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A "Mostly Peaceful" Heist (Part 3)
In "A Mostly Peaceful Heist (Part 2)," we examined the blueprint of the heist to better understand the mechanics of this corrupt fiat financial system. With the removal of gold from the monetary system, the Ruling Class of dishonest politicians and bankers have been unconstrained in their ability to create more money. To no one's surprise, if an individual or group can conjure money from nothing, they will do it. As discussed, the stakes of the heist have increased from "moderate inflation" to, let's call it, crippling inflation. What began as a "mostly peaceful" heist of savings is now a debilitating force in society globally. The good news is there is a secure vault to protect your life's savings from theft, and even better, it's available to everyone.
Financial Repression: The 2020s Blueprint
In “A “Mostly Peaceful” Heist (Part 1),” we examined the Federal Reserve's definition of inflation and their rationale for the "2%" CPI target. We noted that their target is arbitrarily decided, evidenced by their decision to increase the target from 2% to "2% over the longer run" in 2020. Why did they do this? Simply because they knew inflation was not "transitory" and would be higher & persistent. Why did they know this? Because high inflation is part of the plan. The heist is intentional.
Part 2 of this series dug into the US Government's fiscal situation. The US Government Debt-to-GDP has ballooned since fiat money took hold in 1971, and debt accumulation accelerated following the 2008 Financial Crisis. The Debt-to-GDP ratio peaked at 134% in Q2 2020, and the US is not the only country with exorbitant debts.
But what does this have to do with high inflation being planned? Let's look at Hirschmann Capital's Q2 2020 Investor Letter.
"Since 1800, 51 out of 52 countries with gross government debt greater than 130% have defaulted, either through restructuring, devaluation, high inflation or outright default."
But that's not all. The International Monetary Fund published a report in 2015 titled "The Liquidation of Government Debt."
The takeaway from these reports is that the situation does not end well when governments become encumbered with high debt. As Hirschmann Capital mentioned, default, restructuring, devaluation, or high inflation are viable options to reset the government's debt.
We can deduce from this that for a government, such as the US government, which issues debt in its own currency, the best choice moving forward to decrease its debt is to inflate it away. What this means in practice is that due to the horrid fiscal situation, the Federal Reserve's "fight against inflation," which is currently taking place in the form of hiking rates, will be short-lived. It is theatrics to appease people, to have them think that the Fed is trying to quell inflation and fix the economy.
Due to the high Debt-to-GDP, we can expect that the US Government will prefer to inflate the debt away rather than explicitly default or restructure it. Inflation will need to remain high for several years (decades) while interest rates will once again be suppressed through Quantitative Easing (money printing). A rate of inflation higher than interest rates is a negative real interest rate. This decreases the Debt-to-GDP ratio of the sovereign nation.
This dynamic of artificially low-interest rates due to Government/Central Bank intervention paired with a higher inflation rate is called "Financial Repression." Russell Napier, a financial market strategist, researcher, and author, describes financial repression as "the art of stealing money from old people slowly." Sounds like a heist.
To ensure we are on the same page, financial repression creates an environment of negative real yields. Savers get paid less interest than the rate of inflation, which means they are losing purchasing power over time. A wealth transfer from the savers to the government.
A similar playbook was run after the Second World War when the US Debt-to-GDP ratio was over 120%. Per Lyn Alden, Founder of Lyn Alden Investment Strategy, from 1945 to 1980, real interest rates were negative half the time. A massive heist of savings as money is printed to suppress interest rates to pay off debt.
It should be clear now that the savers pay the price when a government gets itself into hot water by irresponsible fiscal policy for decades. The Ruling Class simply pays you less on their government debt than inflation, transferring wealth from you to them. All part of the plan.
We will see the Federal Reserve and other Central Banks change their inflation target from the current "2% over the longer term" to 3%, 4%, etc., to justify the heist to the public.
