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The COVID-19 Scamdemic, Part 1: The Hard Road To A New World Order

The COVID-19 Scamdemic, Part 1: The Hard Road To A New World Order



The COVID-19 Scamdemic, Part 1: The Hard Road To A New World Order Tyler Durden Sat, 08/29/2020 - 00:00

Authored by Iain Davis via In This Together blog,

Among many similar globalist states, The UK State is a public-private partnership between government, financial institutions, multinational corporations, global think tanks, and well funded third sector organisations, such as so called non governmental organisations (NGO’s) and large international charities.

Through a labyrinthine structure of direct funding, grant making and philanthropy, the UK State is a cohesive globalist organisation that works with selected academics, scientific institutions and mainstream media (MSM) outlets to advance a tightly controlled, predetermined narrative.

This designed consensus serves the the interests and global ambitions of a tiny group of disproportionately wealthy people.

This group of parasites, often misleadingly referred to as the “elite,” exploit all humanity for their own gain and to consolidate and enhance their power. They control the money supply and the global debt, which is a debt owed to them.

Human beings are forced to pay tax which, via government procurement, flows directly to the private corporations they own. War, security, infrastructure projects, education and health care provide profits and are used by the parasite class to socially engineer society.

Globally, they fund all political parties, with any realistic chance of gaining power, they own the MSM and spend billions lobbying policy makers.

Through think tanks and the actions of “independent” political activists, such as the FPAction Network, they directly fund political campaigns in exchange for the politician’s loyalty to them, not to the electorate.

Through their tax exempt grant making foundations, such as the Bill and Melinda Gates Foundation (BMGF), they control the scientific, medical and academic orthodoxy.

This global network of oligarchs is moving towards the final stages of its long held plan to construct a single global system of governance. Often referred to as the New World Order (NWO), it is a collaboration between supranational political organisations, like the United Nations and the European Union, controlled scientific authorities, such as the Intergovernmental Panel on Climate Change (IPCC) and the World Health Organisation (WHO), global financial institutions, including the World Bank, IMF, ECB and Bank for International Settlements (BIS), globalist organisations like the World Economic Forum (WEF), NGO’s like the World Wildlife Fund (WWF) and policy making thinks tanks such as the Council on Foreign Relations (CFR), Club of Rome and the Trilateral Commission.

The UK State is one, prominent tentacle of the emerging global governance system. It has capitalised on the COVID 19 crisis to create the conditions for a new global economic and political model. While COVID 19 appears to be a nasty strain of the common coronavirus, in Part 2 we will discuss how the UK State has spun a fake narrative about the disease to further the interests of it’s globalist, oligarch masters. Managing a response to a pandemic is merely the deceptive justification for the planned re-engineering of society.

In partnership with Johns Hopkins Center for Health Security and the BMGF, the WEF were chief architects of Event 201 which plotted, in quite precise detail, the global lockdown and the world’s media response to a global coronavirus pandemic. Event 201 was staged merely a matter of months before a global coronavirus pandemic broke out. Both the government lockdown and MSM response have proceeded exactly as they predicted.

To say this is all just a coincidence, and not worthy of further scrutiny, is beyond obtuse. The WEF’s extensive and detailed COVID 19 Action Platform was up and running on March 12th 2020. The day after the WHO declared a global COVID 19 pandemic.

It is clear from the WEF’s own words, that they see COVID 19 as a fantastic opportunity. They state:

The Covid-19 crisis, and the political, economic and social disruptions it has caused, is fundamentally changing the traditional context for decision-making…….As we enter a unique window of opportunity to shape the recovery, this initiative will offer insights to help inform all those determining the future state of global relations, the direction of national economies, the priorities of societies, the nature of business models and the management of a global commons.”

This is a proposal for global governance which supersedes national sovereignty. It is as simple as that.

It is remarkable that there are still so many who accuse any who point to this long standing New World Order plan, extensively documented and spoken about by political leaders for generations, of being so called conspiracy theorists. One wonders if these people can read.

Referencing the COVID 19 opportunities, one of the founders, and current executive chairman, of the WEF Klaus Schwab recently wrote:

A sharp economic downturn has already begun, and we could be facing the worst depression since the 1930s. But, while this outcome is likely, it is not unavoidable. To achieve a better outcome, the world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts and working conditions. Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed. In short, we need a “Great Reset” of capitalism.

Capitalism requires a reset because the model of closed shop crony capitalism, operated by the global parasite class for centuries, has reached the limits of growth. Therefore they need to create a new economic paradigm (the Great Reset) both to further centralise and consolidate their power and to fix their failing business model.

Following the 2008 banking collapse, while the people were forced to suffer austerity to bail out the banks with a form of highly selective crony socialism, the parasite class simply carried on piling up the debt.

In the Basel Capital Accords III, supposedly designed to stop the wild market speculations of banks which caused the collapse, they effectively reduced the liquidity (capital reserve) requirements for banks, allowing them to lend even more.

This process of allowing banks to create FIAT currency out of nothing has inevitably led to a global debt of approximately $260 trillion, which is more than three times the size of the planets GDP.

However, this is small potatoes compared to the scale of the financial products derivatives market. Estimated to be somewhere between $600 trillion to more than $1 quadrillion. While some say this is only the notional amount of the debt tied up in derivative contracts, the fact remains this is all debt.

Cumulatively, there isn’t enough productivity on Earth even to service the interest on these debts, let alone pay them. Ultimately this is debt owed to the oligarchs who control the world’s system of central banks. It is a Mickey Mouse system allowing monopolists to seize assets using their own funny money.

While the power to create all FIAT currency, out of nothing but debt creation, has afforded them immense economic and political control, 2008 demonstrated that their usury fraud can, and certainly will, collapse. Hence the Great Reset. Responding to a pandemic, or saving lives, has nothing to do with it.

The process of transition, laid out by the WEF as the Great Reset, builds upon the sustainable development goals of the U.N’s Agenda 2030. Founded upon the generational eugenicist ideology of the NWO oligarchs, the new global governance system will be a technocracy.

