Part VII A. The Strictly Financial Case for bitcoin.
"You can’t change what you refuse to confront.” Unknown
"They are saving you for dessert" David Rogers Webb
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Q !!Hs1Jq13jV6 11/08/2022 23:01:48 ID: 1acf01 8kun/qresearch: 17734020
Endless lies.
Endless wars.
Endless inflation.
Endless 'printing'.
Endless oppression.
Endless subjugation.
Endless surveillance.
Who will put an end to the endless?
Taking control.
Q
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Q !!Hs1Jq13jV6 11/11/2022 08:45:15 ID: 82a350 8kun/qresearch: 17751801
Who are the Silent Thieves?
Why are they manipulating you?
How are they stealing your wealth?
Bubble.
Crash.
Steal.
Lie.
Repeat.
What is inflation?
Monetary manipulation.
Taxation without representation.
PUT AN END TO THE ENDLESS.
1913.
Q
Are banks safe?
In March of 2023, the fed introduced The Bank Term Funding Program (BTFP), for one year, banks can “deposit” their underwater loans at the fed and receive “face value” (what the loans were worth when they created them). After a year from when they put them in, they have to pay that money back to the fed with interest (Remember no fiat currency is created without interest attached to it, and no fiat currency is created with the interest to pay for it.) If these portfolio’s when marked to market in March of 2023 were underwater, when interest rates were lower than they are today, what are they worth now? What will they be worth when the fed has not lowered interest rates, and hands these portfolios back to the banks? The BTFP is not a saving mechanism, it is a kicking the can down the road mechanism. Even if the fed lowers rates in June of 2024, the fed cannot save them. It can kick the can a little bit further, but cannot save them. Nor does it want to.
Since the banks cannot offer the same yields that the government and the fed is offering, the banks can only keep their heads above water for so long. As their depositors withdraw their money in search of higher yields and the banks do not have enough deposits to cover their fractional reserve requirements (for a full explanation of this see Part V, the Fed’s 3 letter agencies will step in to “save the small banks” by selling their assets at a steep discount to the big banks.
Think about it with the math. Let' say a bank paid $100 million (this is referred to as “face value”) for an on average 15 year portfolio (the loans inside any portfolio mature at different rates cars average 5-7 years for example, houses are usually 30, and commercial loans are 7-10), that is earning 3%, and the fed raises rates to 5.5%. Instead of earning, $3,000,000 annually, that “face value” $100,000,000 portfolio from a new investor needs to earn $5,500,000 annually. In order to determine the “marked to market” value of the banks portfolio of loans you take the yield ($3,000,000) divided by the new rate of return, 5.5% and get $54,545,454.5 as the new “Marked to market” value that the marketplace will buy the asset for in order to get the prevailing yield. That is almost a 50% haircut on what the bank paid for the portfolio. How do they pay back depositors if they do not have the money, or the assets? (This math assumes it is a long term portfolio. The sooner the loans or bonds inside the portfolio mature, the less it gets discounted.)
Unless the fed, lowers rates drastically and quickly before they hand these portfolios from the BTFP back to the banks, they cannot sell the asset to repay depositors, who have already started leaving. Furthermore, lets say the bank, because it had to remain liquid, bought short term bonds with their $100,000,000 loan from the BTFP, and earned $5,500,000 during that year, some of the proceeds have to pay the fed interest on the debt, but if the fed has not lowered rates to the 3% yield that the face value gives them, then they are still drastically underwater, and the pidly $5 million (if that, after they pay interest on debt the fed created out of thin air, in order to kick the can down the road) that they earned in the last year, does NOTHING to fill the hole. At 4% federal funds rate, the loss on that portfolio, is still $25,000,000. At 3.5%, the loss is $14,000,000. Now take that across the whole banking system, which is not in the millions, not in the billions, it is in the trillions. Even if depositors leave their money in banks, the banks will fail if the fed does not DRASTICALLY lower rates and quickly.
Furthermore, the banks have pretty much one place to earn interest on their cash that they got for the "face value" of their portfolio, and that is short term treasuries. As, that cash goes back to the fed, so they can take back their underwater portfolios, that takes liquidity out of the treasury market (more on this later).
And now we have bank earnings for 2023, and the picture isn't pretty. Credit card charge offs - writing off loans on credit cards that people cannot pay because the rate (remember this fluctuates with the rate that the fed sets) is too high, and what used to be the borrowers minimum payment doesn't cover even the new interest on the debt. And the commercial real estate losses continue to worsen. BofA Earnings plunge.
That doesn’t seem so bad, you say? You think that what has happened in your memory and experience will happen again and the government will bail out the banks, and everyone will be fine? Not this time.
As the paper explains, if 100% of uninsured deposits were to leave banks, the losses would be a staggering $5 Trillion dollars. If the government could bail them out, would you want them to? Well, the government realized this risk and did not want to face voter outrage, and outright collapse of the currency, so they minimized the risk to the taxpayer and the dollar, at the cost of the uninsured depositor.
