Global South

eCONomics Part V: IN THE YEAR 2024 IF MAN IS STILL ALIVE

.. enter the ‘Cuban’ missile crisis, only this time it’s on steroids

With thanks to our own Colin Maxwell of New Zealand.

Please see: Part 1 ; Part 2 ;  Part 3 ; Part 4

NB – AN EXPLANATION OF ACRONYMS/TERMS/ETC used in the article are listed at the end of this discussion piece.

1. Introduction

My sincere apologies for this delay in my sequel. I picked up a very nasty bug and at the same time experienced some major computer glitches.

In the mean time it is my grim conclusion that the Western world won’t escape this gigantic financial hole it has dug for itself without going through a major systemic financial meltdown. Only with a tragic event will the critical mass of society actually rise up to demand the massive reform that is required to have any hope of recovering functional and sustainable economies.

I see no political escape from of the U$ train wreck (described earlier in eCONomics Part I) because the various components of the uni-party have almost identical financial and foreign policies. None of the POTUS candidates even bother to address the financial situation, let alone offer up any remotely workable solutions.

So too, history is massively against any hope of a successful independent POTUS, and the fact that RFK Jr is going to take votes from both sides of the ‘aisle’ means that IF the election actually takes place, Trump will be almost certainly be the winner.

This is despite the fact that he is a proven compulsive liar who still brags about his godfather role in the development of the experimental mRNA killer toxins. He also showed his true colours when he backstabbed Assange – whose published revelations paved the way for Trump to beat the truely dreadful and dangerous Hillary Clinton in 2016. What a truly sad commentary when a truly inept braggart like this is the only option available that would avoid a second term by the appalling ‘Crash Test Dummy’.

However, as the old cliche states – “seven days is a long time in politics” – however seven months is practically an eternity – especially given the dire financial situation and the multiple global military flash points.

Also, how soon could the pitchforks and riots manifest in the streets, and subsequently give the Biden camp the excuse they crave to declare Martial Law, in doing so creating the perfect opportunity to further tighten the noose on society’s freedom, by implementing a retail CBDC and it’s associated social credit controls?

The other possible titles I considered were…

KEEP PRINTING OR CRASH – nope, it’s keep printing and crash anyway.

IMMINENT GOLD REVALUATION – a worthy title too, as arguably this is the most significant single factor in a perfect storm of events that will be the end of the reign of the Western hegemon.

2. A Collision Of No Less Than Twelve Events In A Perfect Storm

#1 The Ukraine debacle exposing how utterly demented the U$ and NATOstan are in their hegemonic lust for control of resources, perpetual war and general mayhem. The comprehensive loss of yet another war is bad enough, but their attempts to hide this loss and extend the blood bath, makes NATOstan’s actions even more reprehensible.

#2 The Palestinian debacle – and Israel and the U$’s desire to genocide their population. The U$ and Israel play good cop, bad cop, whilst they carry on deliberate and overt genocide. Both countries have effectively torched the tiny skerrick of diplomatic capital they had left.

Many Palestians are already at level 5 starvation and yet this is being used as a weapon – even using aerial food drops as bait with Israeli troops stationed nearby with machine guns to gun them down as they try to retrieve food for their starving families.

#3 The build up in the tensions in the South China Sea and Warshington’s brazen prediction of a full scale war.

#4 The general weaponisation of the dollar and Western based payment systems.

#5 The idiotic 16,000 sanctions wrought on Russia – a reminder to the entire planet that this strategy doesn’t work – it only succeeds in providing a huge extra helping of bad karma for the voracious Western Hegemon.

#6 An announcement of a revaluation of gold by BRICS+ is imminent – as soon as this happens the Western fiat currencies will begin to implode – this as a corollary, with a return to hard backed currencies, may well turn out to be the single most crippling factor of all.

#7 The stability of the BRICS+ multiple commodity trade-only instrument will be
extremely compelling – not only will it be hard backed by gold, more than likely silver, and a host of other commodities (perhaps, as many as 20), but the smoothing effects of this system will come into effect and give countries the confidence to use it.

#8 The cooperative nature of the member nation’s currencies will encourage their use and an increasing percentage of trade will be done using swaps and bartering of goods for goods.

#9 Gresham’s Law will kick in – countries/people will liquidate their weak money and hold as reserves money which is regarded as strong and stable. This is when the exponential ramp up in hurt for the West will begin.

#10 The fact that it is almost impossible to miss the fact that Uncle $laughter has deliberately set about trying to destroy Europe – this gradual realisation by Mainstreet Europe, as the reality finally bites in, will never be lived down. Kissinger’s prophetic words should ring in the ears of the entire RoW.

#11 The absolutely disgraceful treatment of LatAm and the explicit Monroe Doctrine of raping this entire continent – and no more shocking example of the last century of atrocities than the sellout of the immensely resource rich Argentina by the utterly feckless Milei to Western imperial plutocrats. Refer – General Richardson’s recent visit to Buenos Aires – I just hope that our friend Jorges is travelling OK amongst all of this madness.

#12 The highlighting of the centuries of the raping of the African Continent by Western Imperialism – the most recent and habitual protagonist being, you guessed it – Uncle $laughter.

3. Gold Stacking By The Global South

this constitutes the twilight of the fiat currency system

The World Bank reports that central banks bought 1037 tons of gold bullion in 2023, which is only slightly below the all time record set in 2022.

The astute entities, particularly in the ME and Asia are realising that keeping funds in U$ dollars is becoming too much of a liability.

Foreigners who own $14 trillion in stocks in the U$ and a further ~$8 triilion in treasuries are slowly waking up to the fact that they are not even the legal owners of this paper…. see eCONomics Part (I), section (iii) ‘The Great Taking’.

This stacking of bullion is enabled by the U$’s vain obsession of trying to protect the value of its currency. The Global South will continue to stack as the U$ facilitates the suppression of the real price with the COMEX.

It seems incredible, but the MSM has only just managed to figure out that the strength in gold is due to massive central bank buying. Apparently the casino house didn’t see these macro trends either – they were all to far too busy chart-painting and gambling to even look at the underlying fundamentals of why gold and silver were about to break out and head for the hills.

