://taxfoundation.org/biden-prescription-drug-pricing-legislation/
(36) https://www.zerohedge.com/economics/sri-lanka-introduces-fuel-rationing-qr-code
(37) https://www.aier.org/article/five-negative-consequences-of-price-ceilings/
(39) https://www.zerohedge.com/markets/wall-street-interns-are-making-16000-month
(41) https://americanmind.org/salvo/pour-money-on-it/
(43) https://www.weforum.org/agenda/2020/04/covid-19-universal-basic-income-social-inequality/
(45) Ditto
(47) https://news.antiwar.com/2022/07/21/iea-chief-says-europe-must-cut-gas-use-by-20-to-survive-winter/
Figure 2 https://threadreaderapp.com/thread/1541892151109332998.html
Figure 3 https://www.zerohedge.com/economics/charted-us-consumer-debt-approaches-16-trillion
Figure 5 https://www.zerohedge.com/markets/esg-underperformance-will-be-its-undoing
Figure 7 https://www.zerohedge.com/personal-finance/why-labor-shortage-isnt-going-away
Figure 8 Ditto