What to expect from the Great Monetary Reset

January 1, 2023 1 Comment

Lenin is said to have declared that the best way to destroy the “capitalist” system was to debauch the currency. By a continuing process of inflation, governments can confiscate, in a covert way, a large share of the wealth of their citizens.

But it’s not just radical socialists who could use inflation as a weapon of social engineering. There are elements within the “capitalist” global elite who want to replace national currencies with a centrally controlled global currency.

The euro could be seen as a trial run for this plan. It has been used as a Trojan horse to undermine the independence of its member states.

Imbalances generated by the single currency brought economic crisis to much of southern Europe. In return for bailouts, countries like Greece and Italy were effectively directly controlled from Brussels and forced to follow EU orders.

Monetary policy has also been used to threaten countries into obeying the EU elite, with handouts restricted if the “wrong” leaders were elected, or EU orders disobeyed. Now there are plans to create a central Treasury with tax-raising and spending powers. This is justified as a way of correcting the eurozone’s imbalances by transferring resources to struggling member states. When this stage is reached, the plan to create a European superstate or EU empire will be close to completion.    

In 1988, the elite-controlled Economist magazine published a cover story with the title “Get Ready for a World Currency.” It called for the creation of a world central bank and a new global currency. This was predicted to happen around 2018, so the plan seems to be running behind schedule.

The transformation could be brought about by an economic crisis – which would push national governments into surrendering their sovereignty. 

The suggested name of the world currency is telling. The Phoenix is a mythological bird associated with worship of the sun. It obtains new life by rising from the ashes of its predecessor.

So, it is quite possible that high or even hyperinflation could be deliberately engineered to bring about economic collapse, creating a pretext for a new monetary regime.

Moreover, some commentators think the elite is planning a Great Monetary Reset – which may also involve the imposition of Central Bank Digital Currencies (CBDCs).

Worryingly, these currencies can be programmable, meaning they could only be spent on goods and services that have been approved by the authorities. This level of social control could be sold to the public as a means of cracking down on criminals and the shadow economy. But it would also enable governments to “switch off” the finances of dissidents and non-compliers.

For example, people who refused an experimental “treatment” could be denied access to their own money as punishment; or perhaps severely restricted in what goods and services they were allowed to buy; or their purchases could be restricted to a particular geographical area in order to re-enforce some kind of lockdown. For tyrannical authorities, this is a far lower cost method of encouraging and enforcing compliance than, say, rounding up dissidents and detaining them in quarantine camps.

These totalitarian agendas appear to be related to the ongoing “War on Cash” and the shift to digital identity systems connected to biometric payment cards. Once again, it seems to be about surveillance and control. An engineered period of hyperinflation would raise the costs of holding physical cash and therefore accelerate the planned “reset” of the monetary system.

Another threat is the imposition of negative interest rates – in other words, overtly stealing people’s savings directly from their bank accounts. This policy is closely related to the War on Cash, and its leading proponents are also active promoters of a cashless society. 

At the moment, central banks are constrained if they want to push interest rates below zero. Savers can easily thwart their plans by removing their money from bank accounts and storing it as physical cash instead. They won’t earn any interest, but it may be better than losing out by keeping it in the bank. By abolishing cash, the central bankers want to force savers into negative-rate assets.

Negative interest rates are of course another warning sign of future high inflation. The argument is they’re needed because the economy is in the doldrums. But central bankers almost always get it wrong. They simply cannot obtain enough knowledge to successfully plan the economy. Thus, their economic forecasts are consistently inaccurate.

Loose monetary policies – for example, forcing interest rates too low – typically sow the seeds of inflationary bubbles and future financial crises, as we saw with the results of the Federal Reserve’s actions during and after the 2001 U.S. recession. (This is one reason that a temporary period of “deflation” can soon be followed by a period of high inflation).