While Technocracy, rule by technocrats appointed or elected for their particular expertise, may sound appealing to some, the model proposed relies upon the destruction of nations states to be replaced by a distant global technocratic order that serves only the interests of its founding oligarchs and financial benefactors.

This technocratic system was outlined in 1974 by former US ambassador Richard N. Gardner, member of the CFR and the Trilateral Commission, in his article The Hard Road To World Order:

Never has there been such widespread recognition by the world’s intellectual leadership of the necessity for cooperation and planning on a truly global basis. Never has there been such an extraordinary growth in the constructive potential of transnational private organizations - not just multinational corporations but international associations of every kind in which like-minded persons around the world weave effective patterns of global action...


The hope for the foreseeable future lies, not in building up a few ambitious central institutions of universal membership and general jurisdiction... but rather in... inventing or adapting institutions of limited jurisdiction and selected membership to deal with specific problems on a case-by-case basis... providing methods for changing the law and enforcing it as it changes and developing the perception of common interests...

In short, the “house of world order” will have to be built from the bottom up rather than from the top down ...

...but an end run around national sovereignty, eroding it piece by piece, will accomplish much more than the old-fashioned frontal assault.

The institutions of limited jurisdiction, such as the IPCC and WHO, are already in place directing national government policy across the world. In Britain, it is the role of the UK State to deliver the obligatory policy changes in order to erode national sovereignty and create the global governance technocracy. All globalist states are essentially unconstitutional and treasonous.

The common interest, determined by the technocrat class at the behest of their corporate oligarch paymasters, is currently replacing individual liberties and freedoms. The human being is becoming little more than a unit to be managed and directed and, where necessary, disposed of.

Inalienable human rights are being ignored utterly in pursuit of the common interest.

The global COVID 19 crisis is a catalysing event which has been misused to bring about the Great Reset. In order to convince the people to comply with their orders, the UK State has inculcated the population into a state of fear.

States around the world have practised social engineering using deception, by proselytising an unquestioning faith in an illusory form of science (scientism), behaviour modification, unlawful regulation and propaganda. They have used their obedient MSM to convince their peoples that the threat of COVID 19 is significantly greater than it actually is.

In Part 2 we will focus on the deception of the UK State. However, the same can be said for all other globalist states that have similarly responded to the claimed pandemic.

COVID 19 has been exploited in order to replace our inalienable human rights with an enforced obligation to obey public health orders. Public health has become biosecurity and there is no longer any such thing as a healthy human being. All humans are now biohazards and biohazards must be controlled or removed from society for the common good.

With the British people living in unwarranted fear, the UK State has been able to introduce draconian anti-democratic (quite literally) legislation.

In other circumstances this would have been impossible without significant revolt. Terrorising the public was essential to convince them to believe that the State had to remove all their rights and freedoms in order to keep them safe.

Initially deceiving the public that the “emergency measures” would be temporary, further behaviour modification was then used to force people to comply with a lengthening list of totalitarian regulations. The objective was to move people towards passively accepting the dictatorship of a surveillance state re-branded as “the new normal.” Thus far, it appears most people have been sufficiently frightened to meekly accept their enslavement.

Throughout the Great Reset transition, the public face of the globalist project has been Bill Gates. However, while Gates has used his wealth to seize control of global public health policy, he is just the current front man for World Order 2.0. It is the technological possibilities presented by the 4th Industrial Revolution which the architects of the world order are capitalising upon.

For example, while there is no evidence that COVID 19 can be spread by handling cash, the MSM have repeatedly floated the idea. This is no surprise. the BBC are among the many media organisations directly funded by the BMGF.

Pilot schemes, such as the BMGF backed West African Wellness Pass, are already underway. By linking biometric identification, along the lines of the BMGF funded, Rockefeller and U.N backed ID 2020, with cashless payment systems, all transactions can be centrally controlled in the rapidly approaching cashless society.

When your biometric identity includes your vaccine immunity status, there will be no necessity to legislate to make vaccines “compulsory.” Thus avoiding any contentious public debate. As long as you fully comply with your orders, you will be allowed controlled access to social and economic activity.

Systems like immunity passport and vaccine certificates will be used to control freedom of movement, the right to work and to access services and the community. As described by world order spokesman Bill Gates:

Eventually we will have some digital certificates to show who has recovered or been tested recently or when we have a vaccine who has received it.”

While vaccines may not be compulsory you won’t realistically be able to participate in society, employment, run a business or receive benefits, without the appropriate vaccine or immunity status.

The BMGF have already invested more than $21 million in an MIT project to create a microneedle vaccine delivery system that will inject a reactive die under the recipients skin which can then be scanned by a reader. This pattern will act like an indelible bar code tattoo, enabling the global authorities to monitor and control your whereabouts and behaviour.

The New Zealand State has already decided to remove people from their homes and place them in quarantine facilities (detention centres controlled by the military).

With an estimated population of 5 million and just 22 alleged deaths from COVID 19 in the entire country (a population mortality risk of 0.0004%), and no deaths at all for nearly three months, clearly these measures are not a response to any genuine threat from COVID 19.

Having complete control over the testing and attribution of disease status affords the biosecurity State the power to potentially remove and detain its political enemies and dissenters without trial. Those ordered to enforce biosecurity, in the “new normal,” have exactly the same degree of authoritarian power that was invested in similar rights abusers such as the Gestapo and the Stasi. Does history ever teach us anything?

This quarantine policy in New Zealand is designed to maintain the level of fear and accustom the population to dictatorship. It also appears to be a provocation that may encourage insurrection and revolt. With a monopoly on violence and the use of force, violent uprisings invariably benefit the authoritarian State. It allows them to claim legitimacy for an even more oppressive “crack down.”

Thus far, the global response to COVID 19 has deviated little from the Rockefeller’s suggested Lockstep scenario in their 2010 report Scenarios for the Future of Technology and International Development.

