Remember Fleetwood Mac’s 1980s pop hit? Tell me lies, Tell me sweet little lies (Tell me lies, tell me, tell me lies), Oh no, no you can’t disguise. If you still think inflation is transitory, then you might also think it will soon rain enough in the Sahara to generate hydroelectric power, or that 7.7 billion people can get enough energy from alternative sources to maintain the mining, production, and transportation industries with no further cost or disruptions. Inflation is here to stay, and we are not going back to the way things were before. Fact is the Sahara gets about three inches of rainfall in a year.
Am I being pessimistic? I think not! The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails. I’m a realist. What are you? I don’t sugarcoat anything, don’t get caught up in narratives, and I go out of my way to look for facts. It’s probably because at a certain point in my life, I made the mistake of getting mixed up with a psychopathic liar. This man lied about everything, just for fun. I had acquired hard cold facts and still couldn’t bring myself to believe that any human being could lie the way he did about everything, and for no good reason other than to paint an image of himself that was false.
By the time the relationship was over, I was hurt badly. I recovered, but like any deep injury, there are scars and scar tissue that is sensitive and flares up sometimes. The good news is I know now how to deal with psychopaths, for the most part. Basically, all manipulators use fantasy as a way to capture and abuse certain people. If you are not emotionally well, and someone comes along with a fantasy that will make you all better, then you are vulnerable to fall into it. In nature, we see how predators trick their prey, but somehow we don’t expect it from human beings. Truth is there are lots of human predators in the world.
After this toxic relationship was over, I started seeing the same abusive tactics from governments around the world. I’m sure they’d been lying for a long time; I just hadn’t noticed it before. Liars are people creating false narratives, painting false realities, or presenting false images of themselves for selfish reasons. They don’t let other people discover the truth; people trust them, and as a result they suffer or perish. Because I am not perfect, I’m still vulnerable to fantasy like anyone else, but I make a conscious effort now to stay in the facts. There are lots of fantasies in society that are hard to see. Want to change that? Stop talking so much and start asking questions. Listen. Challenge others to think critically about their behaviors and beliefs.
I can’t talk about money and inflation without talking about banks and how they’ve become so powerful. Central banks are the most powerful institutions on earth; they are much more powerful than governments. Where there is power, there is always corruption. Modern banking started with the Rothschild family. They gave a plethora of promissory notes to individuals and governments, creating a party-like borrowing frenzy. Then they tightened control of the system, and collected collateral through the obligation of contracts, when people defaulted on the terms of their loans. The Rothschild family did this over and again until a mounting of pressures led to war, and then they controlled the availability of currency. Governments that submitted their economies to Rothschild got currency support for the war. This made the Rothschild family very rich.
The Rothschild’s business model is based on one simple truth: You can induce people into surrendering their real wealth in exchange for a promise of greater wealth. It is public greed, people who fall for false promises of greater wealth, which has enabled the Rothschild family and all central banks today to build their empire together. Greed allows them to print currency far beyond the limits of backing in precious metal or the production of goods and services. You see, real wealth is not green paper. For those of you who are Christian, you might know that real wealth is explained in Genesis, in the Holy Bible. “The gold of that land is good” (Genesis 2:12). “Now Abram was very rich in livestock, silver, and gold” (Genesis 13:2). There are plenty of other scriptures too, but none that talk of green paper or digits on a screen.
In Genesis 24:22, we see the first monetary transaction. “When the camels had finished drinking, the man took a gold ring weighing a half-shekel, and two bracelets for her wrists weighing ten shekels in gold…” Notice money was weighed, not counted. There was no such thing as currency, which was originally created as an IOU for real wealth that was safekept by a trustworthy administrator. I won’t spend time explaining here, but if you want to understand the currency scam, take 10 minutes to watch John Law and the Mississippi Bubble, one of the most sensational schemes of all time. Whether you are religious, or not, you can appreciate the wisdom the Bible imparts: “You cannot serve God and mammon” (Matthew 6:24). Mammon is riches and wealth. If you believe the scripture, then it’s safe to say the Rothschild family is serving mammon, and therefore, we shouldn’t be serving the Rothschild family.
But here’s the truth: currency isn’t an asset, it’s paper or digits backed by false belief that it is an asset. It’s backed by credit, and credit is a liability. Energy, not currency, is the source of economic growth today. Energy is why we wage war (it’s depleting and we need it), while currency is how we wage war with sanctions, weapons, etc. Gold is a sovereign asset of 100+ nations. Currency was an IOU for gold. That makes gold a store of value, specifically “energy value.” I don’t mean energy that will power your car and house, but something tangible that holds value for trading purposes in a complex society. If you don’t wish to live in society, or trade energy and goods, then you don’t need gold. Since it took hard labor and war for each nation to obtain gold, and gold is precious (even to the ancients and gods), it’s naturally money, and it can be easily used for global trade.
Thanks to central banks, and their exploitation of the public’s greed, our financial system is built on a foundation of credit, NOT on a foundation of assets. As the Bible also teaches, a foolish man builds his house on sand instead of rock. He builds his house on his own wants and needs in the present, and doesn’t look at the humanitarian consequences for the future. The entire economic system depends on people’s willingness to surrender their currency (an illusion of wealth) into stocks, bonds, Bitcoin, cryptos, etc. in exchange for a promise of greater illusions of wealth in the future. Do the math, and you’ll see that this doesn’t go on forever. More and more currency with depleting fossil fuels and a system that depends on them means inflation isn’t transitory. It means debt-driven currencies are doomed.
