The Death of Money - Again!

Since many people rely on an energy source we know as money, it is sometimes useful to check in on the health of the energy source. If that energy source evaporates - where does that leave you?

Situational Awareness can assist an individual in escaping a sticky situation... but only if cognizance of the threat event is recognized and acted upon.

The focus today is... your sickening money. If you happen to have some... it may be a good time to check your reliance on its health, money the world over is beginning to pale.

Over time expressions such as, "cash is king", lead us to a place of assumption and complacency, we chug along with the comforting thought that money is reliable and will remain so.

However, on a cautionary note...

Historical record shows that periodically money sickens and sometimes expires leaving bewildered citizens bemused that their life savings are no longer worth the paper they are printed on. One does not have to go back far for an example, it has happened in living memory, our tendency is to forget.

The sickness of money is always the same, the infection and symptoms never waver... this is useful since performing the money health check is simplified. 

The sickness then death of currencies is entirely predictable, the only variable is timing. Often institutions delay the onset through misleading statements and misdirection of attention. The goal is to forestall, not remedy... remedy is not even an option.

Universal debt forgiveness is the only viable solution, but unlikely to be applied.

Ultimately, natural, cascading global defaults will provide the same effect and is more likely to be the unwelcomed solution, but not without pain. Billionaires will have to be content with millionaire status, millionaires will become the middle class and the rest-- serfs and paupers.

The sickness sets in with the printing and distribution of money in large quantities with no asset to secure value for it.

When a government finds itself mired in sovereign debt the only way to fall-stall the inevitable economic evaporation is to begin printing money - furiously.

As we know, money has value only because we have all agreed it does.

Money is an instrument of convenience and each dab of it represents a fractional worth of a countries theoretical assets, this works fine as long as everyone is confident that the state assets have a value. To raise money to service sovereign debts the assets can be mortgaged to an investor who receives their investment back with interest based on future earning of that country. The key is, future growth and asset value increase.

The idea is, the country will always be growing and thriving thereby increasing its asset value and will be able to repay the mortgage with interest when the time comes. This sustains the health of the money and sustains the illusion of its value.

Should these growth lines become broken, then the money sickness begins.

All over the world the confidence lines have been broken, no debate required.


Countries have mortgaged themselves far beyond any appreciative asset value, in most cases by an order of magnitude considered insurmountable as far as ever achieving an asset value worth the money borrowed.

For an individual... this "over extended" condition leads to bankruptcy being declared.

In fact an individual would never have been allowed to descend into so much unsecured debt, they would have hit the debtors wall far before that threshold was breached.

Due diligence of the lender and appropriate legislation would have prevented such fiscal mismanagement insanity... but as we all know due diligence and even basic monitoring and oversight was short circuited by elitist world leadership in favor of skinning their own citizens while fattening their corporate sponsors and inner circle associates.

In 2013, without exception, countries are mired in insurmountable sovereign debt. 

This fact cascades down through all levels of the economy and is all pervasive. There is no fall back position for anyone, anywhere. This is because there are no pockets of disaffected global economy, there is no place to pull from, except printing presses. This makes the mega collapse of today unprecedented and should not be compared to regional contained collapses in the past.

This is important because in prior economic collapses the resolution was possible through a fallback to gold as a backstop.

Since abandonment of the gold standard, money in circulation has no pegged foundation... all the known gold in the world is only worth about 6.2 Trillion and is irrelevant when sovereign debts are measured in 10's of Trillions or if unfunded liabilities are included... 100's of Trillions.  

We are in the time of "arresting" rate of fall, not the fall itself. The fall itself is just beginning.

All conventional means of servicing fiscal liabilities are unreachable... and so the unconventional kicks in... once again, incredible volumes of money are being printed with no asset value to back it up.

This is the onset of money death.

There can only ever be one conclusion to printing obscene amounts of pretend money, "real" money swiftly loses value and it takes more and more of it to buy less and less. Customers who formally invested in purchasing debt are realizing repayment is not possible and so that option source is all but gone.

Savings in terms of purchasing power dwindles alarmingly and eventually becomes literal trash. Exacerbating this raging sickness is low interest rates for savings, the rate of saved money worth declines far faster than the rising cost of living.