Like Event 201, this is another example of the quite extraordinary prescience of the people who form global governance policy. They can not only predict, in almost perfect detail, what the media will discover and report, but also nature itself.

Removing the “infected” from their homes and incarcerating them in detention centres mirrors the policy suggestion of Dr Michael Ryan from the WHO. While New Zealand is the first nominally democratic state to raid family homes and remove people by force, it certainly won’t be the last. The UK State has already given itself the power to do so in the Health Protections (Coronavirus) Regulations 2020.

World economic activity will be administered by biosecurity States and based upon sustainable development goals. This new, centrally planned, global economy will be restricted only to permitted businesses.

Prior to his departure as governor of the Bank of England, in lockstep with the Great Reset, Mark Carney warned that companies that don’t follow the correct sustainability policies, “will go bankrupt without question.” In other words, lines of credit, without which business cannot hope to function, will be limited only to those who adopt the approved polices.

This new economy will have very limited employment. Carney’s successor Andrew Bailey has already stated that it would be important not to keep people in “unproductive jobs” and that job losses, as a result of the COVID 19 crisis, were inevitable.

They would not have been inevitable had globalist State’s, like the UK, not responded to the crisis by shutting down the world’s productive economy.

The preposterous spin of the bankers and carefully chosen economists that the UK will simply bounce back from an unprecedented 20% drop in GDP is absurd. With official UK unemployment of 2.7 million, more than doubling in a single year, these numbers are merely the tip of a very large, looming iceberg.

There are currently an additional estimated 7.8 million British workers furloughed. That scheme is due to end in a couple of months. The management consultancy firm McKinsey & Company estimate that 7.6 million UK jobs are at risk.

This will, as ever, disproportionately impact the lowest paid, with analysis suggesting that more than 50% of those at risk of unemployment are already in jobs paying less than £10 per hour.

These are the unproductive jobs and livelihoods Bailey wants to get rid of. Across Europe and the Americas staggering levels of unemployment are seemingly unavoidable. It is not unreasonable to envisage at least 6 million long term unemployed in the UK. With the same pattern common to many developed nations, the social, economic and health impacts of this are almost beyond comprehension.

Many have long been warning, that the toll taken by the Lockdown response to the supposed COVID 19 pandemic will be far worse than the disease itself. This awful prospect is becoming increasingly apparent.

There is no reason to believe official UK COVID 19 statistics, something we’ll discuss in Part 2. However, even if we accept that more than 41,000 people have died as a direct result of COVID 19, this sad loss is likely to be relatively inconsequential compared to the loss of life as a direct result of the UK State’s Lockdown policy.

It is important to recognise that the global lockdown response was a political choice made to create the economic condition for the Great Reset. It was not unavoidable, and there is no evidence that lockdowns make any difference to COVID 19 mortality. South Korea, Japan and Sweden did not impose full lockdowns and all have better COVID 19 outcomes that the UK.

Research by the UK Department of Health, the Office of National Statistics (ONS), the government’s Actuary Department and the UK Home Office estimates that 200,000 people could die as a result of re-orientating the NHS, to treat COVID 19 and little else, and from the economic effects of Lockdown polices. Unfortunately, this “worst case” scenario appears conservative.

An example of the derisory “scientism” used to terrorise the population, in April the University of Glasgow published a study estimating average years of life lost (YLL) for individuals who allegedly died from COVID 19. Saying these were alleged deaths does not imply that no one died from COVID 19, only that we really have no idea how many.

Nonetheless, using quite bizarre methodology, the Glasgow researchers managed to calculate that the median YYL due to COVID 19 was 13 years for men and 11 years for women. This study was based upon analysis of the outbreak in Italy, but was cited by the UK MSM to scare the British. More than 59% of supposed COVID 19 decedents in Italy were over 80 years old.

Current median life expectancy in the UK is 80 years for males and 83 years for females. Nearly 60% of those who have died from COVID 19 in the UK were over 80 years old and 20% were over 90 years old.

Analysis from the National Records of Scotland (NRS) shows that median age of death, supposedly from COVID 19, was 81 for men and 85 for woman. Statistically indistinguishable from quite normal mortality.

The University of Glasgow researchers are funded by the Wellcome Trust who are the tax exempt philanthropic foundation of the multinational pharmaceutical giant GlaxoSmithKline. The University of Glasgow are also grant recipients of the COVID 19 Therapeutics Accelerator established by the Wellcome Trust, Mastercard and the BMGF.

The Wellcome Trust and the BMGF want the world to be vaccinated with their experimental COVID 19 vaccines. Despite the fact that decades of trying have failed to produce a successful vaccine against SARS, or indeed for any coronavirus strain, and that usually vaccine development takes at least 10 years, GSK and the BMGF are among those who, for some apparently inexplicable reason, are confident they can produce a successful vaccine for SARS-CoV-2 in a matter of months.

Obviously there is a huge conflict of financial interest at the heart of the University of Glasgow’s spurious claims about YLL’s. Pointing out this fact makes you a conspiracy theorist. Though ignoring it requires either a considerable degree of gullibility or a wilful intent to deceive.

Between 2001 and 2016 economic and social deprivation in England consistently accounted for a genuinely alarming 9.3 year average reduced life expectancy (YLL’s) for males and, by 2016, shortened women’s lives by 7.4 years. The economic devastation that will be wrought by the entirely unnecessary Lockdown policy of the UK State, and others, measured in YLL’s, will dwarf those lost to COVID 19.

This is the price we will all pay for the parasite class’ determination to bring about the Great Reset and change the world’s economy and society to one centrally planned and controlled absolutely by them. They are currently spending billions globally on propaganda to convince us to accept their “new normal.”

They require our consent if their plans are going to work. This means, in order to scupper them, all we need to do is refuse to comply. While peaceful protest is an important unifying right, ultimately it is what we do every day that will make the difference. There is a nasty, fascist authoritarianism building in the UK, and elsewhere. Yet all we need to do in order to defeat it is refuse, en masse, to follow its orders.

