Topic
The G7 countries – led principally by the United States – are limping toward a financial Armageddon. The US national debt is up to around $35 trillion and increasing by another $1 trillion about every three months.
Just the annual interest required to service the debt is more than a trillion dollars and, with interest rates rising, like the debt itself, the amount of interest due is rising fast. It’s estimated by some that, within 10 years, the annual interest due on US debt will be more than the total annual federal tax revenues.
Let me ask a question: What would your financial situation – and likely financial future - be if just the total annual interest due on your credit card debt was more than your total annual income?
That $35 trillion in debt? – That’s never going to get repaid.
The financial situations of the United Kingdom and the European Union are much the same – a few trillion dollars less, but still an amount of debt that, even throwing a million dollars a day at it, couldn’t get repaid in a hundred years.
So, what’s going to happen? – The “great financial reset” (you should understand the word “great” there to mean “big”, not “really good”). At some point, an economic cataclysm will occur that basically enables the US and its allies to, essentially, declare bankruptcy and start over financially. If you think that can happen without some severe financial turmoil, I would politely suggest that you think about it a bit more. For example, think of a retired individual, average hard-working guy, who has nearly all of his retirement funds invested in long-term US Treasury bonds…bonds that represent debt that is never going to get repaid.
How did the richest countries in the world, with the largest economies, get themselves into this financial quagmire?
Let me paint a picture for you, and then you guess who it is that I’m describing: Self-interested, power-hungry politicians who are much more concerned with enriching themselves than they are with the well-being of the public. Okay, go ahead, make your guess.
Well, if you guessed either “the current United States federal government” or “the Senators and Emperors of ancient Rome”, you were right. You could also have scored a correct guess by pointing to the political rulers of virtually any world empire that came along between those two. Few words are truer than the phrase, “History repeats itself”. Why does history repeat itself? – Because history is made by the actions of human beings, and the basic tendencies of human beings are still just the same as they were when Rome ruled the world.
So, it should be no surprise that the politicians of today think and act much like the politicians of long ago.
That’s how we got into this mess. Now, what’s the escape hatch going to look like?
There are currently two possibilities for a financial “reset” attracting the most conversation. First, there’s the possibility of trading in the US dollar – and possibly several other major currencies – for CBDCs (central bank digital currencies) – digital assets issued by that magnanimous friend of the common man, central banks. (Yes, I’m kidding with that “friend of the common man” remark.) Second, there’s the possibility of a return to the gold standard.
The first possibility seems to be the one currently favored by the G7 countries – the current dominant economic nations, such as the US and the UK, by entities such as the World Bank, the World Economic Forum (WEF), and the International Monetary Fund (IMF), and by fun and interesting people such as Larry Fink, the CEO of BlackRock.
The second option – a return to a gold standard – appears to be more closely eyed by the quickly expanding alternative world economic power base, the BRICS nations, led primarily by the economic alliance of China and Russia. The BRICS group, originally just a handful of nations, has been growing rapidly in just the past couple of years, and, at last count (which may, by the time I finish typing this sentence, already be higher), had nearly 60 more countries applying for membership. There are more than a few economists predicting that the October, 2024 BRICS meeting will reveal the coming introduction of a new currency unit that is 40% backed by gold. In fact, two Chinese and Russian authors have collaborated on a paper laying out the plan for such a new currency, and that paper is expected to be much discussed at the October BRICS meeting. Another hint of a coming gold-backed currency is the recent move by the Reserve Bank of India, a key BRICS member, to repatriate home, from the Bank of England, 100 tonnes of its gold reserves.
When the US weaponized the US dollar by seizing Russian funds in response to the war in Ukraine, it ignited a concerted push by other countries toward “de-dollarization” – that is, getting rid of exposure to the US dollar and, thereby, eliminating the threat of the US applying economic pressure to their countries. Thus, the amount of money that foreign nations has been willing to invest in US Treasuries has been steadily shrinking. China just sold another $46 million of the US debt securities that it holds. Fewer buyers for US debt mean that the interest rates offered on Treasury securities has to rise – and that the dear old Federal Reserve has to be a bigger and bigger buyer of US debt.
So, on one side you’ve got the US-led coalition of nations leaning toward a new digital currency, and on the other side you’ve got the China/Russia-led coalition leaning toward a new gold-backed currency. Which option will win out?