This subject was extensively covered in eCONomics Part (I) and so I won’t regurgitate it here.

Paraphrased from the one and only Alasdair Macleod…

“Money is the back stop of credit, which is why gold is so important. The dollar is not money, it is credit – it relies on the faith we have in the U$ Govt (oh dear!).

This is what is likely to come unstuck, as the entire colossal credit system begins to fall down around our ears.

Insurance has to be money in this event – not BitCoin, but gold. Silver has been demonetised, remaining very much an industrial metal controlled by industrial interests, particularly within China.

However, this control may well be slipping with the Indians buying so much silver, with deliveries on the COMEX this year over 1200 tons. As China loses control of the silver price its monetary characteristics will return.

When credit really does fall apart, people will go for anything tangible – obviously this does not include financial securities – in them there is no protection against inflation because they are in themselves credit which will get swept up in the collapse.”

4. Gold, Silver, or Bitcoin — which one(s) will Dah Fed concentrate on manipulating now?

Recently, the ‘cost to borrow’, meaning the cost to short sell GLD shares began to rise sharply from just under 40 BPS (0.4%) by almost 3x to a mind-numbing 1.06%.

Remember too that these borrowed shares ultimately have to be paid back as the price rises further the borrower is left in a ever deepening hole -who on earth would take this risk? – So who is the ‘who’ then? – it has to be dah Fed itself because no TBTF first tier bank compliance team would allow these huge high risk naked short bets to be made.

As the brilliant Andy Maguire recently stated – (paraphrased)…

“Why – because they are attempting to swamp the gold rally by adding borrowed supply in the hope that officials can repay these borrowed supply bets at a lower price. Yes we know that the Fed can print as much as they like, but this is all set to backfire spectacularly.

The Fed is the only remaining CB betting against a higher gold price and they are reduced to deploying the only tool in the tool box, which is using leveraged paper gold to try to chart paint the top of the rally.

Meanwhile, almost every other CB is swapping their excess dollars for physical gold and capitalising on being able to convert the COMEX synthetically driven supply prices into deliverable NSFR compliant bullion through the EFT mechanism. The Fed is now severely limited as to how many CTAs they can suck into puking up their long term bets to repay these GLD shares.”

The Fed is the only remaining global CB (dumb enough) to bet against a higher gold price and to use leveraged paper gold to continue to manipulate the price. Meanwhile any other CB, with half a brain, is swapping their excess dollars for physical gold.

Basically, available gold stocks have contracted ~50% in 4 years and many CTA positions are no longer rinse-able. The ringleaders now appear to be shifting their attention to injecting instability into Bitcoin, and phasing out gold and silver price fixing, as they become more and more badly burnt whilst the organic price discovery process advances.

Clearly, it is far more profitable to play around with cryptos than to have to eventually cough up gold bullion, which is ultimately NSFR compliant, and physically deliverable, leaving them in a deeper and deeper hole.

It is much easier just to print cash to bale themselves out, as their ability to print cash is virtually limitless – as opposed to eventually having to cough up physical gold that they don’t hold anyway.

5. Silver — massive extra demand for silver, notably in India and China.

We now witness an explosion in silver demand for use in the solar industry particularly in India, but it is strong in China too. India’s solar module production demand is likely to grow by ~60% by 2025.

This market requires thousands of extra tons, but the demand is also ramped up even further by the relatively higher price of gold – another perfect storm leading to unprecedented physical demand.

The extra thousands of tons of demand for silver will inevitably force the price much higher during 2024 – this cannot be contained by the bankster’s usual playbook of tricks.

Since the 1930s the gold to silver mining production ratio has stayed remarkably close to 8:1.

The Exeter Pyramid helps us to gain a perspective on how massively undervalued gold and silver bullion is relative to other financial assets and real estate.

When you look at the risk arrows which clearly indicate that there should be movement into gold and silver bullion, at the very least as an insurance hedge, it reveals just how huge the natural impending price discovery process could be.

Ownership of precious metals in the U$ are really only the equivalent of a pimple on an elephants arse – it represents the equivalent of a pitifull 0.5% of their assets.

As Andy Schectman points out – what happens when the population finally flicks up as to the extent of the great taking and if they advance their PM holdings to even a lowly 5%? – that alone would amount to a 10x increase in demand.

This is much like the COMEX debacle where the open interest is 1750% higher than the amount of bars held in their vaults. The dirty word is rehypothecation – meaning that most entities will have no access to physical gold, just as they won’t with silver.

The planned Moscow Metal Exchange could at any time set a relatively modest price for gold at $3000, and silver at say $50-$100. Just like that all of the Western markets could arbitrage straight to the East setting a real price – this would break the COMEX and the London Metal Exchange, and immediately break the dominance and the manipulation by the Western players.

6. Unsustainable Levels of Public Debt – the Destruction of the Middle Class

Daniel Lacalle wrote an excellent piece which was published on ZH April 9, 2024…

“When the fiscal position is unsustainable, the only way for the state to force the acceptance of its debt—newly created currency—is through coercion and repression.

A state’s debt is only an asset when the private sector values its solvency and uses it as a reserve. When the state imposes its insolvency on the economy, its bankruptcy manifests in the destruction of the purchasing power of the currency through inflation and the weakening of real wage purchasing capacity.

The state basically conducts a process of slow default on the economy through rising taxes and weakening the purchasing power of the currency, which leads to weaker growth and erosion of the middle class, the captive hostages of the currency issuer.

Of course, as the currency issuer, the state never acknowledges its imbalances and always blames inflation and weak growth on the private sector, exporters, other nations, and markets. Independent institutions must impose fiscal prudence to prevent a state from destroying the real economy. The state, through the monopoly of currency issuance and the imposition of law and regulation, will always pass on its imbalances to consumers and businesses, thinking it is for their own good.

