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In a recent interview with Chuck Butler, we discussed the US Financial Cycle using Ray Dalio’s chart in “The Changing World Order”.

Ray points to the downside of the empire:

• Large Debts

• Printing Money

• Internal Conflict

• Loss of Reserve Currency

• Weak Leadership

• Civil War/revolution

While our discussion focused on “Loss of Reserve Currency”, it’s part of a much bigger picture.

“We are grateful to the Washington Post, the New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost 40 years….   It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is more sophisticated and prepared to march towards a world government. The super-national sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.” — David Rockefeller

I disagree with point #17, “Poor Leadership.” I feel it began at step 8 and continues throughout the process.

“Poor Leadership” is the primary cause of today’s problems.

Politicians, blessed with a strong culture, economy and resources, always lust for more power and screw up. The “elites” feel they are smarter than the people, and know what’s best for us.

They implement policies to further THEIR agenda, enhance THEIR power; ignoring common sense. The adverse effects may take decades to unfold, but they inevitably happen.

Here are a few examples from my lifetime.

• After WWII, President Eisenhower warned about the influence of the “military complex” in Washington. How many trillions of dollars have been wasted, and lives been lost, fighting unnecessary wars and police actions around the world?

• When LBJ trumpeted “The Great Society” he was warned that it would incentivize out-of-wedlock birth and create a huge dependency class. Decades later the public learned LBJ’s true goal was to solidify political power over minorities. Mission accomplished!

• When Nixon removed the dollar from the gold standard in the early 70’s, Congress was freed from all spending restraints. Deficit spending has since reached the stratosphere.

• President Carter created the Federal Department of Education. The public screamed; education was a local responsibility. They predicted that when federal money became a factor, Washington would control the entire process. Whether it’s school lunches, or subsidizing colleges, today’s educational system is controlled by the politicos and their donors.

• President Clinton repealed the Glass-Steagall Act which effectively prevented bank failures since the Great Depression. Fed Chairman Alan Greenspan pooh-poohed concerns about bank consolidation and risk-taking, reassuring the public it would never happen. Meanwhile, Hillary received numerous $250,000 fees for 20-minute speeches from all the big banks. Just sayin….

The elite get richer while “the people” suffer

Bill Bonner discusses the effects of “Poor Leadership” in today’s world:

“In US history, 1971 seems to have been some sort of fulcrum. Before then, life in the USA improved for most people. After then, it only improved, significantly, for the people on top.

…. Wage gains ceased. Debt rose. GDP growth slowed. Inequality increased. …. Everything seemed to get worse.

…. In the period running up to the 70s, the top 1% got about 8% of national income. Today, it gets 20%. Incomes for the top 1% have roughly quadrupled since 1970. For the 90% of the middle class, they have been stagnant.”

He summarizes:

“Over the last 40 years, the US economy produced plenty of material progress for the capitalists – increases in their stock and bond portfolios. But few gains…for the proletariat. The median man in 2023 earns the same real, median wage he did in 1975.”

Like empires past, the elite get richer at the expense of “the people.”

What Happens Next?

Let’s start with John Kenneth Galbraith:

“People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right.”

R. R. Tolkien’s character Gandalf weighs in:

“Understand this: things are now in motion that cannot be undone.”

“All we have to do is decide what to do with the time that is given to us.”

John Mauldin tells us,

“I think debates about whether the cycle will turn next year, or five or 10 years from now, miss the more important point: A turn is coming relatively soon, and we should use whatever time we have to get ready.”

While most pundits agree that a currency collapse is coming soon, there is much disagreement on how it plays out.

Will we have a run-of-the-mill depression, or a full-fledged revolution and/or a civil war?

John F. Kennedy warned:

“Those who make peaceful revolution impossible will make violent revolution inevitable.”

Richard J. Maybury predicts, in his Early Warning Report:

“This can’t go on. …. The common scenario around the world for centuries has been power junkies continuing to wreck their economy until nothing works, and millions are fed up and scared. …. The high muck-a-mucks have nightmares about hanging from lamp posts.

Then one morning people climb out of bed, turn on the news and learn that during the night…(The ruling class) quietly slipped away. …. In short, the government is gone.

But America will not sink into the sea. The military will quickly take over,…(and) set about creating a new government, in phases. …. (First) a military dictatorship, then a constitutional convention, will be a turning point in world history.

…. I am not describing anything unusual. Governments going out of business and being replaced…. Is just the natural course of things.”

Kudos to John Mauldin’s article Noble Sacrifices explaining violent revolution is not the only choice. He quotes from Peter Turchin’s book, End Times:

“Revolutions Avoided

After reading de Tocqueville’s book on the French Revolution, the emperor’s brother, Grand Duke Konstantine, remarked, ‘If we do not carry out a peaceful and complete revolution with our own hands, it will inevitably happen without us and against us.’