Unfortunately, the UK State are among those throwing everything at convincing us to believe their frankly ridiculous, scientifically illiterate, COVID 19 propaganda narrative. We only need wander to the local supermarket and witness the faceless, muzzled majority to know the deception is working.

We are faced with an existential choice. We can either give up any childish pretensions that we live in a free and open democratic society that values liberty and plurality of opinion, and accept the fascist dictatorial rule of a global technocratic parasite, or we can exercise conscious resistance and refuse to comply with the orders of the State.

In Part 2, we will dissect the mechanism of the UK State’s scamdemic. While Lockdown policies originate at a global level, by looking at how the UK State has implemented them, and the deception they have used to convince the public to accept them, the true nature of the scamdemic can be revealed.

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Hairy polymer balls help get genetic blueprints inside T-cells for blood cancer therapy

Tokyo, Japan – Scientists from Tokyo Metropolitan University have realized a new polymer that can effectively transport plasmid DNA into T-cells during…



Tokyo, Japan – Scientists from Tokyo Metropolitan University have realized a new polymer that can effectively transport plasmid DNA into T-cells during chimeric antigen receptor (CAR) T-cell therapy, a key treatment for blood cancer. Importantly, it can get genes into floating T-cells, not only ones fixed to surfaces. It is stable, non-toxic, and doesn’t use viruses. It outperforms polyion compounds considered a gold standard in the field, paving the way for new therapies.

Credit: Tokyo Metropolitan University

Tokyo, Japan – Scientists from Tokyo Metropolitan University have realized a new polymer that can effectively transport plasmid DNA into T-cells during chimeric antigen receptor (CAR) T-cell therapy, a key treatment for blood cancer. Importantly, it can get genes into floating T-cells, not only ones fixed to surfaces. It is stable, non-toxic, and doesn’t use viruses. It outperforms polyion compounds considered a gold standard in the field, paving the way for new therapies.

T-cells, or lymphocytes, are a type of white blood cell that helps our immune system fight germs and protect us from disease. Recently, technology has become available that helps reprogram T-cells to fight cancer. Chimeric antigen receptor (CAR) T-cell therapy works by introducing new genes into T-cells; these new “instructions” help create receptors on the cell surface which can bind to cancer cells, effectively making cancer cells a prime target for our own immune systems.

The key step in the process is effectively delivering DNA, the genetic blueprint, into T-cells taken from a patient, in a process known as ex-vivo transfection. Many methods use viruses, which are naturally good at delivering genes. However, this has its own set of problems, as there are safety concerns around the viruses themselves, and our immune system might attack them outright. That is why researchers are turning to alternative means, specifically polyion complex (PICs), where large polymer structures bind DNA and help carry it into T-cells. However, PICs are known to only be able to get genes into T-cells bound to surfaces, not floating around as they would in a normal sample.

Now, a team led by Professor Shoichiro Asayama from Tokyo Metropolitan University have created a new polymer compound that can effectively get plasmid DNA (pDNA) into floating T-cells. They used a dendrimer, large polymers with a branching structure that resembles a hairy ball. Specifically, they used a second generation polyamidoamine (PAMAM-G2); second generation, in this case, refers to the number of times new branches are formed going out from the central structure. Experimenting with modifications to the ends of the branches, they found that they could realize a wide range of binding behavior of pDNA to PAMAM-G2.

In particular, the team found that PAMAM-G2 with a specific ratio of primary amine groups at the ends of branches replaced by highly basic guanidine (Gu) groups produced excellent carriers for pDNA. PAMAM-G2-Gu had a very high charge and were the right size for macropinocytosis, a common mechanism whereby cells “swallow” and incorporate outside material. With the right recipe, the PICs were also non-toxic and stable in blood plasma. Crucially, PAMAM-G2-Gu(53) (53% replacement by guanidine) significantly out-performed branched poly(ethylenimine) or bPEI, a gold standard PIC for gene transfection, in tests on floating T-cells.

Given their low toxicity and outstanding carrier properties, the team believe they have a viable candidate for ex-vivo transfection in the next generation of CAR T-cell treatments, a crucial therapy option for sufferers of a wide range of life-threatening illnesses.

This work was partially supported by a Grant-in-Aid for Scientific Research (B) from the Japan Society for the Promotion of Science (JSPS KAKENHI Grant Number 21H03820).

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A Timeline Of US Government Shutdowns

A Timeline Of US Government Shutdowns

The 2018/19 shutdown was the longest in recent U.S. history at 34 days. 

As Statista’s Katharina…



A Timeline Of US Government Shutdowns

The 2018/19 shutdown was the longest in recent U.S. history at 34 days. 

As Statista's Katharina Buchholz shows in the timeline below, government shutdowns have been getting longer in the last three decades, with the second-longest and the fourth-longest shutdown taking place in 1995 and 2013, respectively.

You will find more infographics at Statista

Throughout the 1980s, shutdowns were numerous, but shorter, while in the 1970s, they also ran somewhat longer, but only surpassed two weeks once, in 1978. Government shutdowns aren't all that rare: Since 1976, there have been 20 shutdowns that lasted an average of 8 days.

Currently, the threat of yet another government shutdown is looming large in the United States.

Despite bipartisan efforts to buy time with a bill that would fund the government through November 17, a small group of hardliner House Republicans has been using its party's slim majority in the chamber to put pressure on its own leadership. This has so far undercut last-minute funding efforts through the so-called stopgap bill, all while debate to pass actual 2023/34 budget legislation in the House is also leading nowhere. Unless the status quo changes, the federal U.S. government will shut down on 12.01 a.m. Sunday morning.

Tyler Durden Fri, 09/29/2023 - 23:20

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Macleod: The End Of The Road For The Dollar

Macleod: The End Of The Road For The Dollar

Authored by Alasdair Macleod,

With the Asian hegemons undoubtedly able to introduce gold standards,…



Macleod: The End Of The Road For The Dollar

Authored by Alasdair Macleod,

With the Asian hegemons undoubtedly able to introduce gold standards, where does that leave the dollar?