In recent history, when the big banks swallow the little banks, the depositors are able to keep their capital and the bank shareholders, and bond holders lose everything. The big banks get “bailed out” by the government (at the cost to you, the taxpayer). However, this time is different. The government has created what is called a “bail in” (read the linked article to understand the risks), where the uninsured depositors and shareholders are on the hook for the bank losses.
According to the linked article,
"If, as a result of the evaluation, the Secretary and/or the bank’s board of governors believe the bank is a candidate for a bail-in, the board will vote on providing a written recommendation to the Secretary for the FDIC to be appointed receiver of the bank.
Under Dodd-Frank, as receiver, the FDIC would have three to five years to liquidate the bank and:
- Ensure that shareholders and uninsured creditors (depositors) bear the losses of the failed bank (emphasis mine)
- Remove bank management responsible for the failure
- Make payouts to claimants that are at least equal to the amount that would have been received under bankruptcy
- Cover FDIC insurance liability to qualified depositors up to $250,000"
“Bail-ins are a strong political statement,” notes Schulman. “They limit the exposure of taxpayers to the risks of bank failures and simultaneously attempt to limit [the government’s] political fallout that comes with the perception of rescuing fat-cat banks or financiers.”
Are you an uninsured depositor? What will you do if your banks fail during this process? They are all under water, and the government isn’t going to bail them all out this time. This time, the debt will be born BY THE WEALTHY UNINSURED DEPOSITORS and bank shareholders and bond holders. It will decimate the upper and upper middle class, in this country. This works nicely for the banksters and government gangsters as it eliminates people who potentially have or had power through wealth. It could ruin the upper class and upper middle class once and for all.
This is more massive incentive for uninsured depositors to get their money out of banks, and that will eventually lead to a banking collapse. Will you get out before the first bank fails, or will you “bail in” your bank?
The process of raising rates and pushing banks’s assets underwater, ceases the ability of the banks to print their own dollars, because they have less and less currency on deposit and, hence, no currency to lend. In other words, the banks are illiquid (remember that word from our Ponzi scheme definition in previous posts). In the short term, the credit contraction by banks creates a scarcity of dollars, and the dollar goes up in value against other currencies.
Even if banks have dollars, lent to them by the fed’s BTFP, they cannot lend them on longterm loans, because they need to pay them back in one year from when they borrowed them, so they need to keep them liquid. And even if depositors leave their money in banks, the banks will fail if the fed does not DRASTICALLY lower rates and quickly. But the fed has its own rock and hard place, lowering rates will cause inflation to rise. When the BTFP is over, and banks start to fail, bail in’s will happen and uninsured depositors will leave in droves, hastening their demise. Even if they go from smaller banks to bigger banks, they will eventually want to go to bitcoin, if they can.
The process of bank contraction is VERY deflationary for anything that is or could be collateralized with debt (cars, real estate, bonds and the stock market), and this is not a short term thing even if the fed lowers rates. Lack of liquidity, or a "credit crunch" and bank failures all means that banks have less money to lend. Furthermore, historically, when the fed lowers rates, is when markets start to fail, not during the rates rising. The fed is caught between a rock and a hard place of its own making. Does it lower rates to save the banks or does it keep rates high to try to stave off inflation? It cannot do both.
The fed (owned by banksters) wants a CBDC, and they are in the process of collapsing their own system in order to get it. The longer you wait to get out, the more likely you are to LOSE.
What about Brokerages?
Brokerages are leveraged too, with more than just margin.
In the Great Depression, everyone remembers that the stock market fell, but they do not understand the process or remember what really happened. Just as today, the fed had lowered interest rates, leading to the creation of money by banks for real estate and stock market investments, when the fed raised rates, money was destroyed through the process described above.
In 1929, the stock market fell from 326 to 202, people panicked, the banksters, following their playbook, went to the government to bail themselves out, this led to a reflation of the stock market. People bought at 198 thinking they were buying at a discount. This sucked more people in, people leveraged their homes, bought on margin, and utilized banks ability to create money to plow it into the stock market and other investments. Then, on April 17, 1930, the market started to slide.
Margin is a process, where the “investor” borrows 90% of the purchase price of a stock or bond, and puts up 10% of their own money. If the stock or bond goes up in value, the “investor” wins, and everyone is happy. However, if the stock falls 10%, the “investor” is “stopped out” and forced to sell, so that the brokerage does not suffer losses.
People who bought on margin at the highs, were the first forced sellers, but as the market fell, the next tier of margin buyers had to sell, and then the next tier. It slid for years, until it finally ended up at 40.56 in 1932! A nearly 90% collapse. It took a quarter of a century to reach its previous highs. Inflation adjusted, (which is always reported at less than in actuality) it took 62 years for stocks to recover. The homes that had been leveraged to buy stocks, were taken by the banks. Nothing could have been more ingeniously designed to suck everyone in, and decimate wealth of the people, but it transferred that wealth to whom? If you guessed, banksters, you would be correct.