In his address to the Moscow nobility, Alexander II himself expressed the same sentiment, stating ‘We live in such an age that it will happen sooner or later. …. It would be better to begin to abolish the serfdom from above than to wait until it abolishes itself from below.’

Most wealth holders are unwilling to sacrifice any personal advantage for the sake of preserving the status quo. The technical term for it is ‘revolutionary situation.’ (Instead of revolution)…The alternative is to adopt a series of reforms that will rebalance the social system, reversing the trends of popular immiseration and elite overproduction. The American ruling elites did it once, a century ago. Can they do it again?”

The interview continues….

DENNIS: Chuck, we can’t predict the future. We can however, focus on what we (the 90% proletariat) can do, regardless of how the changes take place. Every fiat currency eventually fails, sometimes followed by empires and governments. However a Great Reset happens, our country will still exist.

How will the “loss of reserve currency,” and other changes affect middle-class America?

CHUCK: While all Americans will feel some pain, it will not be distributed evenly.

The wealthy won’t even notice how much more expensive everything is; like a “rounding error” to them. Their net worth on paper may go down, but it is unlikely to have any major impact on their lifestyle. They will still be elite and powerful. Bill Gates and others buying up thousands of acres of farmland. They will be fine.

The poor, the needy, will never know that their lives are worse, but are likely to scream bloody murder if their government “free stuff” handouts are cut. The political class have been encouraging civil unrest for years; they better be careful what they wish for; they might just storm the palace.

The middle class, the folks that do the labor, feed the country, pay for every government boondoggle, are the folks that will feel the big hurt from rising prices. Their wages won’t keep up with price increases, they will have to dip into their savings, eventually leading to having no savings left; they too will be the poor.

Socialism always leads to a real reduction in the middle class.

Those who prepare properly should fare much better.

DENNIS: One last question. As John said, we should use whatever time we have to get ready for all possibilities.

Argentinians and the Brits had to fend for themselves when their currency tanked. I’m sure some citizens saw what was coming and were able to “get ready.”

What would you suggest our readers do to protect themselves and their family? They want to be in the “fare much better” group.

CHUCK: Thanks again for the opportunity to address your readers.

I can’t impress enough the need for people to own Gold – or Silver. It’s very important to own something that can be used to barter. There will be a Wild West feeling, but with Gold in your hand you can negotiate, sleep better, and protect yourself from the rapidly falling value of the dollar.

In addition, an astute investor could look for a piece of land that they could live off of… Grow their own food, have livestock, have running water through the land, etc. Owning hard, physical assets are the top of the list.

If you are able, diversification offshore, buying land and other assets using different currencies would be something to consider.

If the BRICS issue government bonds, or institute a gold-backed currency, holding assets in their currency or bonds could be a good option. Remember Dennis, currencies are traded in pairs, when one goes down, another goes up. Find countries with a good balance sheet and diversify.

Let’s all be in the “fare much better” category.

Dennis here.

Most Americans are fed up with “Poor Leadership” from the entire political class. Since the Tea Party movement began, they have been pushing back and things are coming to a crossroads. Personally, I don’t underestimate the strength, courage and willpower of the American people. America will go through a great reset and become a stronger nation once again….

On The Lighter Side

I’m going to deviate from the norm this week, it’s very relevant to the discussion with Chuck. This interview took place just before 9/11. As we got into it, I didn’t want to leave out the important points he was making so I had to break it into three separate articles.

I’m doggone concerned about how things will turn out. Here is my conclusion….

Americans were moved and horrified watching the events of 9/11 take place. Reader Charles C. sent me a couple of quotes:

“When Americans lend a hand to one another, nothing is impossible. We’re not about what happened on 9/11. We’re about what happened on 9/12.” — Jeff Parness

“I was in U.S. history class in 11th grade on 9/11. We didn’t just learn history, we watched it unfold as we watched the aftermath of the catastrophe. I remember to this day watching the heroism of the firefighters, police officers, and first responders who ran, not from Ground Zero – but toward it, to help their fellow Americans in need.

In the weeks that followed, we weren’t black or white; gay or straight; Democrat or Republican. We were all American. In the face of tragedy, we found unity. In the face of despair, we found renewed hope. Even as we pray that no calamity like it ever happens again, we can still long to be reunited once again.” — Vivek Ramaswamy

I thanked Charles and expressed concern. Today’s political class is hell-bent on dividing us as a nation, racially, economically, values, culturally, you name it. It is almost as though they fear our nation coming together as they did on 9/11 and the days that followed.

Charles responded with a link to a 12-minute video; a “must-watch”.

https://www.youtube.com/watch?v=MDOrzF7B2Kg

Storm clouds are on the horizon, things are going to change dramatically and it will not be easy. The video helped me realize the politicians are in for a shock.

America will come together again and we will get through this – with or without the nobility.

Until next time…

Dennis Miller

“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken

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