What Are You Going To Do As Our Money Dies?

In our recent article It’s Time To Position For The Endgame, Chris Martenson explained how the US Federal Reserve and its sister central banks around the world have been engaged in the largest and most egregious wealth transfer in all of history – one that has been drastically exacerbated by the covid-19 pandemic.

The official response, tremendous monetary stimulus by the central banks paired with massive fiscal stimulus from national legislatures, has been pitched as “saving the system”.

Yet, in reality, it has merely served to accelerate the transfer of capital from the public into the pockets of the already-rich.

Anyone with eyes can see how the central banks have abandoned all pretense of monetary fiduciary responsibility and have simply cranked their printing presses up to “maximum”:

In concert with this surge of liquidity, national legislatures have added their own emergency measures. In the US alone, the CARES Act pushed nearly $3 trillion in fiscal stimulus into the system, and will highly likely soon be followed by another $1-3 trillion depending on which party’s bill gets passed.

Despite these staggering sums, the amount of money trickling into the average US household has been meager and is drying up.

Instead, these $trillions are mostly finding their way into the coffers and share prices of corporations. We have seen the fastest and most extreme V-shaped recovery in the history of the financial markets since the March swoon. The major indices are now back to record all-time-highs, despite the major carnage covid-19 has wreaked on the global economy.

So who benefits from that? Oh yeah, the people who own those companies. The already-rich.

Remember: 84% of all stocks are owned by the top 10% of households.

So in a nutshell, the official response from our “leaders” in government to the pandemic threat has been: Rescue the markets at all costs!

Chris refers to this as the Leave No Billionaire Behind (LIBB) Program. As he describes:

Between March-April 2020, the Fed added a staggering $282 billion to the bottom-line wealth of US billionaires:

But that wasn’t enough.

So the Fed kept printing. And buying, buying, and buying more and more financial assets held – of course – mainly by the already-wealthy.

By May 2020 the total added became $434 billion, making all the US billionaires more billionaire-y:

But even that wasn’t enough for the Fed. So it printed even more, increasing the total to $583 billion by June:

Yep, you guessed it. It didn’t stop there. By July, the grand total was up to $637 billion:

Considering that US GDP dropped by -32.9% (annual rate) and clocked in at an annual rate of $19,408 billion in the second quarter of 2020, the US Federal Reserve had granted an astonishing (truly!) 3.3% of the entire output of the entire country to US billionaires. For doing absolutely nothing.

Yes, people have many reasons to be angry and to protest these days. But they ought to be furious with the Federal Reserve and its lackeys in Congress who have utterly and completely failed to check these egregious, unfair, and socially destructive policies that grossly reward the elite at the expense of the bottom 99%.

Let’s do a little math here. Handing 3.3% of the value of the entire economic output of 160,000,000 working people to roughly 600 individuals is the equivalent of granting each one of those 600 billionaires the entire yearly output of 9,020 people.

It’s like the Fed decided that each billionaire deserved to have 9,020 people become their slaves for the year. How is that not psychopathic? How is that fair? What’s the plan here? Keep going until these 600 people own everything in the world?

And where’s the media on this? They happily parrot every statement the Fed makes, without asking even the slightest of critical questions. They are failing us badly, too.

Okay, so why should you care?

Because what the Federal Reserve is doing generates enormous systemic risks which could well destroy the economy and much of our future prosperity.

At heart, I am a conservative in the sense that I’d like to keep (i.e. “conserve”) what we’ve got, both ecologically and economically. I’d vastly prefer that we change our nation’s destructive path now on our own terms than being forced to on reality’s terms later on. As painful as the former may be, the latter will be much more so.

History is complete on the matter: one cannot print one’s way to prosperity. It’s been tried over and over again and my view is that if it could be done, we’d all be speaking Latin because the Roman Empire with it brilliant engineers would have figured it out millennia ago and would never have collapsed.

If the Romans couldn’t work it out, it simply can’t be done. Mathematically, it also doesn’t pencil out. Money is a social agreement, a contract. It’s not real wealth. Taking the attempt to the extreme, what would happen if everybody had a billion dollars and nobody had to work?

So printing currency only manages to delay and exacerbate the inevitable by building up the energy for its own destruction.

And the longer the delay, the worse the reckoning when it ultimately arrives.

So to recap, the Fed et al have ensured that the covid-19 pandemic has resulted in a boom for the elites, while the rest of us are experiencing an economic Depression that could last for years:

<img class=“aligncenter size-medium” src=“https://peakprosperity.com/wp-content/uploads/2021/09/US-unemployment-claims-2020-08-20-continued-state-federal-NSA-stacked-1.png” alt="“Continued Claims chart” width=“481” height=“447” />

So, with the central banks hell-bent on supporting the rich by sending the prices of all financial assets farther into the stratosphere, is high/runaway inflation the natural next stage from here?

Will those worrying about a systemic “crash” from all the intervention and deformation be proved wrong?