To add insult to injury, the government made it illegal to own gold in 1933, just after the stock market had hit bottom! They confiscated what little wealth anyone lucky enough to have it, had, right after the worst economic collapse in history. Do you really think they will not do that again?
But this time we have the massive population of the Baby Boomers retiring, as these Boomers retire, they expect to live off of their stock portfolios. As Raoul Dal explains in this excellent video, there are not enough people behind them wanting those stocks (which are at historically high valuations). If fewer people want to buy those stocks, supply will be greater than demand and the prices will fall.
So, while banks have long term loans, brokerages have short term, more liquid loans, and the stop losses that they put in place force the borrowers to lose their money, not the brokerage’s money. However, the bond market is bigger. Much bigger. The same margin rules apply for bonds. However, so do the fractional reserve rules (for an explanation of fractional reserve lending see Part V). When people buy bonds and hold them at brokerages, especially liquid ones, the brokerage uses those bonds to do fractional reserve lending and they loan it on margin. If the underlying asset (depositors’ bonds) fall, but not the stock, no one is stopped out, the brokerage has to assume the losses, just like with a bank. They remain liquid through the use of savers money, just like banks. If people move their assets out, or those asset values fall, they have less and less money to make loans to keep markets rising.
Remember, the whole fiat system is a Ponzi scheme. How does a Ponzi scheme always end? It becomes illiquid. Too many people want to take their assets out of the Ponzi scheme, so it collapses. But with fiat currency, the Ponzi can also collapse because the banksters print too much of it i.e. Weimar Germany, and every ancient empire that debased their currency by creating too much of it.
Brokerages, instead of sitting in a relatively safe position, do not stop with margin loans in the risk field. They create riskier and riskier products. These products are what brought down Lehman Brothers, and other brokerages that failed. It is too lengthy to fully explain here, but look up credit default swaps, and derivatives. The current market of currency and credit derivatives is $636 Trillion. In contrast in 2000 it was only $93 Trillion. This a a bomb waiting to go off. The fuse is lit, we just do not know how long the fuse is, but we can guess.
Credit default swaps in the simplest of terms, take one side of a bet or the other based on another asset class: housing for example, or bonds, or commercial real estate or the stock market. The derivatives market is one ginormous casino, with gamblers taking one or the other side of a bet, and the house gets a cut. Once in awhile the casino owners get in on the action, but normally, they just make a cut on dealing the bet. Most of the time losses are not that severe and the market goes along, but when a market implodes or there is a black swan event, the losing side of the bet, is faced with massive losses. The brokerage tries to sell both sides of the bet, but sometimes (if there is no buyer), the loser is the brokerage, themselves.
This is what happened during the Great Financial Crisis (2008), the Fed raised rates, the housing market fell, which put banks under pressure, as foreclosures rose, the brokerages who had placed their derivative bets on the housing market, fell under extreme pressure, and finally Lehman cracked due to derivatives and the government stepped in to bail everyone out, including the taxpayer, well, the taxpayer got to foot the bill, but at least they felt safe.
Watch this documentary on the havoc the bankster wraught in The GFC of 2008
It gets more sinister. Remember the bank bail in’s above? Those laws portend to brokerages too. What ensures that you own something? That you have property rights? The law. Well, the law in the US now says that when you deposit your currency in a brokerage and buy stocks and bonds, those stocks and bonds held by the brokerage (supposedly in your name), can be used to bail-in the brokerage if they get in trouble with a derivative bet. In the past, people could buy stocks and custody the certificates in their own safe, or home or wherever. After 2008, laws were created saying that only brokerages could custody those assets. Whatever the brokerage holds in your name is not really yours, it is theirs physically and legally. You are the one on the hook for their risky behavior. Your assets can be liquidated to bail in the brokerage. Don’t believe me? Watch this video.
My brother likes to say "the biggest risk is the one you don't know about." This law, that allows your stocks and bonds to be collateral for their reckless behavior, is the risk you don't know you have if you have any assets in brokerages. They have gambled with your assets. Even worse, during the Great Financial Crisis, when Lehman failed, this law was tested. JP Morgan took over Lehman's assets and then kept them. The people who thought they owned the assets and thought they would transfer to the new custodian as had happened in the past, were incensed and sued JP Morgan. The courts found with JP Morgan and the people who had their assets at Lehman were SOL. However, Jp Morgan did have to give the depositors their cash.
This is their latest conspiracy, and the legal construct they have created in order to take all of your property rights away from you so that "you will own nothing and be happy." They have changed these laws world wide, so they can take everything everywhere in one fell swoop. Are you going to stand by and watch it happen, or get out? It is happening and they need to do it with speed, so everyone wakes up one day and finds out they are penniless slaves to the banksters forever.
Have you been to a bank recently?