The government deficit is not creating savings for the private economy. Savings in the real economy accept public debt as an asset when they perceive the currency issuer’s solvency to be reliable. When the government imposes it and disregards the functioning of the productive economy, positioning itself as the source of wealth, it undermines the very foundation it purports to protect: the standard of living for the average citizen.

Governments do not create reserves; their debt becomes a reserve only when the productive private sector economy within their political boundaries thrives and the public finances remain under control.

The state does show its insolvency, like any issuer, in the price of the I.O.U. it distributes, i.e., in the purchasing power of the currency. Public debt is artificial currency creation because the state does not create anything; it only administers the money it collects from the same productive private sector it is choking via taxes and inflation.

The United States debt started to become unsustainable when the Federal Reserve stopped defending the currency and paying attention to monetary aggregates to implement policies designed to disguise the rising cost of indebtedness from unbridled deficit spending.

Artificial currency creation is never neutral. It disproportionately benefits the first recipient of new currency, the government, and massively hurts the last recipients, real wages and deposit savings. It is a massive transfer of wealth from the productive economy and savers to the bureaucratic administration.

More units of public debt mean weaker productive growth, higher taxes, and more inflation in the future. All three are manifestations of a slow burn default.

So, if the state can impose its fiscal imbalances on us, how do we know if the debt it issues is unsustainable?
First, because of the units of GDP created, adding new units of public debt diminishes rapidly.
Second, the erosion of the currency’s purchasing power persists and accelerates.
Third, because productive investment and capital expenditure decline, employment may remain acceptable in the headlines, but real wages, productivity, and the ability of workers to make ends meet deteriorate rapidly.

Today’s narrative tries to tell us that nothing has happened when a lot has. This includes the destruction of the middle class and the deterioration of the small and medium enterprise fabric in favour of a rising bureaucratic administration that consumes higher taxes but still generates more debt and deficits. It does end badly. And all empires end the same way, with the assumption that nothing will happen.

The currency’s acceptance as a reserve does come to an end. The persistent erosion of purchasing power and declining confidence in the legally imposed “lowest risk asset” are some of the red flags some are willing to ignore, maybe because they live off other people’s taxes, or because they benefit from the destruction of the currency through asset inflation. Either way, it is profoundly anti-social and destructive, even if it is a slow detonation.

The fact that there are informed and intelligent investors who willingly ignore the red flags of weakening the middle class, declining purchasing power of the currency and deteriorating solvency and productivity shows why it is so dangerous to allow governments to maintain fiscal imprudence.

The reason why government money creation is so dangerous is because the government is always happy to increase its power over citizens and blame them for the problems its policies create, presenting itself as the solution.”

The CPI – what Rick Rule refers to as the CP LIE – doesn’t include food or fuel which makes it an utterly contrived index. Worse still, it does not even include taxes and yet this is the biggest expense of all – for many it is larger than food, shelter, energy and transportation combined.

Rick notes that for people like himself and the basket of goods he buys, and adding in taxes, it means he is losing around 7% per year on his money.

On a ten year treasury with a coupon value of say 4.1%, which sounds like one hell of a lot better than the 2.0% of days gone by, you are being scammed. If you work out the true rate, it is a disgraceful and debilitating negative 3.9% every year for 10 years compounded on your original investment.

Even the lower echelon within the Fed admit to Rick that the real inflation rate is far higher than what the public is led to believe – this means that there is absolutely no way that they could cut rates, because this would cause even more dramatic loses for depositors and bond holders.

Clearly, the institutional view within the Fed is to not reduce the rate, but within Congress there is a bipartisan desire to reduce rates and particularly within the Biden admin who desperately want to win the next election.

7. BRICS+10 — BRICS+16

onwards and upwards – this subject was discussed extensively back in eCONomics Part (III) of the sequel

Sergei Glazyev’s white paper has received the green light from the Kremlin’s Yuri Ushakov (Putin’s Assistant for Foreign policy) and will be presented to the Kazan summit May 14-19. I will try to do a proper update shortly after we hear the outcome of this important summit.

In the meantime the BRICS+ progress remains relentless, especially given that the BRICS+10 control the lion’s share of the global energy complex – the scale of the de-dollarisation process is poised to reach a completely new level. This is an utterly terrifying and self- inflicted situation that the Western hegemon finds itself in – they dug their own hole and are still digging.

We are now witnessing the creation of an immense socioeconomic-security bloc that will have more than 90% of global wealth and resources to back it up.

8. Don’t Blame COVID for the Looming Meltdown

— in fact the u$ economy was on the rocks well before any of us had even heard of covid – see the implosion of repo market in August 2019 on Trump’s watch.

Suffice to say the repo market that completely imploded on Trump’s watch when none of the banks trusted one another’s collateral any longer – even treasuries were not trusted any longer, as it became known that there could be multiple claims on them too. The repo market never recovered, and now sits at around $2 trillion as reverse repo – obviously the banks don’t want money on the street, and would rather hand it over to the Fed overnight.

Some of the big players see what is coming down the pipeline now too, and they are sucking PMs out of the exchanges.

NB – the U$ dollar is worth only 3 cents now compared to its value when the ‘Creature from Jekyll Island’ was incorporated. The next step is the road to a big fat ZERO cents worth, which is where all fiat ends up sooner or later.

There is also the opportunity for the PBS and FTT models to be deployed in sovereign countries where they can be introduced without hegemonic retribution and intimidation.

Within the BRICS+ block, it will be a case of letting 190 flowers bloom with the sharing of the success stories within so that the models that work in a particular set of circumstances can be embraced by other regions/countries with the confidence of them being already proven working models.

This would be an ongoing organic process that involves continued decentralisation and bottom up governance in a mix of cooperative endeavour that works to develop the real economy and to create permanent wealth for all of society, rather than just permanently feathering the nests of the parasitic financial casino economy.

I’m not going to label the new paradigm with any of the existing ism’s because this will be something completely novel. There should really be only one central maxim necessary – ‘treat others as you would wish to be treated yourself’ – that’s it!

The ongoing transition should be be a gradual orderly and organic evolution as new models prove their worth in the real world leading to a renaissance of the true human spirit.

