by Bob Livingston
The world is bound up in a paper money/credit explosion that can only end badly. What it really means is impoverishment for millions of people, most of whom are totally oblivious to the roaring undercurrent.
There is little wisdom in announcing an economic crash after the fact. Yet some people get upset that I continue with ongoing warnings of a coming financial “pandemic.” Seeing the probabilities before they happen is the only prediction that is worthwhile. Afterwards is merely reporting the obvious.
I warned my readers in my monthly newsletter, “The Bob Livingston Letter” www.boblivingstonletter.com (subscription required), months before the 2008 collapse occurred. I believe we are nearing another similar event that will be deeper than the last.
My findings are that the American people don’t believe that we can have economic collapse followed by economic and social chaos. They suffer from normalcy bias. We need to pay more attention to history of the United States and the world.
The U.S. dollar is progressively buying less and less. The middle class and savers are impoverished. I often use that word, “impoverishment,” because that is exactly what has happening for 100 years, ever since the beginning of the Federal Reserve Bank in 1913.
But the process of currency destruction is getting faster and faster. This always happens in the final stages. You would think that now almost everybody could see what’s happening.
I am wondering if all the crises — ISIS, Ebola, Ukraine, etc. — are simply providing cover for the economic shock progressing daily. The savings of the working class and the middle classes are being wiped out with a ruthlessness no revolution or foreign war could equal.
While there is an ongoing accumulation of hard assets by the few who know the nature of politics, governments and history, paper money is more and more in demand by the debtor class. The “value” of financial assets is far, far larger than the dollar value of the U.S. economy. As yet, no one seems to sense the risk.
Everyone believes such pervasive nonsense touted daily about the current state of the U.S. economic financial condition. The administration puts out a false unemployment figure and papers over the growing dependence on government, the loss of jobs, the expansion of the “part-time” job base and the stock market rising on nothing more than money printing and hot air.
I don’t care how smart the professional class is, it seems that the imbalances and contradictions of the U.S. dollar and the economy are beyond their grasp… or they are perpetually lying. The people did not learn from the last economic collapse and are trusting the same group of liars who lied to them before.
As a nation, we are suffering from something akin to attention deficit disorder and living in a world where fantasy is more real than reality. We are goaded on by none other than our illustrious Federal Reserve, the banksters, the moneyed elites, the political class and the purveyors of their propaganda, the mainstream media.
Let’s draw on this quote from Edmond Burke on the subject of national debt:
When a nation is deep in debt and knows no way out, when it spends itself into deeper debt and cannot stop, the monetary authority who is seen as all-knowing will be believed on his personal account. There is no other way to avoid panic and crisis in this state of things.
The person who really commands the credit flows is your master… the master of your material possessions, the master of your souls.
We have been in an orgy of financial alchemy called quantitative easing. It has constructed financial bubbles the likes of which the world has never known. The amount of money (credit) issued over the past dozen years far exceeds the entire amount of currency printed in the history of the United States form George Washington’s inauguration to 1980.
The nature of money or credit creation is that it must move at an ever-expanding pace because a sinking debt structure needs to move faster and faster in order to remain afloat. This mania of credit creation is difficult to comprehend because there has never been anything close to it to compare it with.
As currencies collapse, credit deteriorates, political institutions lose credibility, moral degeneracy is on public display and financial activity becomes feverish and of course, the poor and the middle class are further impoverished.
And as stated above, a common feature in the collapse and those before it is the bedazzlement of the smart and actually knowledgeable people, whistling past the graveyard, while the hangman adjusts the scaffold. All is a fantasy island where only a few discover that security has become a castle of dreams. How could it be otherwise when everyone believes that debt is wealth?
Paper money is debt! All financial assets are debt. What a hot air balloon waiting for one small pin.
All the while, a small, savvy group is quietly moving from paper assets to real assets, i.e., gold, silver, gold stocks, some foreign currencies and land. These people have the vision to see the approach of political and social immorality, which will get worse and worse until the U.S. dollar collapses to near zero purchasing power.
Lest you have too much faith in the American dollar, all paper currencies in history have turned to dust. It is not a question of if, but when.