They are empty. Record employee layoffs and no one there to help. I have a few banks. I had to visit one both at home and on a trip, both places were practically empty. The other bank I work with is on skeleton crew also. I cannot find the exact figures, but the last one I had for 2023 was 40,000 layoffs for the Industry. In 2024, Citigroup alone, has laid off more than 115,000 people.
I was recently helping someone move her money so she could buy bitcoin. What had been a 10 minute conversation with the same brokerage (Fidelity) for me a month earlier, was an hour conversation for her. They wanted to know why she was moving the money, who her financial advisor was and all sorts of questions that were none of their business! When she told them that, they threatened her and said they did not have to give her her money! Wait! What?!? The guy said the quiet part outloud. They do not have to give you what you thought was your money back. This is by design; it’s codified in the law.
The banks and brokerages are seeing record outflows. If you wait too long, will you even be able to get your money out? In both cases, they have lent your money to someone else in order for the bank to make a profit, and have securitized their bets with your assets. Do they even have the cash? Banks in Australia are banning cash withdrawals. Swiss banks are considering ways to prevent “Bank runs” (a really impolite way of saying people want their own money back, and the government wants to prevent that?) We know what Canadian banks did to the truckers who protested, as well as the money that people donated to them! Interestingly, donations made in bitcoin were not a problem, because they are anonymous and bitcoin cannot be tampered with or controlled by the government or the banks or anyone.
Keeping your uninsured deposits in a bank or brokerages is asking, no, begging them to steal it through the above process. Why risk your life’s work and wealth, so the banksters can steal it?
This time is different, much different.
Credit card insolvency is also rising, meanwhile student loan repayments just started again. These people had already spent that portion of their monthly income on something else! Their mortgage interest rate may be low, but the average house payment is 45% of HH income! As food and fuel prices rise, as well as the cost of insurance, they will not be able to keep their homes, they will be forced to deleverage and hand those keys back to the bank as well. In other words, the US consumers are illiquid. I wrote this paragraph in late 2023, since that time, Biden has forgiven student loans, on behalf of, you, the taxpayer, so now you get to foot that bill too, and the FHA has introduced "rules" that do not allow banks to foreclose, or make it very hard to foreclose on first time home buyers. So young people are getting an ability to also kick the can down the road.
Now add on unemployment. The government recently came out with revised employment numbers. They revised down every one of the last 10 months. Employment creation was not positive in 2023 as the White House repeatedly claimed, no, it was negative. I kept wondering why unemployment was staying low when we have record bankruptcies and record layoffs, and record job losses? It’s because the government is lying about unemployment! During the Great Depression, the unemployment rate was 20%, many statisticians say we ARE AT 20%, it is just hidden, and will only get larger as bankruptcies continue.
This time (vs. The Great Depression), the money is full fiat and at the end of the fiat lifecycle. They may also confiscate gold, when the currency collapses, but we know they are going to confiscate the wealth of the uninsured depositors through bank “Bail-in’s”.
Will there be a black swan event?
Mortgages as a percent of income are at their highest levels ever. People are pulling their money out of banks at record rates, seeking higher yields, and just to eat. Car repos are at record rates, credit card interest rates are at record levels, bankruptcies are at record levels, the government is borrowing at record levels, and needs to refinance record levels of debt, commercial real estate values are collapsing at record levels and record levels need to be refinanced this year. The government collected less in taxes in 2023 than in 2022. The money supply for you, is contracting, while overall it expands, as the fed prints money to pay the governments bills, oops, I mean line the government gangsters pockets, traffic humans, transport illegals and pay them double what the average person gets from social security, send dollars to Ukraine, etc.
Most importantly, when 2008 was over, and no meaningful regulation happened, they created CDO's all over again, this time financing commercial loans to businesses in order to let them expand. Those piles of garbage are coming due in 2024 and 2025.
The Realtors Association just lost a 2 billion dollar state lawsuit and now five other states are piling on. Mortgage forbearance on 14 million homes expired at the end of November, 2023. Home purchases are at record lows. If these homes cannot be refinanced (which they cannot, because as discussed earlier, the banks do not have the currency to lend), they have to sell. We also have the shadow inventory of airbnb investors, as well as congress proposing a bill to ban Wall Street from owning the homes they acquired when foreclosures were at record rates during the Great Financial Crisis. The banks are insolvent and so is the FDIC, the stock market is at record highs, Baby Boomers are retired or retiring and expecting to live off these high valuations. While we know the unemployment numbers are higher than reported.
I’d say, YES! THERE IS ABSOLUTELY GOING TO BE A BLACK SWAN EVENT! MAYBE EVENTS!
ROME IS BURNING!