9. The Hegemon’s Rapidly Deteriorating Financial State

On current trends the Biden Admin looks set to increase the existing debt of $34.5 trillion by $7.3 T to a mind-numbing $41.8 trillion.

If they could foist a retail CBDC on the country, then there are effectively no limits as to how low they can push interest rates. Negative rates could be invoked to eat up principle. Imagine that, when they have already destroyed 97% of the purchasing power of the dollar.

Using the existing commercial banks for the retail account doesn’t make CBDCs any more palatable as they would simply be using the commercial banks to distribute their policy, whilst achieving much the same effect as every man and his dog having a personal bank account at the Fed.

It is impossible for me to imagine any scenario where a retail CBDC is desirable

… but the absolute worst case is if it was administered as a retail account at the central bank in the case of the farcical Fed model, where that entity is 100% owned by a cartel of thieving and parasitic private banksters.

Even in a highly developed and extensive public utility banking system retail CBDCs would be a completely unworkable disaster. They would by definition, completely preclude a highly competitive banking system where a multitude of banks and models all compete with the result being beneficial interest rates and a high standard of customer services for society at large.

Retail CBDCs would be tantamount to the Soviet era Gosbank model where for ~70 years there was only one banking entity in the entire country. The result was as disastrous as it was predictable.

Even more alarming is the fact that the U$ FDIC is essentially trying to guarantee ~$20 trillion of deposits with a fund of a minuscule $121.8 billion – that amounts to a truly farcical 0.5 cents insurance on the dollar.

Even Bloomberg admits the fact that with $929 billion of CRE debt becoming due in the next 9.5 months, this could potentially topple hundreds of U$ banks.

10. BITCOIN — A Trojan Horse? — rolled out in during the Lehman debacle

QE started then – TPTB endeavoured to have everything looking as normal as possible so that the public was oblivious to what was going on.

As a rule people who go for gold, silver, and cryptos have the same wish – ie, to operate outside the main system, but does bitcoin really belong in that category?

Surely bringing in a Bitcoin ETF is rendering it into the casino system anyway. Initially they were very appealing to the libertarian who sees the debasement of fiat and is looking for an alternative – but aren’t crypto currencies technically fiat anyway? This is made even more precarious when there are ~10,000 different crypto currencies.

Perhaps we all need to consider the fact that this might have been a cunning plan to get digital currencies out and about in the public domain and normalised in the minds of society at large.

Who was Satoshi Nakamoto anyway, the so-called author of the original white paper and who devised the first blockchain database? Supposedly the work began in the second quarter of 2007, and the domain name bitcoin.org was registered in August 2008.

He allegedly continued in the development of the software until mid-2010 before handing over control of the source code depository and domains to various entities, ending his recognised personal involvement in the project.

According to Wiki, Nakamoto had some $73 billion worth of Bitcoin in 2021, making him the 15th richest person on the planet.

Given that the Japanese term ‘satoshi’ can mean ‘intelligent’ and ‘nakamoto’, ‘central’ was there a playful suggestion behind the name as to who was really behind the scene – ‘Central Intelligence’? – what a horrible thought.

Is this just another ploy to keep money from going into gold and silver and exposing yet another dying fiat currency.

https://m.youtube.com/watch?v=lBo_mVV81n8

11. mRNA Toxins — Another Extremely Bearish Factor 

The massive rate of toxic mRNA jabs deployed in Western counties is an extremely depressing subject, but it would be remiss to not mention this as another giant debacle that will help seal the hegemon’s fate and virtually guarantee a debilitating debt death spiral for much of the West

Ed Dowd’s numbers suggest that globally ~ 2.2 billion people have been either killed or are permanently disabled by the toxic jab roll-out – that’s the same one that Trump still brags about.

97% of the US military were jabbed and their own data shows cancer rates are up ~1000%. Heart disease is up 970% in the US military.

In the UK, 18-39 year olds, jabbed 4 times are 318% more likely to die than their unjabbed contemporary control group.

The German Govt recently admitted that there was no pandemic and that figures demonstrate that the fully jabbed on average surrender 25 years of their life.

In the U$, CDC data revealed that each jab increased mortality by 7%.
Highly jabbed regions showed ~15% higher mortality than 2021.
2 doses and 3 boosted were 35% more likely to die in 2022 than 2021.
By contrast, the unjabbed were no more likely to die in 2022 than 2021.

This will have a disastrous effect on productivity, as not only is the fully productive work force dramatically depleted, but the care of the seriously jab injured will soak up even more labour resources and other expenses.

12. Wrap Up

Oh, and I just located some good news, albeit though, very much confined to the Global South realm. There is a much lower level of debt in the RoW and developing economies, compared to the ravenous NATOstan – it is completely self evident even within the figures released by that dreadful IMF creature…

2022 IMF DATA – % of debt to GDP
World 238%
Advanced’ economies 277%
Euro Area 254%
UK 252%
U$ 273%
Emerging market economies 191%
Others 124%
Low income developing countries 88%

In fact this debt could become almost negligible if the BRICS+ in unison, gave the economic Western hitmen the middle finger salute in all cases where they have made deliberately cynical, unpayable, and predatory loans in the first place.

The new socio-economic paradigm will be premised on cooperative goodwill and mutual progress for all participating countries. In this blueprint a minimum of resources will be spent on killing one another, and member nations will enjoy the security provided by an immense bloc that has more than 90% of global wealth and resources to back it up.

There is also the opportunity for the PBS and FTT models to be deployed in sovereign countries where they can be introduced without retribution from the hegemon – the fiscal and monetary aspects of this model were covered in eCONomics Part II.

Within the block it could be a case of letting 190 flowers bloom with the sharing of the success stories within the group, so that the models that work in a particular set of circumstances can be embraced by other regions/countries with the confidence of them being already proven working models.

This would be an ongoing organic process that involves continued decentralisation and bottom up governance in a mix of cooperative endeavour that works to develop the real economy in order to create permanent wealth for all of society – rather than just permanently feathering the nests of the shadowy figures ensconced behind the parasitic financial casino economy.