The Financial Times published an opinion earlier this week, "It is time to revisit the 2% inflation target." The author writes, "It [ the research] found that, for the US, if inflation was around 3-4 percent, people simply did not pay attention. Above 3-4 percent, they did."
Don't worry, the Fiat Jailers are determining how high their stated inflation policy can be without the public questioning their credibility. Goes to show, once again, that their inflation targeting practices are not based on data or what they think is best for the economy, but rather how much stated theft they can get away with. It's only a matter of how it will be positioned to the public for us to accept the higher inflation, just like "moderate inflation."
Inflation: A Blatant Robbery of Our Future
As we have hopefully hammered home in this article series, "moderate inflation" has been ingrained in our minds and monetary system through propaganda from central banks, governments, and the people who serve those institutions.
Now it's obvious that "moderate inflation" was simply about finding a balance between stealing your money as much as possible and not having you notice. For decades, a "moderate" pace of inflation went unquestioned, a "mostly peaceful" heist. But in the wake of a 42% increase in the money supply in 2020 and 2021, the intention is clear, maybe too clear.
The printing of money decreases the purchasing power of your savings and increases your cost of living. The expansion of the money supply is theft, a wealth transfer.
The result is a massive wealth gap, the largest in United States history. As we cited in Part 2, "the top 1% owned a record 32.3% of the nation's wealth as of the end of 2021." It's hard not to notice the divide between the haves and have-nots, especially if you spend any time in cities. The same block could be multi-million dollar homes and tents of homeless people.
Inequality exists in any economic system, but the extreme levels today are a function of the corrupt fiat monetary system. A financial system with oligarchs at the top who siphon wealth from us to benefit themselves through the debasement of the currency.
Michael Saylor, Executive Chairman of MicroStrategy, notes
"[If you are] living in a system where all the fruits of your labor are debased continually, then you are overcome by despair. The amount of despair is correlated with how quickly the currency is devaluing."
He goes on further to say,
"When the inflation rate is 0% [bitcoin], your money will last forever, then your hopes, aspirations, and time horizon is forever. If the inflation rate is 100% and your money loses half its value every year, then your time horizon is 36 months. There is no ability to have a legacy. All of your savings are gone. In the absence of bitcoin and the presence of a collapsing economy, you are overcome by despair."
As the stakes of the heist have increased, so too has the pace of societal breakdown. Through the debasement of the currency, the Elites consistently stole the hopes and futures of millions of people nationally and billions of people globally over the past several decades. Now the heist is much more obvious, and people are overcome with despair and most unable to achieve the same standard of living that their parents or grandparents did.
We believed the lie of "moderate inflation." We trusted that these institutions had our best interest in mind. In reality, it was always a heist. There is no such thing as "moderate inflation." Any amount of inflation (money printing) is theft. This is not a "mostly peaceful" heist. This is an outright robbery of people's hopes and dreams. The correlation between the devaluation of money and the deterioration of society is extremely clear.
The Elites are making life unaffordable. Those who are able to make a decent living are working harder, usually in a dual-income household, while having a worse quality of life.
As we continue on this path of monetary debasement, and the pace accelerates, so too will the violence, despair, and societal decay. Political tensions are growing between the two-party system, but in reality, the frustration, anger, and resentment should not be directed at your neighbor but at the criminals who rule the world through the monetary system.
How much longer will this theft continue? I ask myself often. What needs to happen for the heist to be abundantly clear to the masses. When will the deception end?
The Ruling Class is stealing our time via money printing.
We work to earn a paycheck and spend the majority of our week doing so, just for money to be printed on a whim by the Fiat Jailers, devaluing our hard-earned money. It's illegal for us to counterfeit money but perfectly fine for the government to do so.
Great tweet from James Lavish author ofto reinforce the idea of time theft.
Another example heard on Twitter,
“My grandfather was a mechanic in a paper mill. Came from modest means yet owned a house, 2 cars, his wife stayed at home and they raised 3 kids. Never struggled to make ends meet. Such a circumstance is unheard of today. The Fed destroys all our livelihoods."
