I like simple words and ideas. If you ask me what’s wrong with the world, I’ll tell you it’s greed. If you ask me why the whole world has gone mad, I’ll tell you it’s the greedy people behind the crooked financial system behind the fake economy.
Any financial system and economy depends on two things…
- Borrowing and lending (between the Haves and the Have Nots)
- Production of real goods from real things and real labor
Now if you’ve been following me, then you know that dollars used to be IOUs for real gold and silver, which took real energy and labor to extract from the ground. That’s why the gold standard worked; it allowed the exchange of labor for labor within a shared “trust” among the people. People trusted that the officials who managed the paper IOUs were telling the truth and keeping the dollar-gold ratio in check. The U.S. became an empire not because it was the nicest guy, but because it had the most gold and was laboring the greatest to produce real goods for real wars that were taking place in Europe. Our dollar became the world reserve currency because the world trusted us to responsibly manage the gold reserves against it.
So what went wrong? The same thing that always goes wrong—man’s thirst for wealth and power. Plain and simple, our politicians wanted more money than they were willing to do work. Actually I should use the word “currency” instead of money. Dollars used to be IOUs for gold and silver, which is real money that came from the real labor it took to extract from the ground. Our politicians cheated and lied. They broke their contract with the world about keeping the ratio of dollars-to-gold reserves at $35 to one ounce of gold and didn’t tell anyone. But world leaders found out, like France, and these nations stopped TRUSTING the U.S. government with their wealth. They started giving us back their green paper claims in exchange for physical gold.
Problem was the U.S. had already printed and used many more dollars than they had gold reserves. Oops! “How can we save ourselves now?” the politicians asked each other. “We’ll just terminate the Bretton Woods Agreement from 1944. The dollar is no longer as good as gold or exchangeable for gold. Who needs gold anyway?” So they did a switcheroo in 1971. In the “labor for labor” equation, they swapped out one side for credit. From that point forward we had “labor for credit” and “credit for labor.” The dollar was now backed by the faith and “credit” of the U.S. government, and we were bamboozled into believing that credit was an asset, not a liability. But credit is only an asset within the confines of trust. And what had just happened to trust? These politicians weren’t thinking about us, our children, or the consequences of their greed and thirst for power. They didn’t think that “credit” part would grow and the “labor” part would shrink and this would have all kinds of ill effects on society.
If you go to the bank tomorrow and try to get a loan, and you want to collateralize that loan with your smiling face and your other credit cards that are maxed out, what do you think they’ll say to you? Maybe something like “Get outta here, idiot!” But if you go into that bank with a military that you’ve financed with your credit cards, and you point weapons at their heads, what do you think they’ll do? Give you the loan? Do you get my drift? Something changed in 1971. Instead of trading labor for labor, we started gaming the system for credit. Dr. Judd W. Patton put it well, we had come “to understand that the U.S. dollar is not based on the principle of In God We Trust, but is premised on In Government We Trust.”
Dollars became IOUs for the U.S. government’s credit.
Treasuries grew as the market to exchange these IOUs.
Governments gave banks more special powers to lend out IOUs they invented out of thin air (fractional reserve banking).
Stocks became mega-leveraged digital claims on a limited supply of real assets. In many cases, stock prices were based on zero assets, but rather “dreams” of future assets. They called this speculation.
Stocks became “assets” against which you could borrow more credit to buy more stocks. It is common practice now for corporations to buy their own stock with borrowed money. This makes the prices go up and allows them to borrow more for their cushy rich lives. They just borrow against their stock forever, and it works (until it doesn’t).
Corporations moved their factories overseas to inflate their profits by trading the perceived value of U.S. government credit for low cost labor. This resulted in millions of lost jobs for Americans.
Bitcoin and thousands of other crypto currencies became tokens in this casino. The logic is that if the IOUs for government credit fails, then people will want to turn their dollars into digital codes to hedge value. It’s just another form of gaming. The equation is “something for nothing” instead of “credit for labor.”
But here’s the thing that most people have forgotten. We need real goods made from real things in order to have a real economy and survive. And our gaming has pushed all production of real things to the East and it has pushed the cost of those real things down (with the exception of real estate) in paper and digital currency. Have you noticed that the most valuable companies by market cap either don’t produce anything real or don’t make money anymore by producing anything real? Tesla makes money selling regulatory credits. Notice the word “credit” again. 🙂 Credit is investing in someone else’s liability. That’s all it is, and it depends on trust.
So when things fall apart, the game changes and “credit” collapses. In those days, it won’t be about who has the most IOUs and tokens anymore. It’ll be about who has the real things, the things that took real labor to extract and create, the things people want and need to survive. Real things will have real value and digits will not. Why? There are two reasons. Because a ton of people will be caught with leveraged loans they will have to pay back. They’ll have a choice: sell digital assets to get cash to pay the loan or lose the collateral backing the loan. The second reason is psychology will change. Suddenly you won’t need two houses, you’ll need food and water, clothing and appliances, and you’ll need to help your family and friends. You won’t need a big house that you can’t rent or sell that suddenly has much higher taxes levied against it.
What’s happening now and what will happen with the reset is a con. The bankers will give you credit in exchange for your goods and services that are real. The paper and credit will then lose value, and the bankers will take your real stuff. Do you remember the story of the three little pigs? What happened to the straw house? It wasn’t built with weather-proof material, and the wolf blew it down. Well, politicians and central bankers are wolves, and they’re going to blow a lot of houses down, my friend. You won’t know when, but it’ll all be gone in the blink of an eye. Remember this? “Trump administration considers tax incentive for more Americans to buy stocks,” report says on February 14, 2020. But on August 2, 2016, he said he got out of the stock market. Just 4.5 years earlier he warned of a “very scary” scenario for investors. Yes, he was and still is a politician.
While the elites and bankers buy up all the real things that took real labor to extract and produce, what did you do? You did exactly what they wanted you to do…you trusted them while you chased their IOUs and tokens and stocks as they quietly sold theirs, ahead of the crash, so they could buy you out when you are broken. This isn’t brain surgery. When the music stops and the gaming ends, what will you have left? Don’t believe that you are safe in a system where there are 1,000,000,000,000,000 claims more than there are real goods to be had. That’s why I’m not fooled by Bitcoin or any crypto currencies. They may work now in this system of dreams, or they may not, but they definitely won’t survive in the reality that falls apart. And I believe we are on the verge of that reality falling apart. You can trade labor for labor, goods for goods, but you cannot create real wealth out of thin air. You cannot create something out of nothing, unless you are God.
You can only game “to get” if you are willing to bag someone else. Sadly, we don’t think of others when we are investing anymore. We don’t think about what is good or right for other people and society. We only think of ourselves, and what’s going up in this credit-delusional world, and that is precisely why the system will collapse. So ask yourself one question. When things fall apart, what will you be holding? One bitcoin or over 1000 ounces of real physical silver? $100,000 or 20 acres of land? Don’t think things will ever fall apart? You’re kidding yourself. Jesus was right when he said, “Render therefore unto Caesar the things which are Caesar’s; and unto God the things that are God’s.” There’s a reason why Genesis 2:12 says the gold of the land is good. Your government is not God. Your government doesn’t have a right to play God. It’s always the same old story; God is God and the world is going to find out soon.