Well, initially, both might. You could have the widespread introduction of CBDCs in some countries, and the return to a gold standard in other countries. But in the long run, I think that the CBDC group may well be left facing the same problems of inflation and loss of purchasing power that are currently afflicting the US dollar. Why? – Because no matter how they might try to pretty up CBDCs, they will still, in essence, be just another fiat currency, a currency that has no value whatsoever other than the government saying that it has a value. In contrast, a gold-backed currency is actually backed by something real – gold – a real, physical commodity – something that you can hold in your hand - that has been universally recognized as a valuable medium of exchange throughout the whole of human history.
Okay, let me get this straight…I’m supposed to believe that a major cyber-SECURITY company accidentally pushed out an update that looks like it crashed about half of the world’s computer infrastructure – banks, airlines, hotels, broadcasting, hospitals – even 911 call centers!!!...Seriously?
Now, look, I’m the furthest thing in the world from a tech guy, so I don’t know how these things work. But I would THINK that, whenever ANY company – much less a cyber-security firm – puts out an update, that they first test it in-house before releasing it. Doesn’t that make simple common sense? And if they did test it, AT ALL, before pushing it out there, how in the world could they have missed an error so huge as to, well, like I said, crash about half the world?
And now, I’m just reading an article Monday morning, reporting that – three days after the fact – the best news that CrowdStrike has to offer is that “a significant number” of nearly 10 million IT outages are back online (Gee, I wonder what “a significant number” is). Meanwhile, experts predict that “a full recovery from Friday’s IT failure could take weeks”.
Again, I’m not a tech guy…but something just doesn’t look right here. Let’s not lose sight of the fact that CrowdStrike’s business is PREVENTING cyber attacks – you know, the kind of attacks that might do something like…crash half the world’s internet infrastructure. Does it make any sense at all that such a company would end up being responsible for what looks like the worst IT outage in history? – In the words of my great aunt, Regretta, “That dog just don’t hunt”.
Let me just float an idea out there for you. Suppose – after people have been scared half to death from being unable to access their money, stranded in airports or hotel lobbies, unable to boot up their computers, unable to even reach a 911 call center in an emergency…suppose that the government then comes out and says that in order to protect everyone, it’s essential that we switch our monetary system over to a CBDC. Just a thought, boys and girls, just a thought.
Larry Fink, the CEO of BlackRock, stated in a recent interview at the WEF that you will have to “force” people to change their behaviors. Oh, and guess what organization CrowdStrike is a proud partner of? – The World Economic Forum (WEF).
Could the CrowdStrike outage have been a sort of test run for a manufactured emergency that would force people to accept the great financial reset? Look, I’m not trying to go down a dark conspiracy rabbit hole here. I’m just thinking out loud, kids, just thinking out loud…and what I’m thinking is that, to me, something looks just a little tiny bit suspicious here. That’s all I’m saying.
So why did I title this article, “Limping Toward Financial Armageddon”? Well, first of all, I just like catchy titles. But there are a couple of serious reasons beyond that. The first one is that – however things play out – you’re talking about a global financial system reset that will inevitably result in an earthquake-size economic upheaval. Can you imagine an announcement that the US dollar - which has been the whole world’s #1 reserve currency for more than half a century - is going to just be done away with and replaced with a cryptocurrency token created by its central bank, the Federal Reserve?
There is also the possibility of a major East-West currency war if what unfolds turns out to be, as outlined above, one coalition of nations moving to a fiat cryptocurrency and another coalition shifting back to the gold standard. The probability of such a currency war is enhanced if the US and NATO nations are on one side, while China and Russia lead the other side. Just suppose, for one example, that China would only accept payment for goods in the form of a US central bank issued CBDC at an exchange rate that was hugely unfavorable to the US. Or things could happen the other way round – the US, in an attempt to prop up its prior position as the world’s main reserve currency, might refuse to accept payment for goods in the form of any BRICS-created gold-backed currency.
Honestly, I don’t know precisely what the financial Armageddon that the world is inexorably sliding toward is going to look like. And I’d be at least a little bit skeptical of anyone who claims that they do know exactly how things will unfold in the next few years. All we can likely say for certain is that it will involve massive financial changes of one kind or another. And one thing is certain: the most successful multi-millionaire investors, along with the central banks of most major (and many minor) nations, are, as they look toward the future, loading up on hard assets such as gold and silver at a rate that, as far as I know, has never been seen before. That is how they are arming themselves for Armageddon.
(Informative Note: I just saw the latest gold and silver price predictions from Robert Kiyosaki, author of the “Rich Dad, Poor Dad” book series. Kiyosaki sees gold near $3,500 an ounce and silver near $80 an ounce within the next year. I just wanted to pass that along before it slipped my mind.)
Sources:
https://www.weforum.org/partners/#C
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