This article describes just how precarious the fiat dollar’s position has become.

For now, the dollar appears to be buoyed up by rising bond yields. However, as they rise further portfolio losses for foreign investors are likely to increase, leading to dollar liquidation. It is not generally realised how many dollars and dollar securities are owned by foreigners, the bulk of them being held outside the US banking system. And the quantity of foreign currency owned by Americans to absorb this selling is very small in comparison.

Higher interest rates and bond yields also threaten to destabilise the banking system, a problem equally faced by the Eurozone, the UK, and Japan. But how can the US Government protect itself from this danger?

The only answer is to admit to the end of the fiat era and put the dollar back onto a gold standard. However, the US Government does not have the mandate to take the required actions and officially at least is still in denial over the need to stabilise the currency. The legal position referring to the constitution is briefly touched upon, because laws will have to be considered to secure the dollar’s future.

Unfortunately, the US Treasury’s gold holdings are almost certainly compromised. Furthermore, since the Asian hegemons have accumulated substantial holdings of bullion in addition to their official reserves, there is bound to be a strong reluctance to hand economic power to Russia and China by endorsing a return to gold standards.

My conclusion is that the era of the fiat dollar based global currency system is rapidly ending, and for America and the dollar there can be no Plan B. It will almost certainly lead to  the end of the fiat dollar, and the end of the US hegemony.


It is dawning on increasing numbers of analysts that the era of the fiat dollar might be drawing to a close. Very few investment professionals know what to expect. Being thoroughly Keynesian in outlook, most still believe that by the Fed managing interest rates consumer price inflation can be contained and that recessions can also be avoided by expanding fiscal deficits. But the contradictions arising from a deteriorating economic outlook and CPI inflation continually rising completely scuppers these macroeconomic theories. Blaming it on Russia and OPEC+ is tempting, but not a good enough argument.

It is becoming clear that fiat currencies have become increasingly unstable. The only solution for the dollar is to fix the value of credit: but to what? It has been gold or silver throughout the history of national economies. But a denial of returning to exchanging the dollar for a fixed quantity of gold is so systemically embedded in the administration that it is difficult to see this solution even as a last resort.

In this article I look at the background to what is sure to become a dollar crisis. The urgency of this matter has been brought forward by America’s declining global influence compared with that of the Asian hegemons, and the US Government’s profligacy. Almost certainly, exposure to the dollar will be unwound by foreign actors, and that exposure, which must include dollar credit originated outside the US banking system is colossal. The table below illustrates the approximate position.

To summarise the evidence, foreigners own or are exposed to a massive $137 trillion dollars. As a cohort, if they decide to begin reducing their exposure US residents have less than a trillion equivalent in foreign currencies to sell in exchange. In the jargon of the markets, the dollar will become “offered only”.

This is the true danger from rising interest rates. As they rise, the declining value of foreign-owned long-term securities totalling $37 trillion will simply accelerate generating widespread investment and dollar liquidation. This will not be offset by US holders of foreign investments liquidating their positions for a simple reason.

US holders of foreign securities hold almost all of them in ADR form, being listed and priced in dollars. In a rising interest rate environment, they will also be declining in value and so we can expect US investors to sell them as well. The sale of an ADR does not lead to a sale of an underlying foreign currency, whereas a sale of a dollar security by a foreign holder will almost certainly do so – unless the foreign investor cohort overall is content to add to its holdings of short-term dollar securities.

Foreign liquidation of dollar investments is a largely unseen danger to the dollar by US-centric commentators who are stuck with the belief that foreigners need to accumulate them. A further rise in interest rates or bond yields, which appears to be underway, far from protecting the dollar will almost certainly lead to portfolio liquidation, dollar liquidation, and therefore its collapse, there being almost no foreign currency in US residents’ hands to absorb it.

And finally, in the run up to a presidential election year it is becoming clear that the US’s proxy war against Russia is turning into a political and military disaster. Ukraine is running out of men, and Russia is reaping the benefit of western-imposed sanctions. Disagreements between NATO members are beginning to surface.

What will that do to the dollar’s credibility? It all feels like a fin de siècle, the end of the fiat era and the beginning of a new currency regime.

The background to a new dollar crisis

It is never wise to pursue political and economic policies to the end of the road. But that is what the US Government appears to be doing.

In 1971, having embarked on a policy of replacing gold with the dollar as everyone’s currency and valuation standard, there is every reason to fear that for the US Government to return its fiat dollar to sound money is politically impossible. The reasons this might now matter are twofold: the dollar is losing its grip as the world’s reserve currency, and interest rates are rising into a recession which could turn into a slump, destabilising the mountain of debt which is the other side of too much unproductive credit intermediated by over-leveraged banks.

In previous articles, I have shown the importance of anchoring the value of credit to gold to ensure its stability, particularly at a time when credit’s instability becomes beyond the state’s control. Such a time has clearly arrived. I have described the practicalities of how to do it, which is to simply ensure that a currency is freely convertible into gold coin and bullion. A modern version of this has been proved to work time and again in the form of currency boards recommended and implemented for a number of governments by Professor Steve Hanke, tying collapsing currencies to a relatively stable dollar. But the dollar itself is now becoming highly unstable.

For the US Government, the urgency of considering a gold standard for the dollar is now upon it, because the Asian hegemons — Russia and China — are in a position to put their roubles and yuan on rock-solid gold standards. The ease with which Russia can do this was demonstrated in my recent article, here. Furthermore, it is increasingly in Russia’s interest to take this step. But if Russia does so, it is bound to fatally undermine the fiat dollar’s position. And it is not widely realised that China is again encouraging its citizens to buy gold. This is from the Jerusalem Post on 7 June:

“Last week an event occurred which was completely missed by the mainstream media. The People’s Bank of China (PBOC) took the next important step to encourage a wider and less wealthy section of Chinese citizens to purchase gold and silver bullion. The PBOC opened the facility for citizens to convert renminbi cash savings held in the public’s own bank accounts to be converted into physical gold at the click of a button.”

