Welcome To The Hyperinflationary Depression...

April 12, 2020

The title of Leo Tolstoy’s massive tome, War and Peace, which many have heard of but few have read, implies a cyclical alternation between these conditions, which never ends, no matter how great the level of technological advance, because of the nature of men, which does not change.

It is the same with the great economic cycles which alternate between boom and bust. Once a parasitic overclass gain absolute power and a society is riven with corruption, decadence, graft and nepotism then its downfall is assured and is only a matter of time – and what empowers the parasitic overclass more than anything else is a fiat money system, which enables them to award themselves unlimited funds the better to live off the backs of the labor of everyone else, and no entity on the planet provides a more graphic example of this than the US Federal Reserve.

The ending of the Gold Standard in 1971 ushered in the age of fiat as we now know it, and the profligacy that this enabled sowed the seeds of the total destruction of currency and the period of extreme crisis that is now starting; we are now going deep into the bust part of the long-term economic cycle as the 16 million or so workers who have just lost their jobs in the US in the space of 3 weeks know only too well. Whilst the dollar has remained relatively strong compared to other currencies in the world, this is only because, up until now, it has enjoyed the status of being the global reserve currency, but if you want to see what has really been going on you have to take a peek beneath the hood, which we can do by looking at the following chart showing the astounding decline in purchasing power of the dollar since the Federal Reserve was created in 1913…

Chart from goldtelegraph.com

Just as a fiat money system is ultimately self-immolating, that is, it destroys itself by eventually rendering currencies worthless, so is Democracy a condition that cannot persist. Democracy is an absurd concept that is peddled to the masses to make them think that they are free. The reason that it is absurd is simple – you cannot have a system of government that is determined by a “one man, one vote” principle because it affords stupid ignorant people the same say as intelligent and discriminating people, who they of course vastly outnumber. The result is mob rule where the politician who kisses babies, and tells the masses what they want to hear and promises the Earth gets voted into power, regardless of his intrinsic capabilities. In this system, power goes to those who can tell the most outlandish lies and who can control the media to manipulate the minds of the masses, who, being sheep, need to be told what to think. This is why, in the US now, you have to be a billionaire before you can even think about running for President, because you have to be able to buy enough air time on the media, and bribe and buy off various people along the way to successfully advance your campaign. Eventually, the most powerful interests control what degenerates into a circus, and democracy steadily morphs first into an oligarchy and then finally, the switch is thrown and it becomes a dictatorship. That is the point we have arrived at now in the US with the two party sham that has already existed for years eventually becoming one in all but name, as power becomes absolute and there is no longer any need for pretense.

What makes the current economic situation so catastrophic is that the fiat system has been used to keep the normal corrective forces of deflation at bay. In a normal economic cycle, boom phases are followed by deflationary periods which correct excess and cull inefficient entities or companies, enabling them to be replaced by those that are more efficient and in keeping with the demands of the time. Politicians don’t like this, because childish voters don’t want to make sacrifices or defer gratification to make a better future – they want it all and want it know – and will take it out on any politician who tries to impose austerity on them. So, in a fiat money system, all that politicians have to do to assuage the masses is reach for the “print” button and let someone else sort out the mess later. This is what leads to the serial “can kicking” that has gone on for decades now, since Nixon ended the gold standard in 1971, but the problem is that we have come to end of the road with debt and derivatives maxed out to astronomic extremes, and the can cannot be kicked any further, but as we have seen in recent weeks with the Fed desperately printing trillions, that won’t stop them from trying. Since the corrective forces of deflation have been prevented from doing their necessary work for decades now and are still being obstructed, we now have an explosively unstable situation that leaves only one alternative, which is hyperinflation.

Actually, the financial system has been on life support since it went into “cardiac arrest” in 2008, when, instead of letting deflationary forces cull the corrupt banks and other institutions guilty of malfeasance and outright grand larceny, swindling investors with their sub-prime garbage etc, they were bailed out at public expense by their crony friends in government in a classic act of can kicking, and so the system has been kept limping along in a zombiefied state for the past 12 years by means of profligate money creation via the QE programs and Operation Twist etc. which fuelled massive asset bubbles and created the conditions for the unstoppable total meltdown we are now witnessing.

They kept the plates spinning in the air for as long as they possibly could, to enable them to put off the day of reckoning and squeeze the last dollars of profit out of it, with CEO’s and other management walking off with huge bonuses after massaging their companies’ stocks higher via buybacks, but eventually the plates starting crashing to the ground with the repo crisis last Fall, when the Fed stepped in with dollops of cash to stop the credit markets seizing up completely. However, when it became obvious that the markets were going to crash anyway, they had to line up a scapegoat, something to blame, so that when the markets finally imploded it wouldn’t be attributed to their incompetence and mismanagement – enter Covid-19.