I’m not going to label the new paradigm with any of the existing ism’s because it will be something completely novel. There should be only one central maxim necessary – ‘treat others as you would wish to be treated yourself’ – that’s it!

Fingers and toes all crossed, the ongoing transition should be be a gradual orderly and organic evolution, as new models prove their worth in the real world in a monumental transition and a complete renaissance of the very essence of the true human spirit.

And how prophetic were the words of the great Leonard Cohen (my all time favourite Canadian, my friend Emerson) in his epic song ‘Anthem’ which took him some 10 years to complete.

Verse 5 nails what is happening right now, as a torrent of countries clamour join the BRICS+ juggernaut…

You can add up the parts
You won’t have the sum
You can strike up the march
There is no drum
Every heart
Every heart to love will come
But like a refugee

Such a tragedy that this great man passed and never got to see this massive event beginning to unfold.

— strap on a good quality headset, crank up the volume, and accompany Cohen on an incredible journey.

Colin Maxwell – April 11, 2024

EXPLANATION OF ACRONYMS/TERMS/JARGON used in the article…
AKA = Also Known As
CB = Central Bank
CTA = Commodity Trade Advisor
COMEX = The Commodity Exchange Inc. = the world’s leading derivatives marketplace for trading metals – formed 50 years ago specifically to rig gold and silver prices, to try to protect Western fiat currencies
CPI = Consumer Price Index
CTA = Commodity Trade Advisor
ETF = Exchange Traded Funds
EFP = Exchange of Futures for Physical
Global South = all countries apart from NATOstan = AKA RoW
GLD = the SPDR EFT gold share Nasdaq ticker/symbol
NSFR = Net Stable Funding Ratio
NATO = North Atlantic ‘Terror’ Organisation
NATOstan = NATO plus its yapping lapdogs and sundry hangers on – sadly this group includes both NZ and Australia
Repo = Repurchase Agreement – a form of short term (often overnight) form of borrowing for dealers in government securities
Reverse Repos = the reverse of a Repo – it is the party originally buying the security
Rinse-able = this term refers to investors that can be lured out of their long positions
RoW = Rest of the World
SPDR = one of the family of ETFs managed by State Street, the TBTF largest asset manager on the planet with around $44 trillion in assets under management, custody and administration – it tracks the price of gold bullion in the over-the counter market – the SPDR gold share ETF is known as GLD
TPTB = The Powers That Be

Global South

eCONomics Part IV: Interest Rates Manipulation

In this part: Interest rates manipulation as a way of tackling inflation — one of the most shocking financial scams of all time; plus an update on de-dollarisation and No Plan B for Uncle $laughter

With thanks to our own Colin Maxwell of New Zealand.

Please see: Part 1 ; Part 2 ;  Part 3

Introduction

It should be of no shock to any of us by now as to the reason WW1 began a very short time after the U$ Fed was incorporated, and this set the tragic pattern for the next 111 years. This tiny group of bankster plutocrats were handed on a plate by Congress a giant counterfeit printing press – a privilege that these thieves would deploy to progressively impoverish the working classes of most of the planet.

I won’t go into this too deeply here as I covered the background of the Frankenstein-like creature from Jekyll Island in the link below – my April 2022 expose’, and the debilitating effect this dreadful bankster construct has had on the global financial scene ever since:

Midnight Train to Georgia

It remains my life’s mission to expose the fact that the Western central banking industry, and its plutocratic owners operating in the shadows, are the head of the human food chain and the underwriters of more than 90% of humanity’s wars, terrorism, and financial impoverishment.

The great news though is that humanity is being thrown a lifeline by the BRICS+/BRI blocs and their related initiatives. Indeed all we have to do is to summon up the presence of mind to recognise this new reality and to reach out and grab the opportunity with both hands. The background of this new global paradigm was explored in Part III of this sequel –

Banking 2.0

The solution will be multi-faceted as it will involve a new global paradigm – never again will a single national currency have dominance – the new system will include a novel trade-only settlement instrument which will be stable, hard backed, and yet still able to provide adequate liquidity for the participating members’ productive economies.

In reality, WW1 never ended – WW2 was a follow-on with a brief respite of barely one generation in between, paving the way for the future hybrid financial, and techno, forever-wars. These, including the COVID debacle and the great poisoning with chemicals and pharmaceutical toxins, are simply a continuation of the same families pulling the strings from the shadows.

This is the business of human butchery and their intentions are becoming more explicit and outrageous as each decade passes by. In every sense of the word, this plutocratic network is a blatant terrorist organisation and needs to be dealt with accordingly. The rules of engagement should be the same and history reminds us that the only sure-fire way to deal with organisations like this is to permanently cut off their funding.

Because the New York Fed is the most outrageous model ever devised and has become the number one money spigot of the globe, this is precisely the place to start. This has never been more urgent as it is painfully obvious that there is a push for another bank run crisis which the owners of the banking cartel think will give them the crisis excuse to usher in a new retail central bank digital currency (CBDC) system where every man and his dog can have an account within the “Federal Reserve” system. This is their grand plan, which if successful would give the commercial banking cartel total control of every aspect of our lives through a social credit control and tracking system of all retail account holders.

1. Professor Richard Werner

“empirical evidence is that interest rates are a lagging indicator and a farcically ineffective monetary tool”

paraphrased/quoted from… https://soranomics.com/#content_20_fancybox-8

As Werner points out, it is not interest rates, but bank credit that determines economic growth, simply because ~97% of the money supply in our Western fiat currencies is created out of thin air by privately owned commercial banks.

There is zero basis for the official narrative that higher interest rates lead to lower growth and that low interest rates lead to high growth.

As with most aspects of eCONomics the quickest way to get straight to the truth is to simply assume the 180˚ polar opposite of the official narratives. Interest rates are simply not useful as a monetary policy tool – PERIOD! (23:30)

Interest rates actually follow growth – so where on earth did this idea come from that interest rates are this key variable? – it is not based on empirical evidence but on the concept of equilibrium which is based on no less than 8 assumptions none of which hold up in the real world…

1. Perfect information
2. Complete markets
3. Perfect competition
4. Instantaneous price adjustment
5. Zero transaction costs
6. No time restraints
7. Profit maximisation of rational agents
8. Nobody is influenced in any way by the actions of others

(29:00) The methodology in Economics is the Deductive Method – reverse engineering AKA Charlatanism.

