Outrageous financial conditions you say. Good heavens what could you possibly mean? Well, let’s start with the basics. Our government is drowning in debt. The world is drowning in debt. The banking system is sitting on huge unrealized losses because of interest rate debt as well as greed and corruption and an imploding commercial real estate market. The political situation and leadership at home are outrageous coupled with the government’s historical deficit spending. The global geopolitical situation is getting more outrageous and disturbing by the day. The Mises Institute said this week that besides the situation between Israel and Palestine, you also have
the ongoing war in Ukraine, a less-talked-about conflict between Armenia and Azerbaijan, and the threat of renewed fighting between Kosovo and Serbia, and the world is witnessing the breakdown of a global order established by modern assumptions that are being exposed.
Recently Jamie Dimon, the CEO of JPMorgan Chase said
This may be the most dangerous time the world has seen in decades. Beyond the military conflicts in Ukraine and Israel, Dimon cited the burgeoning national debt and
the largest peacetime fiscal deficits ever. Ok Jamie we respect your point of view as the most powerful banker in the world. But unfortunately my brother you are the master manipulator when it comes to derivatives that the world has ever seen. You and your cohorts have done nothing but add to this leveraged risk. Your entity controls $60 trillion in financial derivatives. Not to mention the many convictions and fines JPMorgan Chase has incurred because of price rigging in almost every commodity market known to man. Not to mention being the sole banker to Bernie Madoff and Jeffrey Epstein. Are you kidding me?
Well, let’s get back to today’s discussion. If we look simply at the financial markets, the looming debt crisis, the social chaos, the political confusion, the banking sector failures 6 months ago, the abnormally low interest rates for twenty years, free money, money printing, and the biggest asset and derivative bubble in history, I think we can concur that we are experiencing historical outrageous financial conditions as well as others such as socially and politically. I would argue these outrageous conditions are of epic proportions. These outrageous financial conditions will inevitably lead to outrageous results, and I don’t mean outrageously good results. But what could these outrageous financial results be and how would they affect our savings and our retirement accounts? Now that folks is an important question. Let’s spend this week’s article on some what-ifs. Please excuse my creativity, but I would like to discuss some possible outrageous outcomes that will directly affect our money.
The banking sector will inevitably restrict and limit the movement of our money
This past March 2023, the US banking sector saw some of the biggest bank failures in its history. When banks have to realize their losses on bonds, commercial real estate, and bad loans they are insolvent. It is a fractional banking system based on debt and leverage. When the numbers become so outrageously big and leveraged, it is only a matter of time before something wrong happens. When depositors all show up for their money at the same time to make withdrawals or electronic transfers, the money they are looking for simply does not exist. Why else do you think the FDIC does not want depositors to know the situation with FDIC insurance and the outcome of bank runs?
The interest rate environment is making the situation worse for the banks than it was back in March. Banks are sitting on roughly $600 billion in unrealized losses. The only reason it’s not even bigger is because the FDIC eliminated the unrealized losses of the banks that failed in March. Not to mention $600 billion was thrown at the banks in March. The solution here for the banking sector is to restrict and limit the movement of our money. This includes retirement accounts as well. In essence, your money will be stuck and you will not be able to get to it when you need to. Maybe we see a 5% or 10% annual withdrawal limit and something similar. Giving the banks more loans under the Bank Term Funding Program is just delaying the inevitable for the banks drowning in bad debt and debt expense. Many people will see this banking system decision as outrageous. Too bad most people will be stuck.
The biggest market of all the bond market is staring at a crisis
How many times have you heard that the bond market and the Treasury market are the safest markets in the world? Even Alan Greenspan in his famous video clips has stated that the “United States would never default on its debt because it can always just print more money.” What is interesting is that the buyers of US debt used to be foreign governments, US commercial banks, and the Federal Reserve. The new buyers of US debt are hedge funds, mutual funds, insurers, and pensions. The issue is that the new buyer base is likely to demand a heavy premium to finance Washington’s spendthrift ways, especially with debt sales set to surge as deficits swell. These investors will require a higher yield to buy debt. What if interest rates went up to 15% or 20%? Years ago we said interest rates needed to go to 12% to combat the inflation scenario. The debt crisis is quickly approaching.
Long-term bonds are down 40–50% in most cases over the past three years. Foreigners hold roughly $18 trillion worth of US assets. Roughly $7.5 trillion of these assets are US Government debt. The US Government deficit spending is increasing. Our government is looking to add $1.9 trillion by the end of 2023. What if foreigners like BRICS start simultaneously dumping existing US Treasuries into an already obvious US debt crisis? Dumping of bonds versus more buying of bonds will further increase interest rates, I am sure borrowers including companies, individuals, mortgage owners, and governments will find these outcomes to be extremely outrageous. How many times have we repeated that you cannot fix a debt problem by issuing more debt? That may work when interest rates are zero, but that scenario is no longer the case. The bond market debt is outrageous and the result for the markets will be outrageously devastating. The bond market will bring down all markets.