The heist taking place is regressing us as a civilization. As our money loses value more rapidly, we are less incentivized to think long-term and revert to short-term thinking. Survival becomes most our key focus.
Rather than undertaking a worthy cause, such as building a business that solves an issue important for the world, starting a charity, starting a family, or contributing to a project bigger than you, under a violent heist of savings, people revert to animalistic behavior.
Despite the havoc, the Ruling Class creates on the economy, history shows they do not give up their monopoly on money voluntarily. The most likely outcome is we continue on this path of money printing and societal degradation.
As George Santayana, Philosopher, Essayist, Poet, and Novelist, said, "Those who cannot remember the past are condemned to repeat it."
Heists of the Past: A Distant Memory
We are on the same path as the Roman Empire, which collapsed in part due to the debasement of the currency.
During this time, the term debasement referred to the action of melting down precious metals with lower-value base metals such as copper or nickel to create more coins with lesser value.
Over a 200-year period, Emperors debased their currencies to enrich themselves and pay for expenditures without explicitly raising taxes. The Denarius' silver content went from over 90% to less than 5%. Through this process of debasement, more coins with less precious metal content were issued, which increased prices in the Empire.
The increasing prices due to debasement (inflation) interfered with economic signals, making it more challenging to coordinate economic activity. The ongoing manipulation of money eventually led to societal collapse as many people saw their savings destroyed and took to the streets to protest. After centuries of currency debasement and decades of invasions, the fall of Rome was completed in 476 AD.
However, we need not look back to the Roman Empire to see the collapse of a currency leading to a collapse of society. After all, humans are easily corrupted by money.
The Weimar Republic faced hyperinflation roughly 100 years ago. Hyperinflation is defined as "rapidly rising inflation, typically 50% month over month."
A currency hyperinflates due to an exponential rate of money printing which leads to a collapse in faith in the currency. As money rapidly loses purchasing power, all economic signals are destroyed. There are no reliable price signals to coordinate economic activity. Wages may increase exponentially, but relative to the increase in desirable goods, such as food or energy, it may be insignificant. There is so much uncertainty during a hyperinflationary event that people would rather own a perishable food such as fruit than hold their currency.
Decades or even centuries of work and collaboration to progress humanity can be wiped out in a matter of months, weeks, or days in a hyperinflation event. Hyperinflation causes conflict rather than coordination. Violence instead of peace. Survival instead of prosperity.
A complete collapse of currency collapses society. For an excellent summary of the hyperinflation of the Weimar Republic, I'd recommend reading "Why WiFi Money is the Best Way to Survive Hyperinflation" by. The article gives a glimpse into what life looked like during the fall of the Weimar Republic, with many quotes from the book, When Money Dies.
Highlighted in the article is the discrepancy between the rich and the poor. The rich people who could afford assets such as real estate, infrastructure, gold, or stocks saw their wealth increase at or above the rate of hyperinflation. They were still able to enjoy a luxurious lifestyle; however, those in the working class or middle class saw their livelihoods wiped out.
These are only two historical examples of the consequences of money printing. According to author Dr. Saifedean Ammous, in his book The Fiat Standard, "more than sixty episodes of hyperinflation have taken place in countries using fiat monetary systems in the past century."
While we do not anticipate hyperinflation in the United States or broadly in The West, we do expect inflation to remain high for a sustained period of time. Thus, as the heist continues, our expectation is that overall, at a global, national, or even state (US) level, it will get worse before it gets better; however, at the individual or family level, there is a way to protect yourself from the robbery by the Fiat Jailers.
The next and final piece of this series will explore bitcoin as a secure digital vault for your life savings, insulating your wealth from the “mostly peaceful” heist.
Thank you for reading. I appreciate you following my work. If you enjoyed this piece, please hit the “like” button and let me know! If you have any comments, questions, or feedback leave them below.
Stay tuned for Part IV.