Why would anyone delay getting out of the U.S. dollar into real assets? Assuming they had a basic knowledge of financial and economic conditions, the only possible answer is they can’t believe that the U.S. dollar — and with it their savings — is headed for the dustbin of history. These are the people who form lines at the bank as the bank closes long after the last of the money is gone.
Historically, governments confiscate wealth with inflation (paper money). This is another way of saying that paper money confiscates wealth. People complain but they accept it not realizing that eventually all savings are wiped out.
Inflation in the final stages begins to take on new meaning when prices jump daily. Governments, meaning the bureaucrats and politicians, hide their theft and chicanery with printing press money. They can pay “social benefits” and create wars with paper money until the system begins to collapse.
Eventually, the printing press money loses its disguise; and governments resort to outright confiscation of wealth by one ruse or another. Remember that governments don’t produce any wealth, so they must take it from the people one way or the other. Toward the end and final destruction of the paper currency, governments use ingenious “patriotic” arguments to induce greater sacrifices by and from the people. Sound familiar?
About this time we have a flurry or mania of economic activity which really serves as a cover for the shrewder class to convert their paper money into gold, silver and other real assets. They foresee an economic collapse not yet visible to the population at large.
And what happens to all the depreciating paper money? It winds up almost exclusively in the hands of the working class. As things get increasingly dire, the people try to get more and more paper money. The debtor class has to have more and more paper money even though they know by now that it is fast becoming worthless.
Meanwhile, the social order continues breaking down. It takes immorality to entertain. And in France during the Assignat Inflation, beginning in 1789 and the early 1790s, to say that the currency was depreciating carried a four-year sentence in irons. At the time, investments in foreign countries by Frenchmen were punishable by death. Vast lands and estates of the French church were expropriated and declared “national properties.” This is the type of atmosphere that comes in a wild inflationary environment.
But we have the same thing in deflation! In 1933, in the United States, “all persons were required to deliver to the Treasurer of the United States any and all gold coin, gold bullion, and gold certificates.” Well, some actually turned in their gold.
The Senator Thomas Amendment in 1933 was passed to “transfer $200 billion from the hands of persons who now have it who did not buy it, who did not earn it, who do not deserve it, who must not retain it, back to the other side, the debtor class of the Republic, the people who owe the mass debts of the nation.” Senator Elmer Thomas first planned to confiscate bank deposits outright instead of through a banking collapse that happened anyway. This is U.S. history, my friends — only a couple of generations ago.
After the Civil War, in the South the only currency of any value was gold; but only a few perceptive insiders anticipated the carnage of the Civil War and its aftermath. Of course, as always, most of the people could not believe what was happening to the South. They were caught destitute and impoverished.
Why must the masses be face to face with crisis to illuminate their world? All I can say is that they continue to believe the lies of politicians and bureaucrats.
In time (nobody knows exactly when), the U.S. dollar will completely lose its purchasing power against hard assets, real estate, precious metals and some foreign currencies.
Inflation or deflation? Right now, the Fed is producing inflation but trying to hide it with chicanery. But without doubt, there will eventually be an economic and financial accident, which could cause a swift deflation for a time. This is exactly why we strongly recommend the holding of some emergency cash.
In summary, we recommend gold and silver coins. I like the bags of U.S. pre-1965 90 percent silver coins, as these coins are still legal tender and readily recognizable because they appear the same as the clad metal coins we have now. Accumulate some gold and silver stocks.
Hold some cash money — enough to cover about three months of bills if possible. Store at least a three-month supply of food and water and store ammo for your guns. Remember that emergencies and catastrophes come in many forms, from natural to man-caused. Try to consider as many eventualities as you can and prepare for them.
I can’t believe it, but some people still ask if they should put their coins in a bank safety deposit box. The answer is still a resounding “NO.”
Inevitably, whenever I recommend buying gold and silver, I’m asked to recommend a dealer. Your best bet, I believe, is to find a local coin dealer or gold seller who is well established, has been in the community a long time and has a good reputation with the Better Business Bureau and his customers. Buy with cash. Be careful who you tell that you have it. Store it in a safe, preferably hidden away.