The housing market is at a standstill because banks have no liquidity to make loans for people to buy homes. And housing prices are unaffordable for 75% of borrowers. Prices are falling, even in safe havens, where cash buyers exist, but do not want to buy a falling asset. The banks are underwater already, and unlike brokerages who can institute stop losses, the banks cannot force someone to sell their home if it goes down in value. But if the market forces someone to sell their home because they lost a job, or because they have to relocate, or because of divorce, or because their insurance and other homeowners expenses are too high, or whatever, then the market will eventually find a price. Where will that price be if banks cannot afford to keep the market inflated with fresh capital? What will that do to the banks? What will that do to that derivative market?
What about commercial real estate. $2.7 Trillion of that debt needs to be refinanced in 2024. Banks do not have the capital to lend, and buyers are not coming to the table with money. Buildings are empty. The borrower may want to hand the keys back to the banks, but so far this year, the banks are allowing the borrowers to "pretend and extend". How long can they "pretend and extend"? What will that do to the banks? What will that do to that derivative market?
Commercial loan maturity is coming due this year in record numbers, as stated above, these were bundled and sold into commercial markets. While brokerages undoubtedly repeated their 2008 playbook and made risky bets against the assets they sold to the public. That is one big derivative market on it's own. Not just the bank debt, but the risky side bets the banksters created around them.
The stock market bubble is based on a rosy picture and a lot of liquidity in the market. The consumer is strapped, handing keys to cars back to banks in record numbers, credit card defaults are rising rapidly. If no one can buy products, what does that do to earnings? What does that do to stock valuations? If liquidity continues to contract, and the whole process above is a contraction of liquidity, what will happen to the stock market? What will that do to the corporate bond market? What will that do to that derivative market?
Your money, in banks and credit unions and brokerages is leveraged, not because you leveraged it, but because of fractional reserve banking. It’s game of Russian roulette, instead, at this point, ALL the chambers are loaded, not just one.
Soft landing my A**. It is set up for a collapse, so they can usher in their new CBDC. And the Fed and their government gangster cronies created it all, just like the Great Depression, and the GFC.
But wait there’s more!
The government needs to refinance $7.6 trillion in 2024, plus any deficit spending, (the deficit is the excess of what the government spends over what the government receives in income). The government raises this money by selling bonds to the general public, other countries and the fed (more on this coming). So, if the government spends in 2024 like it did in 2023, the government needs to raise $10.1 trillion dollars in 2024. That is almost 1/3rd of the national deficit!! All while banks cannot buy the bonds (unless they are still enrolled in the BTFP), and brokerages don’t have the capital to buy them either, because of outflows of savings (people are cashing in their IRA’s at record levels). China is in it’s own heap of trouble, so is Japan, so is Germany, so is every other country with a fiat currency creating central bank… All of these countries are also net sellers of treasuries. As countries around the world divest of treasuries, guess what they are buying? If you guessed bitcoin, you would be correct. What will that do to the banks? What will that do to stocks? What will that do to brokerages? What will that do to that derivative market? …The fed will print.
What Happens with the Government and Their Debt if They Keep Printing Money?
Currently, the government is borrowing money from the markets and spending money, which causes inflation in everything you need, and as we learned in Part II, we are seeing double digit inflation (click the link for an updated look at where inflation is today) in many of those things, right now. In fact, the government’s new inflation figures came out and excluding food and energy, the CPI is at 3.6%, almost double their 2% stated goal. And wait a minute, they excluded food and energy? How can you measure inflation without the basic necessities of food and energy?? They are lying to you about inflation, but you see it in your everyday expenses!
As the government continues to borrow money to fund their wars, money laundering etc. the debt rises, as the fed raises rates, the debt rises further, pretty soon, if the government does not rein in it’s purse strings, it is borrowing debt to pay the interest on the debt, which requires the printing of money. So far in 2024, the interest payments on the debt are up 40% over where they were in 2023.
Remember, EVERY dollar has INTEREST attached to it, YET there are NO dollars printed to pay the interest on ANY issuance of debt. Just as in a Ponzi scheme, all the investors cannot all be paid back their initial investment plus the stated returns, the same is true of fiat money. Fiat is a Ponzi scheme. There are not enough dollars in existence for the government to pay off the interest and the debt! Even with austerity, the government can NEVER pay off the debt because not enough dollars exist in order to do so, neither can the populace. If everyone wanted to pay back their accrued interest and their debt at the same time, it would be impossible, not enough dollars exist to do it. Fiat money and the banks use of layered money are a Ponzi scheme.
When banks create money, they loan it to the people, when the fed creates money, they loan it to the government (and to banks in the short term). The government could only bail out the banks to create more liquidity if it increased deficit spending (borrowing more) to bail them out. The loss of uninsured depositors would be a mere $5 trillion, but what about the derivative market losses? Could the fed print enough money to cover those? If they did what would that do to the currency? They cannot bail anyone out this time, including themselves, without collapsing the currency.
The Fed is not audited, but after they pay that 6% dividend to their shareholders, they pay the treasury the rest, well, they just announced that no amount of money would be going to the treasury because for the first time ever, the Federal Reserve lost money. In fact, they lost a whopping $113.3 billion. If the Fed loses money, guess who gets to make them whole? If you guessed, you, the American taxpayer, you would be correct. But all this begs the question, how does the fed lose money when it has the ability to print? If you read the linked article above, it explains it.