Finally, it is worth emphasizing that if hyperinflation does not occur, a persistent inflation rate averaging 10% still has the potential to destroy a big chunk of people’s savings, particularly if interest rates stay close to zero.    

Richard Wellings

This article is a revised extract from my recent report, Hyperinflation Survival Strategies: Preparing for Soaring Prices and the Great Monetary Reset.

Image: Shutterstock

Filed under hyperinflation, political economy Tagged with , , , , , , , ,

The conspiracy to ban cash

November 20, 2022

You post a controversial tweet. Next thing you know, your bank account has been frozen, and you can’t buy food or access essential services. This is the nightmarish future being planned by powerful elements within the political and corporate elite.

My recent report explains how there are plans for a Great Monetary Reset. High or even hyper-inflation is part of this, but another element is the war on physical cash and the forced shift to a cashless society.

They not only want to destroy the value of our savings; they also want to track our movements, spy on every transaction, and control how we spend our own money.

Most people are completely unprepared for this. In the worst-case scenario, their life savings will be stolen, and their pensions made worthless. They’ll be forced to rely on government handouts and forced to do as they’re told.

They should be taking simple steps to protect themselves, but instead complacency rules – even though parts of this agenda are now being implemented in plain sight.

Governments are at the forefront of this. In many countries, they’re making it harder and harder to use physical cash. They prefer their citizens to use digital payments – cards or smartphones that in the near future will be linked to a totalitarian system of digital IDs.

To give a couple of examples, in many locations it’s now impossible to pay for parking without a smartphone and payment card. And public transport is increasingly off limits to people who want to pay with physical cash.

It’s obvious why governments are doing this. The power elite are feeling threatened. The internet, while increasingly censored, has alerted a significant minority to their agenda. Myths that we live in a free society, or a democracy with a free press, or enjoy freedom of speech, have been thoroughly busted.

Their geopolitical power is also waning, as the West enters a period of economic decline. This increases the likelihood of protests and resistance. A shrinking pie makes it harder for those in power to pay off various interest groups. The rise of the East also creates alternative narratives, as emerging world powers create new propaganda outlets that challenge the incumbent ones.

Crony capitalism is of course the main cause of the West’s problems. But tackling this would mean undermining the various scams on which powerful special interests rely, including the rigged banking system. So, instead, it seems the preferred strategy is to crack down on free speech and persecute dissidents – in other words using violence and coercion to shore up the power elite’s position.

A cashless society with payments linked to digital IDs will make it far easier to impose control. Traditional enforcement methods are costly to implement on a large scale and expose the violent underpinnings of supposedly free societies. By contrast, encouraging compliance could soon be as simple as a government official clicking a name on a list of dissenters.

If they refuse to obey, people who challenge or upset the establishment might have their bank accounts frozen, payment cards disabled, or be denied access to basic services. The authorities have already started to test this out.

Vaccine passports were clearly a trial run. Many observers thought it made little sense for healthy young people to take experimental treatments given the risks from Covid were so small (the shots don’t stop transmission either). Yet huge numbers were “nudged” into compliance because they were forced to get proof of injection to keep their jobs – or even to go to a restaurant or travel.

The digital IDs/war on cash agenda isn’t just a government initiative, however. The role of big business in driving this forward is perhaps more difficult to comprehend.

I recently took a trip to the North of England. On the way back we stopped at some services. At the pizza place near the entrance, a large sign declared the restaurant “card only.” Further in, a fast-food outlet was refusing to let customers pay with cash. Hungry travellers had to wait in line before struggling to use the self-service touchscreens – which only accept cards.

Then a trip to a local supermarket. All the self-service tills are now card only. To pay with cash you have to queue up to use a staffed till. Only one was open at the time of my visit.

It’s obvious what they’re up to. They’re trying to “nudge” people to abandon physical cash. If you don’t use a card, you’ll have to queue for ages or face the inconvenience of going elsewhere.

