Welcome to Monetary “Darnation”

17 Mar

RockHardPlace1Most economists agree that America’s hope of future prosperity has been compromised by America’s debt. The currency we spend paying the principal or even just the interest on the existing National Debt is currency that we can’t spend investing in new factories or technologies that would increase our productivity and therefore our prosperity.

So long as the National Debt remains or, worse, grows—America will continue to slide towards austerity rather than prosperity.

But, it’s not just America that’s overly indebted. The world is awash in debt. That debt is reducing global productivity and prosperity.

If America—and the world—would become prosperous again, something’s got to be done about paying or otherwise eliminating our excessive National (and global) Debt. (“It’s Not Just Deutshe Bank . . . The Whole Financial Sector is Dying”) reports that,

These are great times for financial assets—and, by implication, for finance companies that make and sell them, right?

Alas, no! Just the opposite. Each part of the FIRE (Finance, Insurance, Real Estate) economy is imploding as “modern” finance hits the wall.

Interest rates have fallen for three decades. . . . Stock prices are at record levels . . . . Real estate is revisiting its recent bubble.

In this paper paradise, it’s no surprise that banks and their cousins have grown fat, happy and arrogant.”

And just what is the essence of this “paper paradise”? It’s debt.

All paper financial instruments are evidence of debt. In financial matters, when we say “paper,” we mean “debt”. We strolled into 30 years of globalism by issuing pure, fiat debt-based currencies and mountains of paper debt instruments.

How can we escape our “paper paradise”?

We must somehow eliminate our debt.

However, with the above trends now ending, it’s also no surprise that business models premised on their continuance are failing. Everyone by now knows the Deutsche Bank story of bloated costs, horrendous derivatives exposure and debilitating criminal penalties. But lots of other finance companies are staring into the same abyss.”

The Gold-Eagle article then lists a number of prominent banks, financial institutions, and pension funds that are all under dangerous levels of financial stress (debt).

The article continues:

If every part of the financial sector hits the wall simultaneously, the resulting crisis will overwhelm the ability of governments and central banks to keep the game going. Their last, desperate policy experiment will involve coordinated currency devaluations to make debts less onerous.”

First, I doubt that “every part of the financial sector” must “hit the wall simultaneously” before we see an overwhelming crisis. Lehman Brothers went bankrupt all by itself in A.D. 2008 and nearly triggered a U.S. and even global financial collapse. Back then, it wasn’t necessary for “every part of the financial sector hit the wall simultaneously” to cause a global financial collapse. It shouldn’t be necessary today, or in the future, either. Once again, just one or two major institutions going bankrupt could be enough to collapse the U.S. and global house of cards.

Second, whose debts will be made “less onerous”? Governments’? Taxpayers’? World’s? Almost certainly, the only debts that government regards as “onerous” and in need of dramatic reduction will its own and/or the “sovereign debts” of all of the world’s governments.

Third, how, pray tell, can there be a “coordinated currency devaluation” between all fiat currencies (and therefore a “coordinated” debt reduction) given that the fiat currency values are all measured only in relation to other fiat currencies? In our brave, new world of debt-based currencies, a fiat dollar is worth X-number of euros which are worth Y-number of British pounds that are worth Z-number of dollars—but what the helk is any one of them actually “worth”?

There can be no real answer insofar as the value of each fiat currency is defined only by its relationship to other fiat currencies. There will be no “coordinated currency devaluations” whereby all currencies are proportionately devalued and all debts denominated in those currencies are also proportionately reduced.

The most the world can hope for is that most fiat currencies will be inflated/devalued while only one (or a very few) are deflated. For most fiat currencies to successfully inflate and thereby (temporarily) stimulate their national economies, at least one national debtor (the U.S. government) must be willing to risk being destroyed by deflation.

Why? Because the fiat dollar is the primary world reserve currency. The world reserve currency is the closest thing we have to a “fixed value”. It’s no substitute for the objective reality of gold, but it’s the closest substitute we have.

As I’ve written previously, as the primary world reserve currency, the fiat dollar has a teeter-totter relationship to the remainder of the world’s fiat currencies. When the other fiat currencies go down in value due to inflation, the relative value of the fiat dollar must suffer a correlative deflation and go up. When the dollar inflates, the relative value of the other fiat currencies must deflate.

As everyone knows, the governments and central banks of Japan, the EU, China and most of the world are seeking to cause their own currencies to inflate in order to (temporarily) stimulate their economies. As everyone knows, even the government and Federal Reserve of the United States are determined to cause an annual inflation rate of at least 2% for the fiat dollar.