Does that indicate that China feels the time has come to protect even her poorer citizens and the yuan from global currency instability?

Perhaps the hegemons are positioning themselves. While putting the rouble onto a gold standard would be seen as an act of extreme monetary aggression against the fiat dollar, Russia urgently needs to stabilise her currency. In a dollar-centric world suffused with anti-Russian propaganda, any weakness in the dollar is simply multiplied in the rouble exchange rate. This the flaw in Putin’s agreement with Saudi Arabia to drive up energy prices. As I put it in the article referenced above, if they shiver in Germany, they will freeze in Russia: that is without massive energy subsidies for the Russian people.

Feedback from readers exposes an erroneous belief that it is the trade balance which matters. They correctly say that higher energy prices improve Russia’s balance of trade. So why should the rouble’s exchange rate not benefit? The answer is that the purchasing power of a fiat currency depends totally in the belief in its validity as a medium of exchange. And while it is true that Russia’s exports benefit from higher oil and gas prices, in a global inflation crisis such as we now face, the rouble’s credibility is unlikely to improve, particularly when it is off-limits for western speculators and the Russians are demonised in capital markets.

Therefore, we should assume that Russia will be forced to take meaningful steps to stabilise the rouble, which can only be done by returning the rouble to a gold standard. Furthermore, Russia’s economy has the low tax environment that would benefit hugely from interest rates that reflect gold as money as opposed to fiat roubles. From an interest rate on one-year rouble credit currently at 16% we can expect this to decline towards 3% over not very much time with enormous economic benefits. There is evidence that senior Russians, including Putin, understand this point.

If only the US could achieve similar benefits from sound money! Unfortunately, it requires a totally different political, strategic, and economic mindset to those currently operating in Washington and Langley. Instead, the Keynesian playbook is for the state to increase its fiscal and monetary support for the economy to prevent it running into a recession. And policy makers are more informed in their policies by the recent price stability at lower interest rates than the instability of the 1970s when the fiat dollar was bedding in. They believe that the consumer price inflation problem is exogenous and not the consequence of earlier monetary policies. And they aver that a period of current interest rates, or at least levels not much higher, will be sufficient to return CPI inflation towards the 2% mandated target.

America is trapped in a political and economic version of Stockholm syndrome. But there are some influential analysts who are beginning to see this as wishful thinking, and that energy prices in particular are not only going higher but will continue to do so. This creeping suspicion is likely to permeate official thinking over time and in the light of developments.

As part of this enlightenment, JPMorgan’s Global Equity Research unit is now forecasting $150 prices for Brent. The consequences for heating oil and diesel prices are particularly pernicious. These values are already rising, as the snapshot of energy and commodity price moves over the last three months indicates.

Other prices rising ahead of the US winter include some basic foodstuffs, indicating that any move towards CPI normality is a long way off. And then there is the widespread ignorance that surrounds the consequences of the bank credit cycle which is entering its contractionary phase. The effects are to wrest control over interest rates from central bankers, as desperate borrowers with deteriorating cash flows scramble for scarce credit: they will simply have to pay up to remain in business.

The consequences of the credit cycle

It is too simplistic an argument to blame depressions, slumps, and recessions on the failings of the private sector. The cause is always a contraction of credit. But that is created by a previous overexpansion of bank credit and by its nature is a correction of a previous condition. The greater and the longer the expansion is prolonged, the more destructive the contraction that follows.

Ignoring this reality, Keynes and others invested in a role for governments to intervene in economic affairs. It required the eventual abandonment of sound money. The original idea was for governments to take up the recessionary slack, stimulating the economy by deliberately running a budget deficit, and recovering public finances subsequently through increased tax revenues when the economy recovers. By these means, it was believed that recessions would be minimised, and government finances would be balanced over the economic cycle.

It was an argument which was applied with apparent success in the post-war years until the end of the Bretton Woods Agreement, when the inflation of the dollar’s M3 had doubled from $27bn in July 1950 to $59bn in August 1971, without the inflationary consequences that followed the suspension of Bretton Woods.

When the Bretton Woods Agreement began to fall apart following the failure of the London gold pool in the late sixties, for America’s high priests of macroeconomics the strictures of a gold standard straitjacket were the problem, not the failures of their economic and monetary theories. Bretton Woods was abandoned, and ever since government-inspired economic theory has doubled down on failure. The FRED chart of the US’s budget position illustrates the consequences of every time things go wrong, blame free markets and just double down on a policy of government stimulation by fiscal deficits.

To put these deficits into context, in fiscal 2021, Federal Government outlays were $6.822 trillion, and revenues were $4.047 trillion. In other words, the deficit on expenditure was 31.4% of revenue. After a brief recovery in fiscal 2022, the current fiscal year which is ending shortly will see a further deterioration in the deficit to $2 trillion. But with the prospect of a now widely expected recession and interest rates higher for longer, fiscal 2024’s deficit will likely be significantly worse.

Clearly, with recession expected and despite record government deficits, the Keynesian stimulation theory has run its course and has failed completely. But that is not all. Lower interest rates are meant to rouse an economy, and in that they have also failed. Macroeconomic theories become so far removed from economic reality that the whole establishment of the economic profession needs to reset its approach to free markets.

The cyclical problem of bank credit

One of the extraordinary failures of modern thinking concerns an almost total blindness to the cyclicality of bank lending. And what is nominal GDP, which is used to measure economic performance? It is no more nor no less than the deployment of credit for qualifying transactions making up GDP. Yet no one appears to understand the consequences of this important fact. GDP rises and falls, not driven by consumers but by changes in the availability of bank credit. Consumer behaviour is not the source of recessions in consumer activity; it is the availability of the credit that drives it.