Think about it in terms of your own household, and in terms of percentages. If you were in spending 40% more on interest payments than you earned every year and your cumulative debt was nearly 8 times your annual income, how long could you go on? What happens when your interest payments become a larger and larger portion of your spending? You, personally, would have to rein in your spending to keep your household afloat, but at some point no matter how much you tighten your purse strings, you can't keep it going. But, you say, the government can go along a lot longer than the average household. Sure, but not with spending on the interest on the debt going up 40%.
The federal government is now spending $1 trillion on debt interest payments. That is 1/4 of their annual income! That means they have less and less of that budget to pay for their "services", unless they borrow more, which requires more interest, pretty soon, it is a snake eating its tail. The snake of the government has just about eaten its tail!
The federal government is near that breaking point. But the government has guns to enforce their fiat currency, and their spending... every fiat currency ever created has eventually failed because the government abuses its power and spends more than they take in, eventually causing some form of default and restructuring on the debt. When it happens in your household, it is called bankruptcy, when it happens with a government it is called restructuring, and restructuring usually means the central bank creates a new currency that is worth less than the old currency, but it resets the debt clock, and everyone in society gets screwed except the banksters.
What happens if there are no investors to buy the bonds?
The short answer to this is that the fed prints money. The long answer is that markets don’t really like their purchasing power to erode and confidence is shaken and people start looking for a safe haven. Which drains more liquidity from the market and hastens the demise of banks, brokerages and collateralized assets that can no longer get loans to prop up the value.
But what about foreign governments? Don't they buy our debt? Apparently, not as much or not anymore, as Mark Moss explains in this video which also shores up a lot of the content above. This a a few months old, and since then a number of world leaders, including Putin, have come out saying the the US is a bully and they don't want to do business in dollars. Is he speaking for all of the BRICS countries?
As liquidity dries up because banks and brokerages have less and less money to lend the government, the Fed will have to print the money to lend it to the government, even if the government practices austerity, and cuts spending, they need to raise $7.6 trillion this year, the banks don’t have it (remember from above, the liquidity they have now from the BTFP, will slowly drain from the system as they pay back the fed and take back their portfolios), the brokerages don’t have it, the people don’t have it, so the federal reserve will have to print it and lend it to the government (at the interest rate that the fed gets to set). No one ever asks if the debt is actually legal.
The fed is tossing around the idea of lowering bank reserve ratios. Remember, a bank must keep some of it's capital liquid, to pay back depositors (10% currently, in the UK it is 3%), If the fed relaxes requirements for banks reserve ratios, it frees up that last 10% of depositors money, to create more layered money. This is a last ditch effort to create more liquidity. In the short term, it causes more inflation. In your lifetime and mine, as well as throughout history, this never ends well, in fact it ends terribly.
The fed sets interest rates on a short term basis, but the investors don’t just buy bonds from the fed, they trade them on the open market. As the fed prints more money and lends it to the government, bond investors don’t like this and the market starts demanding higher and higher rates, which drives the prices of bonds down. If no investors can be found, the bond prices fall further. Remember what Rothschild did to his bondholders after the battle of Waterloo? (See Part IV.) He spooked them into thinking the bonds were worthless, and then bought them at a steep discount. This time the printing of money will spook bond investors into selling. Except this time the bet is bad, and there will eventually be no one willing to buy them at the bottom, except short coverers.
Knowing all of this, you could go short all these markets, but when you short something, you borrow that thing and sell it, then wait until that price falls (hopefully) and buy it back at a discount to give the item back to the person from whom you borrowed it. Short sellers may prop up the market on the way down, but they cannot prop up the whole market. Eventually, without confidence, the market collapses. The problem for you shorting the market, is the market can stay irrational, longer than you can remain liquid. Why not, just get on the sidelines, with your bitcoin and your popcorn and wait til the dust settles?
Even if the fed lowered rates drastically and overnight, and banks were right side up again, and so the the government could borrow at lower rates and kick the can down the road even further, and so that liquidity would be restored to the market, the government is still spending like a drunken sailor (on the very things a drunken sailor would buy). All that spending causes inflation in everything you need. If the fed lowers rates to avert the collapse, inflation would skyrocket and the system still collapses. It is over.
The fed is spinning a lot of plates right now, get one spinning and a different one will fall. They cannot keep them all spinning. Plus, they do not want to. They want a CBDC.
BOOM BOOM
BOOM
BOOM
BOOM
Does that look like a gun? Russian roulette, baby, and all the chambers are loaded!
But, what does history say?