2. eCONomics

eCONomics — the pioneer pseudo-science that paved the way for other disciplines to follow as a tool of central planning and globalist agendas

Karl Popper called this the ‘immunising stratagem’ which scientists fancied could guard their theories from being challenged by the use of reverse engineering in what became known as the ‘deductive approach.’  This is my interpretation of the process…

1. Predetermine a conclusion that supports the banking cartels’ grand theft from Mainstreet
2. Invent a model that can give you that contrived conclusion
3. Identify the false maxims that can propagate the lie and present them as facts
4. Present these steps in the reverse order
5. The network that has the key to the giant printing press then buys up all of the networks and agencies required to manufacture the narrative, even when it is nothing more than a bunch of myths premised on deliberate lies

3. How high would hikes need to go to arrest inflation?

High enough that they cripple the real economy before there is any ‘measurable effect’ (sic) on what they labelled ‘inflation’

Poet Lawrence Ferlinghetti asked… “whether man must burn down his house to roast his pig…”

The current Western neo-classical monetary policy used to tackle inflation is precisely that scenario.

Worse still, history illustrates that interest rate hikes have to be so utterly brutal that they need to be at the very least at the level of the true inflation rate, or higher – Paul Volker did this in the 1980s when the rates were pushed above 20%. This was construed as successful from the point of view that it appeared to halt inflation when all it had done was destroy enough of the economy and liquidity to make sure ‘inflation’ was halted.

In 1979 the federal funds rate had averaged 11.2% and Volker took them to a peak of 20% in March 1980. The prime rate topped out at 21.5% in 1981, which heralded (surprise, surprise, NOT) a rise in unemployment to over 10% and the 1980-1982 depression.

“Volcker’s Federal Reserve board elicited the strongest political attacks and most widespread protests in the history of the Federal Reserve (unlike any protests experienced since 1922), due to the effects of high-interest rates on the construction, farming, and industrial sectors, culminating in indebted farmers driving their tractors into Washington, D.C. and blockading the Eccles Building.
US monetary policy eased in 1982, helping lead to a resumption of economic growth.”… Wiki quote.

Although I am a great admirer of Ron Paul – IMO the quote below reveals that even he was not aware of the utter falsehood of attempting to use rate hikes as a constructive monetary tool to address inflation.

“Being in Congress in the late 1970s and early 1980s and serving on the House Banking Committee, I met and got to question several Federal Reserve chairmen: Arthur Burns, G. William Miller, and Paul Volcker. Of the three, I had the most interaction with Volcker. He was more personable and smarter than the others, including the more recent board chairmen Alan Greenspan and Ben Bernanke.”

Volcker may well have been smartest, but in my opinion all three wreaked havoc on Mainstreet and massively rewarded the financial economy at the expense of families, SMEs, and the productive economy. As Volcker aged, he became more critical of the banking industry but that was long after he had spent his career indulging and implementing most of the destructive hoaxes of neo-classical eCONomics.

Other features of Volcker’s career…

• A prominent member of the Trilateral Commission which was founded by David Rockefeller, Zbigniew Brzezinski, and Jimmy Carter
• A long association with the Rockefeller family including in his position at Chase Bank
• A long-standing member of the Bilderberg Group

SUMMARY:  interest rate hikes are not an effective monetary tool to address inflation – on the contrary, they instantly feed inflation just as hikes in energy prices do – you do not even require the most basic economic nouse to understand this principle – it should be self-evident to anyone with an IQ even approaching room temperature.

4. Safe Havens in times of financial strife – where are they now?

In the 1980s the level of total debt was so much less than it is now that the entire financial meltdown was at a totally different level. Today just the Govt debt alone is a death spiral in itself, with an extra $1 trillion added every 100 days.

In 2024 the U$ will have to issue $10 Trillion in Treasury paper to finance more deficits and to roll over old paper at much higher interest rates. The revised cost of this debt will rise from ~$1 Trillion to $1.5 Trillion. This is a debt spiral where more and more money has to be borrowed just to pay the interest back – paying down debt is not even on the radar.

All of the big 5 Western fiat currencies have this problem including the three sometimes referred to as ‘default currencies’ – the dollar, the Yen, and the Swiss Franc – these used to be seen as safe havens to hide when the financial/geopolitical shite hit the fan. Now none of these are safe any longer, and so the pressure will really come onto these currencies as there are now viable alternatives that countries can use in their accelerating de-dollarisation strategies – these include…

• Gold stacking by central banks — this is at an all-time historical high at around 1000 tons per annum for the last few years – this is a no-brainer, especially now that Gold is a first-tier asset under the new Basel III regulations – this facilitates the process, out of plain sight.
• Silver – although not monetized like gold under the new international banking regulations, at a 90:1 valuation compared to gold at a historical average ratio of ~16:1 this has to render silver the most undervalued commodity on the planet – silver makes for a fascinating story given that it is both a monetary and industrial commodity and the fact that 85% is mined as a by-product of other PMs. Silver is the absolute wildcard when the big reveal of the Western fiat currencies commences – at 16:1 with gold at $2,500 oz that would put silver at $156, with gold at $3,000 – silver would be at $187, gold at $5,000 – $312, and at $10,000 – $624! Another way of looking at it is that silver has basically been demonetised since 1873, and if it reverted back to its primary historical value as a monetary metal, then it would be around 1/10 of the value of gold per oz, which with gold at $2000 per oz, that would price silver at $200. IOW two entirely different methods render a similar result.
• Any and all commodities that are needed in the future
• Crypto-currencies — if you trust them enough – although arguably some are more trustworthy than certain national currencies – they also carry the added bonus of being another way of disenfranchising the private banking cartel

To me the Western safe havens no longer exist, as the main Western fiat currency economies now face a very unpleasant binary choice between either…

A. Severe hyper-inflationary depression, or
B. Severe and extended debt liquidating depression

5. A tribute to Pepe Escobar’s recent work in Russia

What a privilege for us all to have such direct access to Pepe’s insights. I regard him as the undisputed global high priest in terms of geopolitical analysis and journalism. I am most certainly not alone in this view, judging by the audiences he pulls in terms of readers and interviews with people of note in this fight for multi-polarity and who are involved in developing the architecture of a new paradigm in global socio-economic methods and relations.