But it went a lot further than being able to use Covid-19 as a scapegoat. Knowing the game plan, they had already mapped out how they were going to use the crisis to increase their power and control still further, and you will have noticed how they waited until enough flights had returned from China to “seed” the rest of the world with the virus before flights were banned. Thus the mainstream media, which they control, went “full Monty” with wall to wall coverage of the virus crisis, painting it as the new Black Death and scaring the sheep witless with lurid reports of people struggling to breath in ventilators and coffins being piled high etc. The result of this media blitzkrieg was a public cowering in terror who actually welcomed being placed under “shelter in place” orders – in other words placed under house arrest – in many places now you can’t even go for a walk on a deserted beach without wearing a mask. The craven gullibility and stupidity of the masses means that they actually deserve what is being done to them – and what is coming down the pike which is a whole lot worse, for the fact is that this virus epidemic has been blown out of all proportion by the “feudal overlords” who now control our world, in order for them to pursue their objective of absolute power and control. Most of those who are killed by this virus are old with pre-existing conditions that would have killed them anyway, and even if you include them in the tally, and you have say 10,000 killed in New York which is among the worst places, that is still a low number in relation to the total population. DO THE MATH – if there are, say, 10 million people in greater NYC, a modest estimate, then 10,000 dead is just 0.1% of the population, and while obviously a tragedy for the individuals involved and their families, it’s hardly on a scale with the Black Death which killed one in three – is this worth wrecking the economy and throwing many millions out of work by effectively shutting down the economy? – no, of course not. For the economic privation, destitution and stress caused by shutting down the economy and confining people indoors will obviously end up killing far more than the virus. By exercising sensible and proportionate precautions like wearing a mask, washing your hands with disinfectant soap frequently and not touching things you don’t have to, you should be free to go about your everyday business as usual – probably some more people will die, but less than those who will die if the economy is frozen, and at least people will be able to live relatively normal lives in the meantime.

We must therefore presume that there is an agenda behind this economic freeze and social lockdown, and you don’t have to look far to find it. In the US this shutdown is destroying thousands of small businesses, which is precisely what it is meant to achieve – the big corporations will of course be bailed out by the Fed. The objective is to force as many small businesses as possible to close and their owners and their employees either to work for the large corporations, or to go cap in hand to the banks or some government agency for a loan, which if granted will be at usurious rates of interest, of course, compared to what the favored big corporations pay. By this means the State gains more power over people – a vulnerable employee has much less political power and say than an independent business owner and is thus more readily controlled – and exploited. But it goes even further than that. This lockdown amounts to martial law, especially in the US, where the police have pretty much the same kit as the army. Some years back the police were militarized across the US in anticipation of just the sort of situation that we have now and the amazing thing is that martial law didn’t even have to be imposed – the sheep were begging for it, having been scared out of their wits by endless lurid TV coverage of the virus pandemic.

Our ancestors would be ashamed of what many modern citizens have become – apathetic, careless, cowardly, gormlessly, insouciant, lazy, malleable, selfish, self-indulgent, spineless, weak, unprincipled, vapid products of the media. Do you think our ancestors would have allowed the government to imprison them in their homes because of a disease that kills 1 in a thousand people? – NO WAY!! - they would have been out with their pitchforks and driven them off. Through years of comfortable safe living, many people have degenerated into wimps or what the Australians call wusses, and people like that deserve what’s coming to them. In many ways most people have become like hydroponic plants, grown in a medium in a vast glasshouse, and nourished by an artificial dripfeed. The majority of people eat adulterated food, laced with additives and often with genetically modified ingredients, live in box type housing devoid of individuality, are disconnected from nature and natural cycles and rhythms, are addicted to social media and stay up late staring at bright screens, and they have their thoughts subtly and not so subtly manipulated and controlled. The reason for mentioning this is because we are heading towards a neo-feudal society, where a narrow elite who may be termed “feudal overlords” control and “farm” the masses, directing their lives absolutely. It is a matrix which is fast closing in and already arriving at the total lockdown stage, and in some ways it will be much more severe and intrusive than at any time in history, because, thanks to modern technological advances, your location will always be known, relayed from your cellphone or your vehicle, with your cellphone requiring to be with you at all times to undertake transactions in a cashless society, your conversations will be monitored, again on your cellphone and in your vehicle or from domestic devices, and in addition to monitoring your conversations and reporting your location, your car will observe you and report any infringement of the law, however minor, which insurance companies will use against you, and lastly and for good measure, the brainwashed neighbors will probably snitch on you.