Everyone seems to want inflation, but everyone can’t have inflation. Because fiat currencies have no objective or intrinsic value, the values of all fiat currencies are ultimately defined in a constantly-shifting relation to other fiat currencies. At least one nation must suffer significant deflation for all the other nations to achieve a “coordinated” inflation.

The problem is that whichever currency suffers deflation, the value (purchasing power) of its government’s national debt will rise. If that nation’s government is already overly-indebted, additional deflation will increase the real size of that debt and make it that much less “payable”. Subjected to significant deflation, an overly-indebted government (like that of the U.S.) will be less able to repay its national debt and could be forced to openly admit that it’s insolvent and bankrupt. An admittedly bankrupt national government could cease to exist. The legal and political repercussions could be catastrophic.

As primary world reserve currency, the fiat dollar is the natural candidate to suffer deflation while the rest of the world chases inflation. Nevertheless, will the U.S. government sacrifice itself to deflation and bankruptcy in order to allow enough inflation in other fiat currencies to stimulate the global economy?

Of course not.

Without the U.S. government’s voluntary agreement to suffer deflation, there can’t be a “coordinated currency devaluation” for the rest of the world’s fiat currencies. All we can expect is an uncoordinated chaos.

Fourth, while deflation destroys debtors, inflation destroys fiat currencies. Even if there were some way to cause or allow all of the world’s currencies to inflate in some “coordinated” manner, the end result would be the “coordinated” destruction of all fiat currencies.

Look at the fiat dollar. In A.D. 1971, President Nixon stopped redeeming foreign-held dollars with gold. By doing so, Nixon turned the paper dollar into a pure fiat currency. Since then, the dollar has lost over 95% of its purchasing power. That’s a trend. That’s evidence of a 45-year long, governmental policy of inflation.

Q: But what happens if that trend continues and the dollar loses 96%, 97%, 98%, 99% and finally, 99.9% of its purchasing power to inflation?

A: At some point, the public will lose confidence in the fiat dollar. Without that confidence, the fiat dollar dies.

Thus, we’re faced with a national and global financial situation wherein: 1) widespread inflation will inevitably destroy all fiat currencies; and 2) the correlative, teeter-totter deflation will quite probably bankrupt the U.S. government. Heads, we lose; tails, we lose.

I see no third option other than trying to “kick the can down the road” and somehow maintain the current economy at exactly the current inflation/deflation rate. But that kind of maintenance is impossible except on a temporary basis.

Sooner or later we slide into significant inflation (which destroys the fiat dollar) or significant deflation (which bankrupts the federal government).

Where’s the happy ending in that dilemma?

Fifth—while the overly-indebted U.S. government claims to want inflation to stimulate the U.S. economy, its real motive is to repudiate much of the National Debt. But, how can the U.S. government repudiate any of the National Debt without also destroying a correlative amount of paper wealth tied up in U.S. bonds?

The only ways the National Debts can be reduced are by 1) express repudiation (“Sorry, guys, we can’t pay our bills.”) or, 2) stealthy hyperinflation. If the national debt were subjected to 90% overt repudiation or a more secretive 90% hyperinflation, those who had, say, a $100,000 U.S. bond might be able to sell it for only, say, $10,000 in purchasing power. 90% of their paper wealth stored in U.S. bonds would be destroyed at the same time that 90% of the National Debt was repudiated by express declaration, inflation, or both.

Could the U.S. (or even global) economy survive the destruction of paper wealth (U.S. bonds) equal to 90% (or even 50%) of the official National Debt of $20 trillion?

I don’t see how.

Thus, we’re darned if we do and darned if we don’t.

In short, by embracing fiat currency, we’ve condemned America and the world to monetary “darnation”.

Our debt-based monetary and economic systems can’t fall in a “coordinated” and controlled manner into a “soft landing”. When the system finally “snaps,” all helk will break lose.

The only escape from our debt-based, monetary madness will be through economic catastrophe. One day the system will be flying along and seemingly stable. The next day, or week, or month, the system will fail so catastrophically, that it will be gone and cease to exist. That calamity may occur much like that prophesied in Revelation 18:17: “For in one hour so great riches is come to nought. . . .”

How could truly “great riches” be brought to “nought” in just one hour unless those riches were stored in the highly-fragile forms of paper or digital fiat currencies?

Q: Why can this system only end in catastrophic failure?