Eventually, at the end of a currencies life cycle, it becomes apparent because the government has to borrow more and more and more just to cover the interest on the debt (sound familiar?). This leads to hyperinflation and usually some sort of default where the central bank allows the government to “restructure" their loans into a new currency or new terms, etc. all on the backs of we the taxpayers. But this just gives the banksters another 40 years of their Ponzi scheme, eventually they have to do it again, each time stealing more of a nations sovereignty and wealth. The banksters think that even if their war efforts fail, this is the trick they can use to force an indebted nation to “restructure”.
The U.S. Government has 4 options to kick the can down the road with the dollar
- They can default. The U.S. Government HAS defaulted on its debt in your lifetime! They did it in 1933 when they confiscated gold, and made it illegal to own gold. They did it in the 1960’s when they took silver out of the coinage. And they did it again in 1971, when they went off the Gold Standard. And they are about to do it again; they have no choice. When people say to me, “That will never happen.” They are lying to themselves, and they do not understand the history of money. However, this time a default would mean an outright default and refusal to pay back their loans because there is nothing backing the currency this time. They can also "restructure" the dollar into a CBDC. and could also steal everyone's gold again, and try to back their new CBDC with gold (for awhile, we know history repeats itself and your children or grandchildren will be in this very position again someday). No one likes the CBDC, and 20 states have banned one, so this is not currently their likely option.
- They can practice austerity. HAHAHAHAHA
- They can raise taxes. At this point this would create a revolt. People are already stretched too thin.
- Or they can print i.e. inflate away their debt. But we saw above, this is a short term option and only works at the beginning of a fiat currency's life cycle, not the end, at the end, this option creates hyperinflation, so they cannot do this for long. In the case of the Fed, their CBDC is not ready yet, so they need time. Hence, money printing for now. We see this when we look at how they are handling the banks, the BTFP (Bank Term Funding Program, discussed at the beginning of this article) gives banks a year from when they deposited to take their bad loans back, so the amount that went in in the first two weeks of the BTFP should exactly match what came out in the first two weeks since it ended. But in the first two weeks, $52 billion went in, and in the first two weeks since it ended only $32 billion came out! That is a $20 billion dollar difference, not a rounding error! Just as they are allowing banks to do in the commercial property sector, they are "extending and pretending". And now there is talk of changing reserve ratios, so banks can lend more... to the government. This means money printing and massive inflation as a result.
The dollar has lost 98% of its value since the beginning of this central bank. We are at the end of this cycle, so we will see hyperinflation in everything you need and deflation in everything you want. Anything that is or can be collateralized, will fall in value, while everyday goods and services are rising in price and your dollar falls in value. The dollar may be rising in relation to other fiat currencies, but your purchasing power is going down. However, the dollar is to the rest of the world, what bitcoin is to the dollar. The flight to safety is ultimately bitcoin.
In Weimar Germany, as the populace suffered the ravages of hyperinflation, many had to sell their assets to eat, but they sold them at an incredible discount. One farmer sold his land for the equivalent of the income he would earn from the next harvest, which was a mere two weeks away! And with inflation the farmers were making the most money of any business, even with debt. People sold income producing property for the equivalent of 1 year of rents. Most people, especially the poor and middle class, ended up penniless and impoverished at the end, to the point, they would listen to anyone, including Hitler! Another psyop/false flag to get the populace to comply? Additionally, with inflation, civilization descends into moral depravity, “Nothing is certain tomorrow, except loss, so live for today!” Is the general morale of the country.
We see this today, morals have gotten looser and looser. While many people were raised conservatively, the younger generations have become more and more lax in their morals, and conservatives don’t recognize society. Up is down, right is left, but down is not up and left is not right, ultimate confusion, ultimate programmability. (For an explanation of government psyops, see Part I, and OPERATION GLADIO)
You know the dollar is going down, when you go to the store, or to dinner, or fill your gas tank, and you have to pay more today for the same thing you bought a few weeks ago for less. For most people, at the same time, their credit card minimum payment a year ago, does not even cover the 30% interest on their credit card debt (a microcosm of the government). They are over leveraged, and unlike the government, they must deleverage to at least cover minimum needs, so they hand the car back to the bank to get rid of the payment, then go out and buy a clunker. Repos are at record highs, we did not even see levels this high during the GFC (Great Financial Crisis-2008). And demand for really cheap cars keeps climbing.
As discussed in Parts I and II, the banksters want a one world government and “15 minute cities” and they want a Central Bank Digital Currency (CBDC). What if they have orchestrated this economic tsunami so they can usher in the CBDC so they can enslave humanity forever? It is the only way they can crush bitcoin, so I would say they have motive. If they do, you certainly will not be able to buy bitcoin with your CBDC. You will only be able to buy what they allow you to buy.
They are testing this control mechanism with credit cards. People have reported that credit card purchases of guns have been denied by the banks, not because the person did not have the credit, but because the bank did not deem it a necessary purchase for the purchaser. Wait! What? Yes, they want to control you through the currency as these bankster families have done for millennia. Will you just go along, or will you get your life’s work out of banks and protect not only your future, but that of your children?