Those who do not understand the cycle of bank credit and its implications are the large majority of economic actors, both in the financial and non-financial sectors. And the most stubborn cohort of deniers is to be found in governments and their bureaucrats. From the major central banks to banking regulators, a group-thinking blindness to the causes of regular booms and busts is the source of an evolving cyclical credit crisis. Unfortunately, if a government and its agents continue with wrong policies for long enough, instead of being derided public belief in them grows. It is a particular problem in capital markets which have now bought into central bank group thinking policies without reservation.

Bank executives are not immune to this trend. Consequently, instead of sticking to their business objectives properly, they are beholden to central banks and government regulators. Their true business is to be dealers in credit, not to bear responsibility for those who claim to be stakeholders and regulators, but to achieve returns for their shareholders.

Few bankers seem to realise that they are trapped in a cycle of bank credit of their own creation. That is why the cycle has existed for as long as credit statistics have been available. But combine a lack of understanding of the cause of the cycle with the absence of shareholder responsibility, and we can expect the management of large banks to think that with regulatory support they can trade their way out of economic downturns by simply adhering to the regulations. The few banks that have failed this time have been dealt with by the regulators, restoring faith in the regulatory regime for the others.

But when bankers have the wake-up call, that their balance sheets are over-leveraged and producer input prices are rising, unless they urgently reduce their lending exposure they will risk bankruptcy from bad debts and falling collateral values. That is why bank lending is contracting, and why in real terms GDP will decline. And the contraction of GDP feeds into yet more credit contraction, driving up borrowing costs. The pressure on banks to liquidate both on-balance sheet investments and collateral against loans is bound to intensify.

The pressure on the dollar from foreign holders selling down their exposure will naturally follow. As seen in the table in the introduction to this article, the pressure on the dollar from these combined events threaten its continuing existence. Other than accepting the reintroduction of a credible gold standard, what fiscal measures will be required to make a gold standard sustainable?

Cutting out excess spending

The current fiscal year, which ends on 30 September will see a deficit on US Government spending of $2 trillion. $Nearly one trillion of that is debt interest:

The way that debt interest has soared indicates that the US Government is already in a debt trap. Furthermore, in its last estimates of debt interest costs (May 2023), the Congressional Budget Office assumed that the average interest rate on debt held by the public in this fiscal year would be only 2.7%, and in 2024 2.9%. With 3-month T-bills already yielding 4.8% and 10-year Treasury notes over 4.5%, these forecasts are already out of date. And with a recession now more certain than at the time of the CBO’s forecast, on current spending plans plus the fall in tax revenues the budget deficit for 2024 is headed for over $2.5 trillion, even assuming no further rises to borrowing costs. But they are likely to rise to over $1.5 trillion, taking the likely deficit into covid lockdown territory.

In the fiscal year just ending, the average rate of interest paid works out at 2.9%, which compares with a current rate in excess of 4.5%. The consequences of deteriorating tax revenues, increasing welfare costs, rising price inflation, yet higher bond yields, a credit squeeze, and the refinancing of $7.6 trillion of existing debt make the current position unsustainable.

The best solution is to radically cut spending. But given the scale of the problem as part of the solution taxes might have to be increased as well, though the emphasis must be on spending cuts. If there was time to implement these cuts, they could be spread over a few years, but time is of the essence.

Otherwise, the US Government will merely fall deeper and deeper into its debt trap.

This will be the minimum required for the US Government to put its finances in order and to implement and maintain a gold standard for the dollar. Contrary to Keynesian theory, the economic benefits of balancing the budget would be substantial. This was proved in the UK when 364 Keynesian economists signed a letter to London’s The Times criticising the 1981 budget. In that case, at a time of rising unemployment, high inflation and recession, Chancellor Geoffrey Howe raised taxes to close the budget gap. This represented 2% of GDP, which compares with a prospective US deficit of over 9% of GDP. The Keynesian economists opined that tightening monetary policy at a time of recession was wrong. But no sooner was the letter published, than the economy began to improve.

Admittedly, the British deficit as a proportion of the total economy was far less than that faced by the US Government today. But the disproving of Keynesian theories of deficit stimulation, and the benefit to the economy of a balanced budget cannot be denied. Furthermore, if in balancing the budget expenditure is cut allowing taxpayers to keep more of their earnings, the economic benefits are even more obvious. Hence, the recommendation that as much as possible the reduction in government spending is the best way to balance the budget and achieve a better economic outlook.

Not only will balanced budgets have to be run thereafter but spending must be firmly capped in nominal terms. A free market, non-interventionist philosophy must replace state intervention and management of the economy. Central bank credit must be contained, and commercial bank credit allowed to respond to demand for productive credit.

Business must be permitted to dance to the tune of consumers, and not the regulators. Bad businesses hide behind regulation, which through licencing disadvantages competition. Regulators are not motivated by what the consumer wants and is often ignorant of his trade. They produce unnecessary bureaucracy. Where they exist to deter fraudulent and unfair practices, they rarely succeed. Not only should consumers be free to choose the products that they want, but they must be responsible for their actions. The idea that the state can replace the principle of caveat emptor is ridiculous.

The same goes for trade. Traditionally, trade tariffs have been a source of government revenue, but they have evolved into politically driven means of penalising nations which are successful exporters in favour of protecting uncompetitive domestic production. This disadvantages the domestic consumer and manufacturers sourcing raw materials and machinery from abroad.

The setting of interest rates must be to regulate the balance of gold reserves, and not, repeat not to regulate the economy. The source of investment capital in the form of savings should be permitted to return, encouraged by removing all taxation from savings and trading profits. Consumer debt, other than mortgage finance, will wither under these conditions. A savings driven economy, such as Japan’s and China’s, is less prone to consumer price inflation and interest rate volatility. And if savings are not taxed, they become encouraged.

And lastly, government statistics should be banned, because they only serve to encourage state intervention. If there is demand for any particular run of statistics, then private sector actors can provide them.

The US faces problems with a gold standard

As a matter of fact, gold as money is written into the US constitution as well as in the definition of the dollar. It will surprise readers to know that what commonly circulates as dollars are not dollars at all, being Federal Reserve Notes (FRNs). Under constitutional law, United States money is expressed in dollars, while FRNs are redeemable in dollars which is the lawful money. Therefore, the FRN dollar bills in circulation are not lawful money.