A: Because the National Debt:

1) Can’t ever be paid in full—and probably can’t be paid by more than 10% to 20%; and,

2) Can’t be canceled without repudiating the correlative paper assets. Destroy the debt and you destroy an equal amount of paper assets that are currently held as assets in bank vaults and pension funds. Destroy those paper assets, and the banks, pension funds and financial system will collapse.

If the debt can’t be paid and can’t be repudiated (without destroying an equal amount of paper wealth)—but must be substantially reduced before the nation can again become prosperous—what can possibly be done with the debt?

Can government trick Americans into accepting both the repudiation of, say, $10 trillion (half) of the “official” National Debt and also the simultaneous destruction of $10 trillion in paper wealth stored in the form of U.S. Bonds in banks and pension funds?

Not a chance.

In the internet age, there are no secrets. Government can’t openly destroy $10 trillion in paper wealth by express repudiation or by stealthy hyperinflation of the National Debt. We’d know that government was destroying our paper wealth (U.S. bonds) and condemn them for it.

Therefore, it seems certain that there’s no way out of our debt-based, monetary madness besides economic chaos and catastrophe.

Debt today; gone tomorrow.

The only thing we don’t know is when that catastrophic “tomorrow” will arrive.

We’ll see signs of coming collapse. In fact, we already see lots of signs—they’re called “fundamentals”. But, in the end, the economy will snap like a dry stick. Suddenly. No precise warning. Not even hours or days in advance. Snap!—and it’s rubble.

Casey Research recently described the coming calamity:

This will be a disaster if you work on Wall Street, rely on a public sector pension and/or own a bunch of bank stocks.

It will be hard, but survivable, if your wealth is in real rather than financial [paper] assets.

Gold, as always, is the safe haven.”

Just about everyone who considers economics agrees that the burden of trying to repay or even service our excessive National Debt will prevent us from making the kinds of investments needed to become more productive and more prosperous. Assuming that our government really wants this country to become more prosperous, the debt must be repaid or otherwise repudiated before we can invest in our own future prosperity.

I’ve argued for five years that the National Debt is too great to ever be repaid in full. I have consistently argued that no more that 10% to 20% of the National Debt will ever be repaid.

I’ve seen nothing in five years to dissuade me from those arguments.

Over the past year, I’ve realized and argued that the National Debt can’t be significantly repudiated without destroying a correlative amount of paper wealth (U.S. bonds) and collapsing the U.S. and global economies.

I’ve seen nothing to suggest that this second insight and argument are fundamentally false.

If it’s true that:

1) our government wants us to become prosperous;

2) we can’t become prosperous unless the National Debt is somehow eliminated;

3) the National Debt can’t be paid in full or even in majority; and,

4) the National Debt can’t be repudiated without destroying a correlative sum of paper wealth—

Then we’re trapped between the rock (the debt can’t be paid) and the hard place (the debt can’t be repudiated) in a dilemma that can’t be escaped without pain.

If the National Debt must be eliminated or substantially reduced to regain our prosperity, what can government do other than cause the financial equivalent to 9/11?

The only way to get out from under the monstrous U.S. National Debt is to “bomb it” (figuratively speaking) in a false flag attack that can be blamed on some foreign country, institution or natural disaster other than the U.S. government.

The only way for individual Americans to survive that “bombing” will be to have their wealth saved and stored in a form other than fiat dollars, paper bonds, or other digital debt-instruments.

Got gold?


Posted by on March 17, 2017 in Uncategorized


19 responses to “Welcome to Monetary “Darnation”

  1. wholy1

    March 17, 2017 at 5:55 PM

    The PTB’s (Psychopaths That Bugger) “final solution” remains the same – [big-ass] W-A-R. For the “awake”, it’s an inland, RURAL, “System D” alternative Real “Life”. Eventually all those parasitical gov agents and “money-changers” contributing NOTHING to REAL productive enterprise will see those “pensions and paper birds in the [out-of-reach] illusory bush” go . . . POOF! Best be get’n S-I-M-P-L-I-F-E-D – [UNencumbered,RURAL, arable] GROUNDED, GATHERED/GROUPED, GUNNED. For all those “urbers/citYzens”, borrowing time will eventually be worse than all the currency “borrowing”.

  2. Lyndon

    March 17, 2017 at 11:12 PM

    Problem with gold right now is you’ll end up selling it for less than you pay for it unless you have a commercial license to trade it.

    Why not a “basket” of metals, including gold and silver, as a physical currency?