His audience with Glazyev, whom I have enormous respect for as an honest and courageous economist, was particularly intriguing, and not the least because some of the revelations were done off the record. My own personal hypothesis is that the entire development of the new trade instrument is making great progress, but that there is no point in rushing the announcement of the final details, as long as there is still ample opportunity for BRICS+ countries to gold stack… see above chapter (4) first bullet point.

Of course, this opportunity is entirely courtesy of the U$ obsession with massively shorting gold in this pathetic attempt to hide the plummeting purchasing power of their currency. It could be any day now when an entity insists on a large physical tonnage and the physically driven price discovery process begins. When that happens the gold price will break out and it will be time for the various player’s hands to finally be revealed.

In the meantime, the RoW carries on carefully checking out further de-dollarisation strategies and putting the finishing touches on the new trade instrument. As I said previously, the BRICS+ bloc has an enormously strong hand, whilst all the West has is the grim reality of an impending debt spiral.

Glazyev sees the next stage as detaching commodity prices from the dollar and quoting them in other units. This involves the new model based on two different baskets – a basket of currencies of member countries, and also a basket of exchange commodities. The fact that this currency will be so inherently stable will make it more attractive than the dollar, the pound or the euro.

Technically the trade currency instrument is almost ready, and the process only requires the political will and acceptance by India and China. In the meantime, the transition to settlements in national currencies is well underway.

The trade instrument will be backed not only by the national currencies but by the huge reserves of the nominated commodities that combine to back up the new international settlement currency. This new currency is not a substitute for national currencies.

Once all of the technical issues are finalised, they will prepare an international treaty that will be open to accession by all other countries wanting to join. Glazyev is clearly in no hurry and has put a time frame of within 2 years from when he made these announcements back in late October 2023.

Gazyev listed these advantages…

• Guarantees are created against attempts by outsider countries to interfere in mutual member relations
• Each member country’s trade and position in the financial world is much more secure
• Gives all members an opportunity for equal trade, economic, and investment opportunities
• The distribution of commission income will be regulated by an international treaty
• All of this will be transparent to make certain that no country abuses the issue of the trade currency

5. SUMMARY – The long and the short – literally!

None of this reality is being addressed by Uncle Slaughter and clearly, they have no plan B. A giveaway is the fact that actual military spending for 2022 ended up at a mind-boggling $1.537 Trillion – more than twice the publicly acknowledged level. If nominal GDP is around that $20 trillion then that military budget is a truly obscene 7% of GDP, and equal to more than the next 40 biggest spenders combined.

In fact, the next 40 countries spending totalled $1.431 trillion – some $100 billion short of the U$’s $1.537T and with Romania coming in at #39 in the list at $5.2 billion, it could well be the equivalent of the combined 60 or more highest military spenders.

I eventually got sick of adding and gave it up – besides, I was in dire need of a wee dram.

Colin Maxwell
( March 12, 2024)

Global South

Banking 2.0

Global South

The Western Train Wreck

For GlobalSouth.co by our Col from New Zealand

Western eCONomists and the train wreck they cheerlead

If eCONomists took the time to read and understand the allegory within Baum’s book “The Wonderful Wizard of Oz”, then IMO they would learn more about fixing the broken Western financial system than from all of the current neo-classical textbook tripe combined.

So too, Ellen Brown’s epic book “The Web Of Debt” explains both the allegory and the connection to the most monumental theft of wealth in the history of our species. It seems that none of shills that the MSM promote have even made the connection.

I studied economics in the early 70’s and have had to spend the next 50 years unlearning what is essentially mythology.

All of the maxims are based on faulty models, including how money is created.

Modern-day neo-classical economics is a self-perpetuating myth – essentially it is nothing more than pseudo-science based on a giant hoax which allows money to be created as debt by the giant Western private banking cartel.

No wonder critical theory specialists, engineers, and even lawyers, can be better at understanding effective economic theory than us poor sods who were fed all this tripe at Uni.

99.9% of economists go along with this monumental con job simply because their jobs depend on them perpetuating these extraordinary myths.

Case in point – some snippets from a recent Washington Post (WaPo) article’s outrageous spin on the print fest:

“Since 2020, the United States has powered through a once-in-a-century pandemic, the highest inflation in 40 years and fallout from two foreign wars. Now, after posting faster annual growth last year than in 2022, the U.S. economy is quashing fears of a new recession while offering lessons for future crisis-fighting.

“The U.S. has really come out of this into a place of strength and is moving forward like covid never happened,” said Claudia Sahm, a former Federal Reserve economist who now runs an eponymous consulting firm. “We earned this; it wasn’t just a fluke.”

Washington’s success in reviving the economy also suggests a new approach to future downturns, one that relies more on the government’s power of the purse and less on the Federal Reserve’s control of the cost of credit.

“The U.S. has seen a particularly strong GDP recovery and inflation has cooled sooner and more quickly than in other large, advanced economies. And the increase in real wages is unique to our country’s recovery,” Treasury Secretary Janet L. Yellen said in a Chicago speech last week.

The Fed helped by cutting borrowing costs for consumers and businesses and by buying trillions of dollars’ worth of government and mortgage-backed securities to goose the economy.”

A Perfect Storm and a Derivative Time Bomb

IMO the likes of shills like WaPo and Janet can yell all they like but that won’t prevent the a perfect storm of events happening this year – this will be the all time biggest wake-up call for humanity.

The giant derivative positions of the US TBTF banks are time bombs – last time I worked out their derivative/equity ratios, Citigroup was a complete disaster with Goldman ‘Sucks’ being in the stratospheres.