By allowing themselves to be subject to house arrest and rigid controls on their movements due to this virus scare, the masses have set a dangerous precedent. The power of self-determination so easily given up is going to be very hard to get back, and those in power are certainly going to be emboldened by what they have just achieved so easily. Many people mistakenly think that things will return to normal when this viral pandemic quietens down. This is doubtful – they are probably going to “cycle” this virus thing, so that it has successive waves, necessitating more lockdowns and restrictions of movements and freedoms, or there will be new variants of the virus or even new viruses to keep the game going. The airlines and the travel industry, which have been all but destroyed by this economic freeze and lockdown, will only make a comeback henceforth courtesy of bank and government loans, so their freedom as independent entities will be lost. Mass travel could be a thing of the past, and in order to travel you may be required to produce evidence of vaccination. We can look forward to compulsory mass vaccination and chipping of individuals, which will net billions for the likes of eugenicist Bill Gates who is working towards this, and home schooling will be banned, since the State will not want children growing up who can think for themselves. A cashless society will be implemented so that they know all your transactions and your locations at all times, and if you misbehave you will be economically shut out, as is already happening in China where citizens are treated like children, with a points system. The State will probably demand the surrender of privately held gold, as in 1933, on some pretext, perhaps saying simply that owners of gold are anti-social hoarders. A development that could shock the owners of gold stored in privately managed vaults is that governments may decide that they will simply appropriate them on spurious grounds, such as “in the interests of national security”. As we have just seen with the Fed, when it decided to buy and prop up the junk bond market, which is beyond its remit and technically illegal, those who have the power are going to do just what they like – they are above the law. Woe betide any member of Congress or Supreme court judge who tries to stand in their way.

Many survivalists are of the view that society will collapse leading to a “dog eat dog” Mad Max world quite soon, and without Central Bank intervention now it probably would. However, this does not look likely in the immediate future because if the masses destroy the districts where they live and their infrastructure, as they were doing in Chile last Fall, they will become less productive and less able to serve their Masters. It thus looks likely that the Overlords will grant them sufficient to survive as productive slaves – this was the reason for the miserly $1200 handout to furloughed workers in the US. But it could be that with a combination of the fiscal abuse now going nuclear, leading to money creation accelerating in a terminal parabolic spike, coupled with a severe decline in economic productivity, they completely lose control of the system which disappears into the fires of a hyperinflationary depression, involving a period of chaos and widespread destitution, as in Weimar Germany or Zimbabwe, which is the natural and inevitable end of a fiat money system, forcing a reset and a society rebuilt on sound monetary principles, which of course would ultimately be very good and lead to a sound new beginning.

So you see that we are now going full circle. The economic boom and prosperity that followed the end of the 2nd World War lead at its peak to a generation of young people in the 1960’s especially who by and large didn’t have to work, or work much, because they were able to live on the fruits of the labor of previous generations, and indulge themselves by being hippies and travelling the world etc., experimenting with different lifestyles that were largely characterized by a lack of productive endeavor. Many of them eventually wised up and became successful businessmen in the 1980’s. However, debt continued to expand, especially after the end of the Gold Standard in 1971, and the government’s power continued to grow as it drained more and more wealth from the citizenry. Naturally, mere financial power was not enough for them and thus we had the events of 11th September 2001, which were a spectacular power play and a massively successful major milestone on the road to tyranny, as it enabled them to table and ram through their pre-written Patriot Acts, which override parts of the Constitution and also go after geo-political objectives in the Mid-East, and to make sure that the public got the message about just how powerful they had become, they made air travellers’ lives a misery with draconian and often humiliating screening procedures that wasted millions of hours of their time. This was the turning point at which the freedoms of post-war society in the Western world started to disappear.

Now we are arriving at the final denouement where the system implodes in upon itself, crushed by impossible debts which will eventually have to written off as the system resets. The most vulnerable class of investors now are those holding vast quantities of intrinsically worthless government paper, like US Treasuries, which will end up being worthless.

The part of the cycle that we are now in, namely collapse into depression, which Central Banks, who can’t countenance deflation, are determined will take the form of a hyperinflationary depression, will, if history is any guide, lead to the emergence of fascist dictators – strongmen who are able to relate to and harness the anger and frustration of the masses. This in turn is likely to lead to wars or a major war as the masses discontent is conveniently focused on external enemies. This may be a reason why Ground Zero for the Covid-19 virus was China, and why Donald Trump refers to it as the Chinese virus, so that it will later be possible to use this to generate anti-Chinese sentiment in any potential conflict with China.

The Fed’s latest actions demonstrate that there is no way that they are going to let the forces of deflation prevail, however many trillions they have to spirit into existence to throw at markets in an effort to prop them up, which is kind of understandable given the appalling severity of the prolonged depression that would follow. They are clearly electing the hyperinflationary route as the lesser evil because it keeps them in power for longer, although hyperinflation won’t hit until the velocity of money picks up – currently it is zero because of the economic freeze. That has to be positive for gold, which is the ultimate store of value and for its currently grossly undervalued sister metal silver.


1 cubic foot of silver weighs approx 655 pounds whereas 1 cubic foot of gold weighs more than half a ton.

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