  3. James Fletcher

    March 18, 2017 at 1:42 PM

    The US mint still strikes coins. Strike 1 coin for however many trillion we owe. Have the value set by the Congress, roll it down the street to the federal Reserve bank and pay them.In full then close them down and take a flame thrower to their temples of Satan.

  4. dog-move

    March 27, 2017 at 10:10 AM

    If the magicians can control what the masses believed on the day of 911, as huge as it was, they can make anyone believe what’s happening in the global debt market as normal if not a good thing.
    I tend to think despite all those calling for a collapse, it isn’t going to happen the way the masses think.
    Most market participants in both the equity and debt markets will hold most of the way down. This mega-drop won’t be a collapse. The drop will be a controlled stair step move lower, as most moves in any market are controlled in the direction they go. As the markets drop the markets captives will be sold the concept of “hope”, the slope of hope. The grip on peoples minds is powerful!
    Being long S & G will be very good, but, if your in the right thing(s) in this environment you can make an above average gain on your capital. Heck it may be wise to deploy as much leverage as you can off this bottom. Paper to compliment your real stuff. Let’s face it derivatives are here to stay. So be in the right ones and use the U.S Person alias for the ride.
    Question: if one uses FRN’s to purchase silver and gold is there a divided ownership in that transaction?
    Sorry, I must comment and inquire. this blog is alive.

    • Adask

      March 27, 2017 at 2:39 PM

      I don’t absolutely know if all silver and all gold purchased with FRNs would divide the legal and equitable titles. I think that if you’re buying gold and silver as a commodity (bars or privately-minted coins), the titles are almost certainly divided. However, if you bought gold or silver coins minted by the U.S. government with FRNs, I think the coins (lawful money) would still include both legal and equitable title to the purchaser. Even if I’m wrong, if the argument was made that I owned both titles to the gold or silver “money,” I doubt that the government would be eager to contest that argument in a public court. Even if I was technically wrong, I don’t think the government would want to prove my error in court because, by doing so, they’d let a very big cat out of the bag.

  5. palani

    March 27, 2017 at 10:46 AM

    “if one uses FRN’s to purchase silver and gold is there a divided ownership in that transaction”

    Nope. It all belongs to the Federal Reserve.

    Mercantilism is the system put in place between use and usufruct. Both are trust terms. Use means you might have the use of the item but cannot enjoy it. Enjoyment and use combined are in the usufructor. Enjoyment means a right to profit [ remember the right to life, liberty and the pursuit of happiness? The pursuit is the enjoyment.]

    So if you ‘purchase’ a gold or silver coin you do so as a usufructor. Enjoy your purchase but the item belongs to he who issued you the credit instrument.

  6. Lyndon

    March 28, 2017 at 6:29 AM

    Is the title split?

    That depends on how you acquired the gold or silver and who possesses it. If you acquired it through your person, then you have PERSONAL OWNERSHIP. And you all know an “owner” is bound by obligations. So you’ll get hooked into that old split-title trick if you do. But, it you acquired the gold and silver as a man, and hold it as a man, without any titles, then the gold or silver is yours exclusively. Private non-recorded, non-registered purchases from man to man are outside any state.

    Our law is, the law that is common to all man, that one man cannot take the property of another man by force. We call that robbery in his presence; we call it stealing when he is not present. As kids we knew that you could not go up to another kid and take his bicycle from him. We knew that was the law. Nothing has changed since then, the law still stands. And we all enforce it.

    So, acquiring gold or silver by USING a STATE PERSON of course gets YOU into the STATE title binary. Big deal, just don’t use a registered person and no office or officer will know of your possessions.

  7. palani

    March 28, 2017 at 7:16 AM

    “don’t use a registered person and no office or officer will know of your possessions”

    Veritas nihil veretur nisi abscondi. Truth fears nothing but concealment.

    Aliud est celare, aliud tacere. To conceal is one thing, to be silent another.

    Ubi quid generaliter conceditur, in est haec exceptio, si non aliquid sit
    contra jus fasque. Where a thing is concealed generally, this exception
    arises, that there shall be nothing contrary to law and right.

    To acquire possession of a property, two things are requisite. 1. The intention of possessing as owner. 2. The corporeal possession of the thing.

    • Lyndon

      March 28, 2017 at 7:36 AM


      The law of man is not written in latin maxims. That is almost all “legal” writings. The law of man is known, or ought to be known, by all. The law is simple enough that a child can know it.