Initially, governments shield the effects of the growing money sickness... the phony money is used to infuse the economy with make work projects, this is known as money laundering in the counterfeit criminal sense. It is a way to distribute the trash money into the economy providing the watering down effect.

The effects of printing bogus money never wavers. 

At first... hope for recovery is crowed about as bailouts, stimulus and other false economic propping strategies takes place. Stock markets are pointed to as evidence of recovery, by omission the hundreds of removed and failed companies are never cited, neither are the millions of people who used to be employed by them.

Bogus money infusion is a carefully orchestrated effort to buy time. 

Administrations are interested in their own short term accountability and in particular their OWN future long term benefits as most people would be. If it is timed right, the bag of muck is handed along to the next hapless incumbent while the current dynasty parachutes safely to the sunny side of the street, mission accomplished.

This is not cynicism on my part, it is a reflection of  observable "result." - It is a duck!

2013 - Where then are we... in the dying money process?

THE DEATH OF MONEY

IT'S a terrifying thought - a loaf of bread that costs millions of pounds. After one of the world's richest men hails a new book on the Twenties economic crisis, we ask if it could happen again.

NEVER underestimate the power of a recommendation – especially from one of the world’s most successful investors. Until recently, a book with the unenticing title When Money Dies: The Nightmare Of The Weimar Hyper-Inflation was somewhat obscure and out-of-print. 

Now the prophetic tip from the "eminently successful investor" makes the piece newsworthy and imbibes the warning with untold credulity, that is how our conditioned hive works, it is not truth until a designated "truth teller" tells it.

I am not dead until the appointed authority says I am dead!

This fact of our collective psyche is our Achilles heel in the realm of being situationally aware, we are apt to remain oblivious until the grinning Cheshire cat announcers of mainstream media tell us what to do, when to do it, how to do it and why to do it.

In those situations of believing the "spin"... there is always aftermath and always victims.

Sadly we have donated our "good" senses to surrogate "well-being" guru's... folks who we don't even know and by nature... can never care a less for us personally. It is always ill-advised to replace your gut instincts with an unknown quantity.

Coming from a "no one" like me... enlightenment has the impact of a flying dandelion seed, but lets face it...  liquids run downhill regardless of trade designations or education credentials, sometimes sense tells all.

What we have here is running down hill, quickly.

The book is engrossing and sobering reading, describing a galloping economic disaster dubbed “wheel- barrow” inflation because people literally carted around barrow-loads of notes which were in themselves virtually worthless. 

The cost of basics soared so much that new price lists were printed up each morning (such as “multiply ordinary fare by 600,000”). People panic-bought, savings were wiped out and unemployment soared. “The Weimar republic was all but reduced to a barter economy,” says Fergusson. “expensive cigars, artwork and jewels were routinely exchanged for staples such as bread, a cinema ticket could be bought for a lump of coal, and a bottle of paraffin for a silk shirt.” 

Crowds of women queuing for hours for a piece of bread and included every level of society. “The common assessment that it was the middle classes who were left destitute is only part of the story,” says Fergusson. 

“Certainly they had savings to lose and they lost them, whether in paper form or in the form of the jewellery, silver, furniture, pictures or other precious possessions with which they were obliged to part... But not only the middle classes were going through the mill. The workers had gone down with the middle classes. They ranged from tailors and cab drivers to chimney sweeps and domestic servants.” 

The effects were devastating. “In hyperinflation, a kilo of potatoes was worth, to some, more than the family silver; a side of pork more than the grand piano. A prostitute in the family was better than an infant corpse.”

In 2013 we are apt to think of these scenarios as quaint and unlikely for modern times. 

So too did these folks, I know this as fact and from experience.

We should always remember it is not history that repeats, it is the folly of humanity that does, with dull monotonous regularity.

If your accounts were hooked to a vital signs monitor... you would be cringing right now.

If in 1913 I purchased an item for $20 - In 2013 it would cost $470.60 that is 2253.0% cumulative inflation rate. The rate is not descending...







Survival... comprehend, endure, adapt, survive.

Stay tuned...