We addressed these questions earlier this month for Peak Prosperity’s premium subscribers in Chris report Is High Inflation Now A Bigger Danger Than A Deflationary Crash?

Every so often, we’re encouraged by our paying subscribers to share an important report with the general public. This is one of those times.

If you’re not yet a subscriber, you can read the report in full, for free, by clicking here. (free registration required)


This is a companion discussion topic for the original entry at https://peakprosperity.com/what-are-you-going-to-do-as-our-money-dies/

Not sure there is a solution. What are we going to do? good question. My guess is we are going to suffer dearly or a good decade or so. The rich will suffer some, but nowhere near as much as the masses. As to why they want this, I am not sure. as it will not end well for them either. If the US collapses, unless you are leveraged 100% in real assets like gold and land, you might as well flush everything down the toilet or be prepared to burn it.

What’s the contrarian view?
Consensus: The fed is printing too much money and we’ll soon see inflation.
Contrarian: The fed isn’t actually printing, they are digitally creating bank assets. These bank assets don’t become inflationary “money” until it’s loaned into existence or given in the form of an actual stimulus check. What did consumers do with their stimulus checks? They 1.) paid down debt/bills (deflationary), 2.) bought stocks (stagflationary).
…The market does what the least number of participants expect it to do. I know a lot of people that think we will get inflation, and a lot of people that think we’ll see a crash. I think we’ll see a slow burning stagflation punctuated with a stair-stepping of socialist policies (like UBI). All along the way we’ll be waiting for massive inflation, and we won’t get it.
Will I own gold just in case? You bet.
Do I expect bitcoin to do even better? Yup.
Will I lose money trading stocks? 100% Yes.
There is only one guaranteed return in this world. Cap-ex that reduces your expenses. Should I put $20K passively into some investment that might go up or down? Or should I put a $20K solar system on my house, which will pay me a monthly coupon of about $100 in energy costs?
Americans are so focused on increasing their pile of money. Why not reduce the amount of money you need?
Retirement is a fraction: (What you have)/(what you need per year). Once that fraction equals 25, you can retire. Increasing the numerator is wonderful. But reducing the denominator does WAY more for you.

Spot on macro

I am also going the cap-ex route. My solar panels are currently sitting in my garage for installation next week. We are also paying down debt. We hope to be debt free with the exception of his truck and the house by next year. My 401k is doing nothing because I had switched it to more stable value. Still not 100% sure what to do with it so for now I do nothing. We own some PMs and land in addition to our current house. (Its a pulp paper tree farm) Reducing expenses and increasing self sufficiency is the name of the game right now. The market is so artificially high I am not sure what to make of it.

Consensus: The fed is printing too much money and we'll soon see inflation. Contrarian: The fed is digitally creating bank assets. Consumers 1.) paid down debt (deflationary), 2.) bought stocks (stagflationary). ...people think we will get inflation & a crash. I think we'll see a slow stagflation with socialist policies (UBI)...awaiting inflation, and we won't get it. Own gold? Y. Expect bitcoin to do better? Y. Lose money trading stocks? 100% Y. One guaranteed return...reduce your expenses.
I agree with this comment completely, except the part I bolded (and the Bitcoin, who knows there; we can be assured gold will hold some value since it has through all of human history but not Bitcoin which is rank speculation of the highest order).
But I think your comment on reducing expenses is pure gold. I came to this conclusion back in the 1990s and have followed it religiously, pouring this excess cash into stocks and bonds. Regarding stocks: one need not "trade" stocks much to hold exposure to the largest wealth transfer in modern times...yes, this gap is gonna get worse. But one can hold stocks with low risk: just buy blue-chips and keep your stop-losses tight. IMO, it's a bigger risk to not own stocks. Why? Stocks are owned by the PTB, who are working hard to deflate other forms of wealth and grow inflation in housing, medical, and education. One just needs to keep stop-losses and make sure said stocks have real value (that is, they make real money and pay real dividends). This gets the benefit of the bubble with low risk; even value stocks rise when all boats are rising. It's a win-win.

OK, I admit to being pretty dumb in economics. I slept through my econ classes since they were really boring. I’ve been trying to get up to speed after being screwed by the recent crashes.
From what I know, the massive money printing has not yet resulted in hyperinflation since the 0.1% is hoarding it in their off-shore digital vaults. Is that correct? If so, what happens when they finally let some of it flow into the real world and what motive do they have in doing so?

Some 401k plans, such as some with Fidelity, offer a “BrokerageLink” option in which funds can be diverted to a separate account that allows access to more investment options, such as precious metal ETFs.

My comment about losing money on stocks is more of a personal truth than it is general advice. I trade somewhat actively with a portion of my savings because it’s fun and keeps me focused on markets (which is my field of work). It’s sort of like fantasy football for me. Keeps me interested. But to quote Chris - quoting someone else - "Portfolios are like a wet bar of soap, the more you handle it the smaller it gets.
Re bitcoin, you’re right. Who the heck knows. But I’m making a bet there.
I agree that gold will hold value, but I’m not convinced it will skyrocket from here. I feel like there could be another punch in the nose for sound money enthusiasts before it’s off to the races. But like bitcoin, who the f’ knows.