It might seem a pedantic point perhaps, but it should be respected and addressed in any future legislation. And the dollar itself was defined in gold. Article 1 Sec. 10, Clause 1 of the Constitution states:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts…

There is much to unpack in this clause, but it is money that concerns us. In 1785, Congress unanimously resolved that the money unit of the United States was to be the dollar and that the dollar would contain 375.64 grains of fine silver. The same resolution determined that there shall be two gold coins, one equal to 10 dollars and one equal to 5 dollars. And subsequently under the Coinage Act of 1792, the coinage of gold Eagles was mandated, “each to the value of $10 containing 247.5 grains of pure gold”.

Dollars and dollar-substitutes such as the FRN were the medium for payment because they specifically represented gold and silver coin in the prescribed weights. In 1834, gold became the de facto standard, confirmed in the Coinage Act of 1900 at 23.22 grains of fine gold, the equivalent of $20.67 to the ounce, a standard that operated for nearly a century until 1933.

It would appear to be a simple matter to return to convertibility in accordance with the law, but instead of the earlier fixed weight, a new relationship would have to be determined for the constitutional dollar and the FRNs if they be permitted to continue to exist: the future of the Federal Reserve system must be called into question, having presided over a failed fiat currency of its own issuance. Either way, the Treasury’s promise to pay the equivalent in its gold reserves to the Fed at $42.22 to the ounce, must be addressed.

Some commentators posit that to define the dollar by weight of gold and to make it fully exchangeable requires a substantial devaluation of the dollar, perhaps to $5,000 or $10,000 per ounce of gold. And that in order to do so, it would be declared over a weekend. Presumably, it is thought that this new rate would ensure that gold would be redeemed for dollars, allowing a new gold exchange rate to operate without undermining the Treasury’s bullion reserves. This appears to be a muddled Keynesian way of thinking, in the belief that devaluation is necessary to ensure a favourable exchange rate with other currencies, whether exchangeable for gold or not, and to ensure there is sufficient economic stimulus to support the mountains of debt in the private sector. But it would also be a default on the US Government’s debt by devaluing it in terms of legal money, which is still gold despite current denials by the US authorities.

Such a substantial devaluation is clearly intended to allow headroom for the US Government to continue with its current fiscal and monetary policies. But without the fundamental reforms outlined in the previous section, it would probably be only a very short time before a devaluing dollar forces yet another reset. In short, it would fool no one for long.

Then there is the problem of verifying US official reserves, which at 8,134 tonnes have been almost unchanged since 1980. Rumours about their condition and the extent to which they actually exist makes them uncredible. To what extent have they been swapped and leased over the decades, if indeed they exist in bars of LBMA deliverable standards?

The experience of Germany seeking repatriation of some of its gold reserves stored as earmarked at the Federal Reserve Bank of New York rings alarm bells over the entire situation. And as long ago as 2002, Frank Veneroso, who was a highly respected analyst at the time concluded that between 10,000—14,000 tonnes of central bank gold reserves had been either swapped or leased and sold into the market. The latter figure was half the declared official reserves of the entire world.

Since then, the leasing game and price suppression of gold has certainly continued. But there is a difference today, with increasing numbers of central banks accumulating bullion reserves, currently recorded at 35,731 tonnes. Much of this increase has to do with China, Russia, and their rapidly expanding spheres of influence, who do not lease or swap their gold reserves. Germany’s experience of the US idea of property ownership of gold, and the Bank of England refusing to deliver Venezuela’s gold when demanded plus the leasing shell game amounts to strong circumstantial evidence that the US Treasury and the New York Fed vaults do not have the gold they say they have.

This in itself suggests that there really is almost nothing backing the fiat dollar when the fall-back position becomes a return to gold as the money-anchor for credit. Furthermore, there is the geopolitics of gold to consider. Not only has Russia been accumulating bullion reserves, but informed sources believe that there is further bullion in state funds, bringing Russia’s holdings to about 12,000 tonnes. And China has had a policy of accumulating gold “off balance sheet” since 1983, accelerating mine output, importing large quantities of bullion, and not permitting any bullion to leave the country. Overnight, China could probably increase her official reserves to a level in excess of 30,000 tonnes.

We can be sure that the US’s intelligence services have an idea of this situation, and the geopolitical disadvantages to the US and its dollar of a return to gold as the monetary standard. In London, where the bullion banks offer unallocated gold accounts, a substantial rise in the gold price such as that recommended by some US analysts would lead to bankruptcies among the LBMA member banks with extremely serious consequences. And on Comex, it would be likely to lead to implementation of force majeure clauses.

The consequences for commodity prices from a de facto devaluation of the dollar would also be to drive them significantly higher. On all practical grounds, a substantial gold revaluation/devaluation of the dollar can be ruled out.


The hurdles in the way of the fiat dollar’s survival are steadily mounting, and the US Government does not know how to secure its future. The state theory of money is turning into a total failure. Interest rates, which more correctly are the time preference required to ensure foreign holders of dollars continue to hold them are rising. This tells us that markets expect the purchasing power of dollar credit to continue to decline, so if the monetary authorities attempt to stop them rising, the currency will fall, and foreigners will sell. Equally, as bond yields rise the value of all financial assets will decline, portfolios will be sold, and presumably the currency raised will be as well.

Either way, the days of the fiat dollar are numbered. The politicians have no mandate to protect it by balancing the budget, returning to a gold standard, and taking the economic measures necessary to make it stick. Furthermore, America’s existing bullion holdings appear to be badly compromised – the cupboard is bare.

Not only is it the end of the fiat federal dollar note, but it is the end of empire, which the administration is reluctant to accept. We must hope that some strategic sense prevails, and the Doctor Strangeloves at Langley do not have their way.

Tyler Durden Fri, 09/29/2023 - 22:05

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