      There is no “concealment” in not using the PUBLIC STATE PERSON. There is no law, and could never be a law, that a man must tell another man to call him by a title. A man is variable; a man may call himself what he wants whenever he wants and change his calling as often as he wants. All of man are created equally and no man may bind another man against his will. All “names” are alias’. There is no misrepresentation when this is fully comprehended.

      An “owner” is not a proprietor. Big, big difference. An “owner” has the onus, the burden, of care for another. That is is etymological root of the word. When a man has his property, exclusively to him, he is a proprietor not an owner.

      The common law applies mostly to man. Legal applies to persons. When the two are mixed the mixer is going to get burned.

      • palani

        March 28, 2017 at 9:23 AM

        “law of man is not written in latin maxims”

        MAXIM. An established principle or proposition. A principle of law
        universally admitted, as being just and consonant With reason.
        2. Maxims in law are somewhat like axioms in geometry. 1 Bl. Com. 68.
        They are principles and authorities, and part of the general customs or
        common law of the land; and are of the same strength as acts of parliament,
        when the judges have determined what is a maxim; which belongs to the judges
        and not the jury. Terms do Ley; Doct. & Stud. Dial. 1, c. 8. Maxims of the
        law are holden for law, and all other cases that may be applied to them
        shall be taken for granted. 1 Inst. 11. 67; 4 Rep. See 1 Com. c. 68; Plowd.
        27, b.
        3. The application of the maxim to the case before the court, is
        generally the only difficulty. The true method of making the application is
        to ascertain bow the maxim arose, and to consider whether the case to which
        it is applied is of the same character, or whether it is an exception to an
        apparently general rule.
        4. The alterations of any of the maxims of the common law are

        “The common law applies mostly to man. Legal applies to persons. ”

        A person (from Hobbes) is 1) an action 2) a word or 3) representation. What do you suppose holding up a gold coin and pronouncing “this is mine” produces? A title? An action? A person? And did you not suggest that legal applies to persons?

        The challenge is to go through life without creating a person by any word, action or agent. If you can do this then legal will never apply to you. Try it for a day. It is harder than you might have thought possible. Come back this same time tomorrow and tell us all about the number of persons you have personally created.

  8. Lyndon

    March 28, 2017 at 10:37 AM


    Your response is all over the place. You have missed, or are ignoring, the basic premise of what i initially wrote. And, your comment “.Come back this same time tomorrow and tell us all…” is amusing: are you writing for everyone?

    A man is not creating a person when he is simply a man. A man doesn’t need a title to defend what is his. If a man tries to take a shirt off another man’s back the victim doesn’t even need a name to defend it. The shirt is his because he’s wearing it. Done. A man makes a person when he makes a sound for something other than himself. That’s what a person is. It is something other than himself. But this doesn’t even matter, because so long as a man does not use the registered STATE PERSON the statutes of the STATE are not applicable -that is self-evident. A man could make a thousand persons outside of the STATE and the statutes would not be applicable. Don’t be a STATE actor and you won’t be in the STATE. The substance of what was asked above is how to keep possession of gold or silver without the STATE actors trying to take it away from a man. This is actually quite easy; i don’t just write this; i live this.

    Now you come back to i with more distracting legal jargon about a matter that should be kept as clear as a bell. .

  9. Lyndon

    March 28, 2017 at 10:51 PM

    “I have a policy to not argue.”

    You already did offer reasons, attempt to make clear; that is, to argue.

    • palani

      March 29, 2017 at 7:22 AM

      “You already did offer reasons, attempt to make clear; that is, to argue.”

      Talis non est eadem, nam nullum simile est idem. What is like is not the
      same, for nothing similar is the same.

      • Lyndon

        March 29, 2017 at 9:38 AM

        Talis non est eadem, nam nullum simile est idem. What is like is not the
        same, for nothing similar is the same.

        You’re a funny guy Palani. I always did like reading your posts here. Cheers.

  10. dog-move

    March 31, 2017 at 2:00 PM

    usufruct, a right to use and enjoy the fruits of anothers property for a period without damaging or diminishing it, although the property may naturally deteriorate over time. In Roman law, the usufruct was considerede a personal servatude, giving a “real” right. In modern civil law, the owner of the usufruct is similar to a life tenant, the owner of the thing burdened is the naked owner. Black’s Law Dictionary 8th Edition.
    The ALL CAPS NAME is property of the U.S. federal Corp.,the Crown, Vatican, you just pay tribute to use it. When I Drive, work and just about everything else in order to survive, always at arm’s length.

    New truths for my Palani file, goes well with my Adask file, Thanks guys!


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