classical economics
for analysis,  forecasting
and policy design

Shelter Where?

This Time, Shouting “Sell” Will Not Be Enough
By Wayne Jett © August 8, 2016

      The signal to begin the Great Crash of October, 1929, was a floor vote by the U. S. Senate approving a sharply higher tariff rate on a milk by-product used in paper-making. A cascade of sell orders ensued immediately, driving down corporate share prices, destroying companies and ruining investors. Once the crash began, an investor’s objective was clear: sell shares for cash as quickly as possible.
      In 2016, an investor retreat is not so simple. “Cash” is no safe haven now, as it was in 1929, when the U. S. dollar’s value was measured in gold. Then, a paper dollar could be exchanged for gold in the promised amount at any time. Not so for Americans since 1933. Now a financial crash is likely to be centered on “cash” (the U. S. dollar) as the problem – not the solution – to investment risk.
      As a practical matter, this means adjusting your investment risk is now a two-step process, at least in most cases. A few investors may be able to exchange one investment directly for another, safer asset. But most must sell an existing asset for dollars, then buy a preferable asset with the funds. This means, at the very least, you need to act earlier to adjust your risks before the panic or crash begins. You ought to get to your preferred shelter before the deluge comes.

Drivers of Financial Crisis

     The gap is wide between corporate media reporting and reality, so a brief synopsis of the current environment may be useful. The driving force producing financial instability in the U. S. and globally is the reckless disregard for maintaining integrity of the unit value in the world’s reserve currency. The private central bank known as Federal Reserve has blatantly abused the trust placed in it to protect the value of the world’s capital invested in the U. S. dollar.
    The first principle of currency management is stability in unit value must be achieved and maintained, neither gaining nor losing value over time. The Federal Reserve is infamous for its sneering disrespect of this principle, while pretending to be capable of all things for all people, including job creation, bubble pricking, economic stimulation and lender of last resort. The Fed failed in all of these undertakings, but most importantly in its responsibility to provide currency with dependably stable value.
     To conceal the traditional signs of profligate money creation, the Fed and its allies in the shadow government have engaged in far-reaching manipulative schemes to make the dollar appear stronger and more popular than is the case. These schemes include secretly creating false and unproductive demand for dollars, and manipulating the prices of gold and other precious metals to keep them lower than the market would set, thus preventing rising gold prices from signaling currency deterioration.
    The Fed’s surrogate Wall Street banks have created tens of trillions of dollars in nominal value of interest rate derivatives, which must be rolled over periodically and serviced with dollars. This activity temporarily soaks up the excess dollars created by the Fed, while also keeping interest rates abnormally low compared to the risk of default by the debtor (U. S. Treasury). As written here in years past, the interest rate derivatives must insure against loss of principal due to rising interest rates – otherwise, who would buy bonds almost certain to default at such meager interest rates?
    Market prices of gold, silver and other precious metals are manipulated lower through use of heavy selling of futures contracts – promising to deliver 500 times as much metal as is actually available – and setting the market price for physical metal based on the prices set in the paper contracts (which almost never deliver the metal to the contract owner). Deutchebank recently confessed to participation in such conspiracies with other major banks to manipulate gold and silver prices. These practices deceive and cheat owners of the metals contracts, owners of the physical metals, and users of U. S. dollars who overestimate the dollar’s value.
     The Fed’s malfeasance has produced great hardships and inequities worldwide, including in the U. S. Other nations are fed up, have had enough, and are getting out of the Fed’s reach as quickly as they can. Nations which have tried this move alone have been ravaged by terrorism and war, with major presence of U. S. military – Iraq and Libya, for example. Brazil, although allied with others, is threatened by efforts to topple its elected government and to spread fear of disease as it proceeds with hosting the Olympics.
     History shows breaking free from the network of central banks controlled by the Rothschilds, the Rockefellers and a few other families is both difficult and hazardous. Nations comprising more than half of the world’s economy are presently on the verge of doing so. One of the questions to be determined is whether Americans can muster enough understanding, organization and force to break free at the same time.

BRICS Are Making Their Move

      The BRICS nations (Brazil, Russia, India, China and South Africa) have progressed in establishing a commercial system of trade which will not use the dollar or U. S. Treasury securities. More than 100 allied nations have told BRICS to count them in on that trading system, too. Why?
      These nations know to a certainty that the Federal Reserve is robbing them of the value of their saved capital. They have a strong desire to stop being robbed as soon as possible. This is the driving force which will end the status quo by which the Fed’s owners steal daily the capital value produced by working people worldwide.
     The BRICS system of paying for international trade shipments is being implemented already. In part, the China International Payments System (CIPS) will speed the transfer of national currencies to purchase gold-backed trade certificates to be used in paying for international shipments of goods. As CIPS gains wider use, some countries including China, Russia, Germany and others will begin issuing currencies backed by and exchangeable for gold in stated amounts. These currencies will facilitate ready purchase of trade certificates for use in CIPS.

Ramifications for Americans

      We have permitted our country to be ruled by criminal psychopaths represented by charlatans in government and media, and the nation is about to endure the consequences. Within a short period of time, dollars in the U. S. will be reset in value about 30% less than present. This will increase the cost of imported goods, but won’t be nearly enough to reduce the $500 billion annual trade deficit very much. Further devaluations of the dollar and much increased sales abroad of U. S. produced food, commodities and manufactured goods will follow quickly. Otherwise, U. S. assets will belong to foreign ownership coast-to-coast in not very many years.
      This means sharply higher cost of living and shortages of necessities in the U. S., including food, clothing, finished goods and possibly housing. Also, it means sharply reduced federal spending for military and domestic programs. Anything which can be made here must be made here, as soon as possible, rather than bought from abroad. That has not been done for many years, and the transition will be painful for at least five years, especially at the outset.
     The $500 billion annual U. S. trade deficit must be brought down rapidly, reduced to zero and turned positive. Between now and then, the standard of living in America will decline sharply, producing great hardships and suffering – all for the advantage of the oligarchs behind the shadow government.


     At great risk under the threat of U. S. military/clandestine might, other nations of the world are making their move to free themselves from the oppression of the Rothschild central banks led by the Federal Reserve. During this high-risk interregnum, do not get caught with lots of cash in your hands or in any bank or other financial institution regulated by the Federal Reserve.
     Americans should thank the BRICS for breaking away from the fiat currency imposed by private central bankers and, further, should implore the BRICS: Don’t leave the dollar without us – take us with you!  ~