All of the other top six were seriously shaky too. Given that derivative parties are the first in line as creditors, and us deplorables the very last, then this factor alone is a train wreck waiting to happen.

The Great Taking

David Webb’s recent revelations in his free PDF book “The Great Taking” makes the situation even more alarming, as essentially around 90% of the assets we think we own in the Western world, WE DON’T!

It turns out that the DTCC (Depository Trust Clearing Corporation) and its nominee company Cede & Company are now owners of a huge percentage of the stocks/securities/bonds etc around the world and that most of us are merely beneficiaries at best, not owners of these paper assets.

The very name that the acronym DTTCC stands for is dodgy enough, but how sinister is the name ‘Cede’? – the definition of this word –
TO SURRENDER POSSESSION!!!

Cede & Co. is now the owner of record of most of our stocks, bonds, digitalised securities, mortgages, and more; and it is seriously under-capitalised – holding capital of only $3.5 billion, clearly not even a drop in the bucket of what would be required to in a systemic meltdown – this massive anomaly is clearly deliberate.

As mentioned above, the fact that the derivative holders have first call on these assets in any crisis, and can just sell them off without any due process whatsoever, even perhaps simply in a situation of perceived risk, all adds another layer of risk to owning/buying paper assets.

Who on earth would be dumb or suicidal enough to bet against gold

Ummm, that’ll be Da Fed, in its increasingly vain efforts to hide the crash in the purchasing power of the US dollar. It is the only major central bank that has continued to bet against gold.

Even after Basel III compliance turned gold into a first-tier asset class, the Fed and the house has persisted with its idiotic synthetic dollar support.

Meanwhile, this facilitates the other global CBs in their gold stacking which they will continue to do, courtesy of the Fed accommodating them with its synthetic market manipulation.

Gold Stacking is Grossly Underestimated

The Rest of the World (RoW’s) gold stacking is relentless and monetary gold transactions do not require reporting because foreign exchange gold is categorised as money, versus commodity data, that is captured through customs records.

Within this trade lies a much higher de-dollarisation process than many of us realise, and the disparity between the overall Western gold holdings* and the estimated 60,000 tons accumulated by the now well-established (2013) Sino/Russian alliance, puts these two parties in control of a real market-driven physical supply price discovery process.

*(let alone the Fed – which due to unbridled rehypothecation could be close to zero or even negative – remember the last proper audit was in 1953)

The RoW can pull the pin whenever they want and the multiple military flash points make this all the more likely.

Also, the PBOC’s access to >20,000 tons of Chinese citizens’ gold, held in the Shanghai Gold Exchange, raises the potential physical supply to more than 80,000 tons.

In the case of the PBOC needing these holdings, it would not be a case of confiscation – the owners would be provided with a generous lease fee for allowing their gold to be used as a patriotic measure.

Now You See – Now You Don’t – Are the U$ Pinning their Hopes on Discovering Alchemy?

Europe’s tiny central bank gold holdings are probably accurate and likely not rehypothecated to any great extent, but the same cannot be said for the US’s claimed 8133 tons of US gold holdings.

It is almost certain that there are multiple ownership claims on each ounce, and this is why global central banks are quietly repatriating physical bullion. The same with silver the paper claims for each physical ounce are at least 90:1. The silver price discovery market is even more broken with the true G:S ratio needing to be more in the realms of 8-16:1.

Texas is very wise building its permanent state depository and recategorising gold as legal tender. They do not trust the centralised system either, and now at least six other states are looking to follow Texas because they simply have zero trust in the management of the US Treasury gold.

If Texas doesn’t trust the system, then why on earth would the RoW?

Foreign Exchange Reserves Quietly Converted into Gold Bars

It turns out that the massive global shadow banking industry, and with gold being auto-categorised as foreign exchange reserve, that this combination has hidden the fact that large swaths of foreign exchange reserves have been converted into physical gold.

This trend dates back to at least 2010 but really ramped up when the US weaponised the dollar in March 2022 with Russia’s SMO in Ukraine.

This makes a ton of sense (literally) for the RoW, as it amounts to de-dollarisation by stealth – converting incumbent US dollar debt into stacks of debt-free bullion.

Furthermore, this sanction proofs potentially trillions of excess reserves – a no-brainer when the entire globe is in such a state of financial and military turmoil.

Estimates are that China has around $6 trillion in excess FX reserves giving a truly staggering gold/GDP ratio compared to Europe with a pitiful 4% average and the US potentially massively negative.

Summary

As long as the U$ perseveres with the 100% private bank cartel-owned Fed model, the economy is guaranteed to crash and burn.

Worse still, commercial banks create ~97% of the money supply in most Western economies, which means that all of these fiat-based currencies are doomed.

US Rep. Wright Patman (Chair of the House Banking Committee) identified the problem back in 1941 and no one listened…

“I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money. I believe the time will come when people will demand that this be changed.

I believe the time will come in this country when they will actually blame you and me and everyone else connected with the Congress for sitting idly by and permitting such an idiotic system to continue.”

… end quote…

A Broken Model

The current U$ model is so broken in its obsession with monetising debt, that it now takes $1.55 in budget debt deficit to generate $1 of ‘growth’, and $2.50 in new debt to generate $1 of GDP.

The current debt death spiral, which was always an inevitable consequence of a self-destructive financial capitalism reality, is now in full swing.

Until the Fed’s ruinous model is completely dismembered, and money creation is conducted as a public utility, any other attempted reform is tantamount to tinkering with the font on the Titanic’s breakfast menu.

Ellen Brown’s most recent epic book (2019) focused on this subject too – ‘The Public Banking Solution’ – in which she outlines successful models that date back through the centuries. Ellen focuses on solutions rather than just endless commentary on the problems we all face.

Tragically all of this is ignored by 99.9% of economists and financial commentators. It appears that Western economies will have to crash and burn before the critical mass develops an appetite for meaningful and effective financial reform.

My personal interpretation of unfolding global events suggests that the train wreck is due in 2024 – not a lot of time to prepare.