Digital ID Model Governance Framework leads to CBDCs
CBDC stands for Central Bank Digital Currency. It is a digital form of a country’s national currency that is issued and regulated by the country’s central bank. Unlike traditional forms of currency, such as physical banknotes or coins, CBDC exists only in electronic form and is typically based on blockchain or distributed ledger technology. If a CBDC becomes widely adopted, there’s a risk that it could lead to bank runs, as individuals may prefer holding digital currency directly with the central bank rather than keeping deposits in commercial banks. This could impact the stability of the traditional banking system. The design of CBDC systems raises privacy concerns. CBDC systems would be vulnerable to cyber-attacks. If the adoption of CBDC leads to a significant decrease in demand for traditional bank deposits, it could affect the ability of commercial banks to lend and create money. This could have implications for the overall functioning of the financial system.
CBDCs may also pose challenges in terms of cross-border transactions and regulatory coordination. Issues related to money laundering, terrorist financing, and tax evasion may become more complex to manage in a digital currency environment. Developing and implementing a CBDC system can be costly and complex. Central banks would need to invest in technology infrastructure, cybersecurity measures, and public education programs. The costs and challenges of implementation could be substantial. While CBDCs have the potential to enhance financial inclusion, there are concerns that certain populations, particularly those without access to digital technology, may be excluded. Ensuring broad access to CBDC services is a crucial consideration.
United Nations Unveils Digital ID ‘Model Governance Framework’
According to Jan Wellmann,
“SDG16.9 is designed to introduce a centrally controlled, global system of digital identification (digital ID). In combination with other global systems, such as interoperable Central Bank Digital Currencies (CBDCs), this can then be used to monitor our whereabouts, limit our freedom of movement and control our access to money, goods and services.”
“Universal adoption of SDG16.9 digital ID will enable the G3P global governance regime’s to establish a worldwide system of reward and punishment. If we accept the planned model of digital ID, it will ultimately enslave us in the name of sustainable development.”
The CBDC is an outrageous outcome of these outrageous financial conditions that the US and the world are in.
An EMP or a solar flare would erase all of those digits you call “your money”
An EMP, or electromagnetic pulse, is a burst of electromagnetic radiation. This can be natural, such as from a geomagnetic storm, or artificial, as in the case of a nuclear detonation, a high-altitude nuclear explosion (HEMP), or a non-nuclear electromagnetic pulse (NNEMP) device. The effects of an EMP on electronic devices are a result of the rapid change in the electromagnetic field, which induces high voltages and currents in electronic circuits, potentially damaging or destroying them. Due to its potential to disrupt electronic systems, EMPs are a concern in the context of military operations, national security, and the resilience of critical infrastructure such as the entire financial system.
Governments have the capability to develop and deploy electromagnetic pulse (EMP) devices, especially in the form of nuclear weapons designed to produce EMP effects. A high-altitude nuclear explosion is one way to generate an EMP. In such a scenario, a nuclear warhead is detonated at a high altitude above the Earth’s surface, creating an EMP that can affect electronic systems over a wide area. What would an EMP do to our outrageous financial system? Would our money or our balances even be there? Would all of the markets be at zero? Probably yes! Would our desperate government do something like that? Would an enemy of the US be that diabolical? I’m not willing to take that chance with all of my assets. Are you?
The US dollar will lose at least 50% of its value over the next 5 years
I recently saw an article written by Graham Summers. He said,
“The US is now adding debt at an exponential rate. The US racked up its first $10 trillion in debt over the course of 232 years. Following the Great Financial Crisis, it added another $10 trillion in just nine years. The next $10 trillion took only four years. And by the look of things, the next $10 trillion will take even less than that. The US has added $2 trillion in debt in the last four months. We’re now adding $1.2 billion in debt per hour.”
What do you think all of this deficit spending and monetary expansion will do to the value of your dollar? The convertibility of the dollar into gold ended in 1971. The petro-dollar that started in 1974 is losing its grip. The BRICS are trying to do business in local currencies and end the US dollar as the world reserve currency. They will eventually back their currency with real assets like gold, silver, and oil. We are backing our dollars by nothing more than debt. Less demand for US dollars and US debt means a lower dollar and lost purchasing power for our US currency. By the looks of it, it will be an outrageous loss of buying power for the US fiat dollar.
Last week Bank of America closed 21 branches in one week. Wells Fargo closed 15 branches. In total, some 54 locations had either closed or were scheduled to close between October 1 and October 7. Of the overall closures, three were in Louisville, Kentucky. Eight of the 21 Bank of America closures were in California. We have mentioned before that banks are becoming “wealth centers.” Banking is headed to a completely digital system. Banks may ultimately limit cash transactions to ATMs. CBDCs will end cash transactions altogether. The commercial banking system is just slow walking the inevitable. I know it is hard to hear that the banking system has already collapsed and that it will be consolidated into just a few names and then the system will be rolled into a CBDC. Most people would find that to be outrageous. Where we are today and where we are headed, seems reasonable to me. The question is if all of your assets will be stuck in the new CBDC system.
So what do we do? Do we hope and pray that all of these outrageous predicaments that we are in financially just sort themselves out? I say we distance ourselves from the inevitable outcomes that are headed our way concerning the markets, the banking system, our money, and the overall financial system itself. The outrageous devastating results that are headed our way do not mean you have to be financially destroyed as the present system is torn down or just implodes under these outrageous circumstances. The ultimate crisis asset is physical gold. Make sure you have enough ounces to justify a lifetime of saving and investing. Distance yourself from the outrageous financial results that are headed this way due to the greed, stupidity, and recklessness of the banking system, Wall Street, and our government.