It’s not that simple. Chris talks a lot about complex systems, and there are few systems more complex than the flow of capital through a global economy. The idea that there is some hoard of capital sitting on the sidelines is problematic though. There are significant assets sitting on bank balance sheets, but there aren’t pools of “cash” (for lack of a better word) in the hands of the super rich.
There are MASSIVE deflationary forces at play in any given moment in the global economy… for example: 1.) Productivity gains that increase the pile of available goods/services, 2.) Productivity gains that reduce workers/income, 3.) debt servicing payments that would otherwise have been available for spending.
At the same time, there are inflationary forces as well, like: 1.) war, 2.) stimulus, 3.) resource scarcity, etc…
It’s hard to know the answer to the inflation debate, but I like the idea that I believe I heard from Chris (at one point or another) that we should expect to see deflation for things purchased with credit (college, cars, homes) and inflation for things purchased with cash (like food). But that assumes deleveraging.
Nobody knows. The more sure someone is, the more likely they’re wrong.

Again, I agree with you 99%…all but the “personal truth vs general advice” bit. Everything has risk, even doing nothing, and inflation is one of those serious risks one embraces by not owning stocks (with stop-losses). This is low risk and takes no skill; one can own the Total Stock Market with a healthy stop-loss set. Of course, it’s not risk free, but more risk-free from being in cash or gold alone due to inflation or legal issues. We’ve seen this big-time over my entire lifetime. It’s a general truth, not a personal one.
But your truth about saving money…is the very highest truth all should be absorbing at the top of this crazy “everything bubble”. Amen.



Macro, based on the collective reaction to your post, you’ve hit the bullseye!
I couldn’t agree more about “investing” by putting money towards things that reduce total outflow. We did that, in part, eight years ago when we first moved to our 10 acres of scrub brush. Too far out to be connected to a natural gas line, our house was heated and cooled with expensive propane. Dropping $30K on a geothermal system was a large one time expense but it paid us back in less than six years and continues to have a very high ROI. Our 3.5 kW PV system pales in comparison but still should pay itself off well before the end of its useful life.
I would love for others to chime in with ideas for investing to reduce ones cap ex. I imagine a large, productive garden would fit into that category and I’m working on that but thus far my yields have been pretty low there.
What other ideas do the smart folks here have to share?

I would love for others to chime in with ideas for investing to reduce one's ex.
Me too! My thoughts (costs of labor/energy/food/housing/medical are key drivers): 1. Cut driving very hard (live close to town/bike/walk everywhere possible). 2. Cut processed foods/eat at home (garden, hunt, fish, harvest). 3. Avoid paying for labor (do your own repairs for car/computer, cut your own hair, avoid the doctor like the plague). 4. Own your home and rent out space. 5. Track every expense & cut out any spending that adds no value to your life. 6. Own your own weightlifting rack & lift at home. 7. Live in small space. 8. Kill the TV/cut the cable/have an active social life with real, active people who also eat at home. I would appreciate more ideas for lifestyles that not only cut ex, but deliver a better life.

I have an issue with terminology. Sooprise sooprise sooprise. lol
I know you are lurking out there Grover. lol
It is not "our " money. It is not even money, it is currency.
It is “their money”. As everyone here is aware “their money” is issued by a private cartel of banksters. We are forced to use it by fiat.
Now our money for anyone interested is cryptocurrency. So as "their money " dies I say good riddance to bad rubbish. Bring on a democratic currency out of “their " control.
BTW. In 2007 I first read something by Chris Martenson called “The End of Money”
The last line of that essay is as follows
But the end of something is always the beginning of something else. Where’s our modern day Adam Smith? We need a new economic model.”
Satoshi Nakamoto gave us that model in 2009, just a couple of years after the essay.

I would like a Tesla ? or an AWD electric Prius. It would be comforting to have transport even if The System goes haywire.

For that reason I would never own one.

Well don’t think I fit the smart part, but about 25 years ago I used to read all of Amy Dacyczyns’ books called The Tightwad Gazette. Seriously, it was and still can be fun pinching pennies like you can’t believe. ?.

1.) Got a 3% mortgage? That’s a guaranteed 3% fixed return for paying down principal. Beats T-Bills!
2.) Saving for your kid’s college? Use a whole life insurance policy instead of a 529, just in case your kid’s school winds up being “free” and you get to spend that on something else.
3.) Don’t you dare spend money on cable…
4.) Don’t grow your own food. Instead, buy some land and lease it to a farmer with an agreement for veggies.
5.) solar hot water is the single highest ROI cap-ex there is.
6.) …unless you haven’t yet insulated your roof or installed LEDs.
7.) don’t spend $4 for coffee.
8.) Buy used electronics. I just installed a $2000 Surround sound in my basement for $200 because it’s from 2015.