Perhaps the retailers in question would argue that banning cash is good for business, allowing them to cut costs and pass on those savings to their customers. Yet cash-handling costs are a tiny, trivial percentage of turnover, and often compare favourably to the transaction charges associated with card payments.

Moreover, it’s hardly good business to annoy a significant percentage of customers with long delays and poor service.

In this context, it speaks volumes that the very same big retailers relentlessly promote certain agendas in their advertising, whether cultural transformation or radical environmentalism. Undoubtedly, this also alienates many of their potential customers. So, why do they do it?

The ugly truth is that Western economies are a million miles from a free market. We actually have a predominantly crony-capitalist system. For supermarket executives and other business bosses, it’s more important to gain favour with the powerful than offer a good service to their customers.

In the current system of rigged markets, company profits – and career success – depend more on special favours from government, the manipulation of state regulation, and support from financial institutions, than competing successfully by satisfying consumers’ wants. Indeed, this economic model actually functions by restricting competition, especially from small, independent firms.

As well as the carrot, there’s also a stick. A business that seriously resisted establishment agendas would face persecution from state bureaucracies. The regulations and tax rules would suddenly be applied very strictly. It might also be smeared by the controlled media and “state assets” posing as journalists, its reputation left in tatters. Banks and investment funds would threaten to pull out their money.  

The next time you see a company behaving bizarrely, angering its customers, and promoting some weird or disturbing agenda, remember who’s really pulling the puppet strings.

Richard Wellings

Image: Shutterstock

Filed under hyperinflation, political economy Tagged with ,

Why the current economic crisis is far more serious than 1970s stagflation

July 12, 2022 1 Comment

The risk of economic collapse is growing by the day. High rates of inflation – in some countries already approaching hyperinflation – are quickly destroying savings, pension pots, and the purchasing power of wages.

My recent report, Hyperinflation Survival Strategies, describes various ways people can try to protect themselves from soaring prices. But many people, in the West at least, are complacent. They think a major inflationary crisis could never happen here. This article therefore sets out some of the reasons why inflation could explode.

Once the rate of price increases hits a certain threshold, there may be little governments can do to stop them rising further. The problem is loss of confidence in the currency. If pounds, dollars or euros buy less and less, then what is the point of holding on to them?

Faced with the rapid erosion of their savings, people are likely to respond by hoarding goods. Durable items will tend to retain their value far better than cash in the bank. But this “flight to real goods” increases demand, creates shortages – perhaps even panic buying – and tends to push up many prices even further.

To make matters worse, high inflation in itself tends to have a negative effect on supplies. It makes it more difficult for businesses to plan ahead. It disrupts trade and investment.

While panic buying and price hikes send a signal to increase production, this often takes months or years to come to fruition. It may require the creation of additional capacity – recruiting and training new workers, purchasing machinery etc. Entrepreneurs will also understand that the spike in demand is likely to be temporary, and could relatively soon be followed by a slump. So, investing in new capacity could be a big mistake.

A key question is under what conditions or at what point panic buying, or a perhaps more orderly “flight to real goods,” will occur.

In 1970s, for example, the official inflation rate peaked at around 25% in the UK. For much of the decade it was in double figures. Bad as things were, the economy did not spiral towards even higher rates or hyperinflation.

Yet there are a series of disturbing differences between the current situation and the 1970s, suggesting the risks of inflation taking off could now be far greater:

  • Interest rates on savings were typically much higher in the 70s than they are today, albeit still negative in real terms for much of the decade – and negative by a large margin during the short-lived inflationary spike in 1975. By contrast, interest rates across most of the West have been close to zero since the financial crisis that began in 2006. If a big gap persists between the inflation rate and interest rates, then this massively increases the incentives for savers to implement a “flight to real goods” strategy.
  • Underlying growth appears to be far lower than during the 1970s, at least in the major Western economies. In many countries, real GDP per capita in 2022 is little different to the levels of the early 2000s. By contrast, despite the fluctuations, growth was robust during the 1970s, averaging roughly 2.5% per annum in the UK, for example.
  • Government debt is now much higher. It has now reached the equivalent of c.100% of GDP in the UK (and 125% in the US), compared with around 50% back then. Worse still, off-balance-sheet liabilities such as public-sector pensions have ballooned, while sluggish growth negatively affects tax revenues, increasing the temptation to resort to money-printing to fund state spending.
  • The demographic situation is far less favourable today. An ageing population puts upward pressure on public spending – for pensions, social care, health, and so on – while also tending to reduce the number of net contributors to the tax system. The average age of active voters has also increased, making it politically difficult to cut expenditure on the elderly.
  • Society has changed in other ways since the 1970s, and arguably in a negative direction in some respects. There are big social divisions and a high degree of polarisation. Unlike older generations, much of the population has never experienced real hardship. The welfare state has encouraged short-termism and dependency on the government, so most households are likely to be ill prepared for a serious economic crisis in which preparedness, self-help and resilience are likely to be major advantages.
  • A high proportion of the population is now heavily reliant on government handouts, or works for the government or companies that depend on government contracts or favours. By contrast, those with significant cash savings are a minority. Moreover, if economic problems lead to social unrest, this is likely to be concentrated in groups with few savings and heavy dependence on the welfare state. This means there would be strong political incentives for governments to steal from savers via inflation rather than cutting spending.
  • The West’s geopolitical dominance in the 1970s enabled governments to rig markets to favour Western big business and exploit natural resource rents from the bloc’s neo-colonies. The petrodollar system is one example of how this worked in practice. But Western geopolitical power is now declining rapidly, lagging but following a diminishing relative economic weight. At a certain tipping point, the leaders of the neo-colonies are likely to seek either genuine independence or form new protection rackets with rising powers. This process is likely to speed up the West’s relative decline and intensify its economic problems.
  • Alongside waning hard power, Western elites are also losing control of the narratives fed to their populations by the media. Yes, censorship has been ramped up, but the rise of the internet means that a significant share of the population now sees through the propaganda and disinformation spread by establishment media organisations. In turn, it’s likely that more people are awake to the real causes of soaring inflation and will more easily learn how to prepare for the consequences, spreading this knowledge to their colleagues, friends and family. This was unlikely to be the case in the 1970s, when deep state-controlled media held almost complete control over the economic discourse.  
  • Finally, there are elements within the Western elite who would like to bring about a “monetary reset.” There are several aspects to the plans, which include imposing a cashless society in which every transaction is monitored, and the introduction of programmable central bank digital currencies (which potentially could only be spent on state-approved goods and services). The abolition of national currencies is another key element of this agenda, with the euro acting as a testbed for and stepping stone towards a “one world currency” that would be used across the West, its vassals, and perhaps beyond. But achieving this goal would require overcoming public opposition to a major assault on national sovereignty. A severe economic collapse could be used to manufacture consent for monetary reform, with the new system promoted as the only solution. Globalist factions within the transnational elite might therefore welcome or even encourage a hyperinflationary crisis as a means to this end.

The preceding analysis does not of course mean that very high or even hyperinflation is inevitable. A sensible approach is to view the risks as significant enough to make some basic preparations worthwhile.

Perhaps our “independent” central banks will take the difficult steps needed to get inflation rates down – even if the resulting slowdown creates widespread unrest and severe problems for the political elite, together with big losses for their cronies in the financial sector. Maybe our politicians will turn over a new leaf and implement a radical programme of deregulation and tax simplification to encourage wealth creation and growth. Perhaps they will also defy the special interests and welfare recipients by cutting spending, reducing off-balance-sheet liabilities, and getting government debt back down to sustainable levels. But how much of this is plausible given the short-term incentives facing our leaders, their tenuous grasp of economics, and their appalling track record?

Richard Wellings

Image: Shutterstock

Filed under hyperinflation Tagged with , , , ,