Think of the whole process like this. Let’s say you have a big machine, and that machine has big parts and little parts. Someone starts draining the oil from the machine, so movement becomes sticky, if no oil is continually added to replace the drainage, then the machine will eventually lose parts, small ones at first, then big ones, then the whole machine will break. The machine is our economy, and the oil is liquidity. As liquidity gets drier and drier in the banking sector, those “parts” will start to break. Banks have been treading water with a small inflatable buoy. When the BFTP ends (each bank has a year for the fed to hold their assets from whenever they "loaned" them to the fed. And they had up until March of 2024 to make those "loans"). When the "loans" expire and the assets go back to the banks, the fed not only pops their buoys, it ties on a weight. Banks will start crashing, even if the fed lowers rates, it is too late. Once one domino falls, the rest of the system will too. With a lack of liquidity, the Fed can only print money (with interest attached, but no interest printed to pay for it), which will cause hyperinflation. “Nothing Can Stop What Is Coming is not just a catch phrase” Q
This time is different, and it is not. This time is different from ANYTHING you have known in your life, and, in most cases, your parents lives! But it is not different in terms of the end of fiat currencies throughout history, EVERY TIME.
Except this time will be the most spectacular! In a good way, but only for you, if you have your bitcoin and your popcorn!
When they crash the system and if they fail to get their CBDC, your dollars will be worth less, your gold and stocks will probably go up, and so will commodities, but history tells us that they don't rise as much as the loss of your purchasing power (it won’t matter what it is worth if it’s confiscated), your real estate will be worth what you can sell it for in bitcoin (if you don't believe me, we will cover this in more detail in next week's post), your businesses will not be able to pay people unless you have bitcoin. They will have every country on the planet between the same rock and a much much harder place. The “logic will be, “We can fix all of this by going to a CBDC!” Yay, more control for them and less control for you and me!
If they are able to convert you to a CBDC, you and your progeny will be enslaved forever.
You can watch your dollars turn into toilet paper or you can buy gold and try to lug it around, which will eventually lead to 3rd party risk, which will create the vicious bankster cycle all over again for future generations. Or you can sell your dollars and buy bitcoin and save humanity in the process. How will you go down in history, in the storytelling by your heirs? Did you fight, or capitulate to enslavement? Did you buy bitcoin and create generational wealth, or did you wait and become enslaved to the harlot?
Today's levity CryptoCouple- Funny money - These guys are hilarious and do really short videos that are educational about bitcoin and fractional reserve banking.
Next week we will discuss why the future is bright, despite the economic tsunami coming our way.
NOTE: DO NOT BUY BITCOIN WITH A TYPICAL BROKERAGE. For the reasons described above, you do not own it at a brokerage. In order to truly own it, you need to download it into your own wallet. If the above has convinced you that bitcoin is an asset you want to own. Go to Part VIII. I use River Financial. They do not lend against your bitcoin or cash, and they cold store your bitcoin. You can leave some on the exchange if you plan to spend it, but you should download your bitcoin onto a hard wallet and cold store it yourself. Again see Part VIII.
You can also download the strike app using this link https://invite.strike.me/GPI99O. It only works on your phone, not your computer. This link will also give you a $5 bonus once you fund your account. You can also use the QR code.
THIS IS NOT INVESTING ADVICE. DO YOUR OWN HOMEWORK. I HAVE INCLUDED LOTS OF RESOURCES HERE FOR YOU.
References:
If you are wondering my credentials for writing this, please read the "about" section on this site, it includes my bio and wake up process.
Danielle DiMartino Booth Interview -state of the economy
GoldSilver channel November 23rd report
GoldSilver Channel on YouTube 1929 vs. Now
Layered Money, by Nik Bhatia (How fiat banking works)
Further explanation of Fractional reserve banking
When Money Dies, by Adam Fergusson (What happened in Weimar Germany)
Col. Douglas Macgregor- on bitcoin and the coming Black Swan event.
John Rubino economic outlook
Rudy Havenstein interview with Natalie Brunell
The Federal Reserve Website - they have all the charts on the money supply, etc.
Heresy Financial on YouTube. - he breaks down the monetary system and
current monetary landscape into excellent bite size chunks.
Freight Recession Companies in Dark Times
Comercial loans are all in trouble - RJ Talks on YouTube
Why home listings will go up in 2024- Micheal Bordenero on YouTube
Heresy Financial BTFP- how banks are underwater and how they will fail.
Danielle DiMartino Booth on YouTube - excellent charts and analysis on current economic conditions.
Natalie Brunell interviews James Lavish on bond market failure - all her interviews are FANTASTIC.
CryptoCouple- Funny money - These guys are hilarious and do really short videos that are educational about bitcoin and fractional reserve banking.
Can the State Stop Bitcoin with Robert Breedlove
The Future of Bitcoin- Michael Saylor If you watch only one video, this is the one to watch