You’ve probably heard the term “liquidity.” Simply put, I want to trade with you, but you don’t have what I want, so you give me something I can then use to buy something else either today or in the future. When credit goes bad, currency does too. This is inflation. Liquidity dries up, and so does the global economy. Where then do you get your food, water, heat and AC? Where do you put your trash? How do you empty your sewer? Where do you get parts for appliances that break down? Where do you get appliances? How do you get gas and electricity for your car? How do you fix your car if you can’t get parts? How to do you get to the grocery store? How do hospitals get equipment? Do airplanes get maintained? Currency is married to the global economy, but they are going through an ugly divorce. If you understand this, and you know where this world is heading, then you should see the bigger picture. Netflix, Facebook, Apple, Amazon, and Google are not this world’s leaders of the future. Can you see?
We are not in control of global events, but one thing we do have control over is where we put our dollars. First, though, we have to know what is real money, because currency backed by ever-increasing debt doesn’t hold its value in the future. And anything that doesn’t hold its value is not money, and doesn’t allow you to save or trade fairly in a complex society. It causes excess waste, supply-demand miscalculations, corruption, complacency, income disparity, tyranny, slavery, and poverty. The more debt that backs a currency, the more dysfunctional its society. Let me give you an example of something liquid that holds its value. Do you see the real estate ad from 1955? Pretend for a moment that it’s 1955 again. Whoopee! You’ve got $7,450. Do you save them for the future or buy 212 one ounce gold coins for $35.15 each? Now hold that answer and fast forward to 2022. If you had saved the dollars under your mattress, you would probably still have $7,450. If you had bought gold coins in 1955, you could sell them now for $363,975. What does a new two bedroom, one bath home cost today in Westwood Lake, Miami? If it’s more than $363,975 minus all your expenses, then gold is undervalued once again. Long term, gold always does the accounting for fiat currency, one hundred percent. At first, slowly. Then all at once.
You might be wondering why I didn’t say the house was the best investment, especially if you were able to sell it today for over $363,975. There’s a reason, many reasons in fact. First, everyone is invested in real estate. We’ve been taught that real estate always goes up in the long term. But here’s why real estate went up before and won’t in the future. The discovery of oil fueled a population boom, but the decline of oil will bring the reverse. The baby boomers are the largest generation, and those with money enjoyed big beautiful houses. Younger generations will have to take care of the baby boomers soon, the cost of energy and everything else will keep going up, so smaller more efficient homes are needed. Taxes, insurance, and maintenance costs will most certainly rise dramatically. People will go on less vacations with oil depleting and getting more expensive, and they won’t have as much cash to spend on vacation rentals. Plus the sheer number of vacation rentals will drive the price down. Big expensive homes and buildings are not going to be liquid at all; they will be giant time-consuming liabilities, not assets. Lastly, if there’s any kind of fallout or collapse, everyone will want to sell their second homes, to downsize, and a glut of real estate will bring the prices way down.
It should be clear by now that the dollar does not hold its value into the future, and it’s unwise (especially at the end of a long-term credit cycle) to store your wealth in someone else’s liability ($30T of it). Bitcoin, a promise of greater wealth in the future, is the world’s greatest “something for nothing” scheme ever concocted. It’s quite brilliant, honestly, for lots of predators to get their skin in the game. It uses the story of gold and the logo image of a gold coin, while relying on an army of jobless HODL laser-eyed speculators to hold hands together and wait for the promise of great riches…on what exactly? On nothing! How is “nothing” fueling economic growth? It’s not. How does it assist the credit cycle? It doesn’t. Bitcoin is a “process” (not a thing), a technology that consumes great energy in a time of energy scarcity, and requires a great deal of maintenance that will have to come from the physical mining and production chains linked to fossil fuels. It’s highly controversial, but again, if you understand what’s ahead, it’s clear.
William Shakespeare said it: “All that glitters is not gold.” But he forgot to explain that gold cannot be replaced by “nothing.” Gold is not everyone holding hands to embrace a new technology that will save humanity and the earth. There is no such thing as digital gold, no more than there is digital food that you can eat or digital water you can drink. Gold can’t be printed or manufactured or digitized. It’s out of the doomed digital system. It’s real! You can’t burn it up or delete. The beauty is it can be revalued in currency, and has been throughout history. But it can also be taken from you, so you have to be careful. I recently learned that “gold” is the 214th most frequently used word in the Bible. It is found 404 times in 34 out of 39 books in the Old Testament, and 35 times in nine chapters of the New Testament. Gold clearly has a very significant meaning in Christianity that has largely been ignored, and the Bible is firmly against inflation of any kind. An economics professor by the name of Dr. Judd W. Patton once wrote about this in an essay he called The Biblical Case Against Inflation. Fortunately, I downloaded the piece before it was taken offline. I’m reaching out for a new link or permission to publish again on my blog.
You know that currencies are going down because entertainment and gaming have become the new paradigm for living, the best way to make money, and the wildly popular and loved promise of a something-for-nothing future. Get a nice dance routine online and you might make millions! Or sell pictures of your feet to misguided men. A paper gold price supposedly backs the physical metal, but the following chart from the U.S. Office of the Comptroller of the Currency (OCC) reveals that a “handful of highly pocketed (and central bank supported) banks like JP Morgan and Citi can use extreme turns of derivative-based leverage to short (i.e., keep a permanent boot to the neck of) the paper gold price.” This gaming takes down the price artificially and supports the illusion of King Dollar. Is it intentional? Perhaps, because the truth behind gold is a threat to many lies behind the dollar. Will it last? Maybe, but I wouldn’t be caught underprepared in the meantime. Things will break at some point, so I’m trying not to concern myself with transitory price action and games in the market. I’m just sitting tight in my positions, waiting. Patience is not my strength, but I’m learning to trust myself in the process. Hopefully, it’ll pay off in the long run, and my writing will help you.