Jaime O. Perez

I have given up. I am firmly waving my white flag of surrender to the Monetarchy. The money, power, dishonesty and lack of ethics is so deep, metastized cancer looks like a mildly invasive chill. There is nothing any citizen can do to overcome the corruption of the national political body, nor fight the international control of so-called central banks. I prefer to acknowledge defeat and move along than continue to waste time debating the obvious. The ongoing transfer of wealth from individual citizens in countries around the world to a small cabal of bankers and financial groups continues unabated.

So instead of trying to fight the good (and useless) fight against the Monetarchy, I have made a decision to surrender and focus on something I can control — my own actions relative to local government.

It has become increasingly obvious to me the same strategies used to rob citizen sovereigns of their wealth by international bankers and financial groups are the same ones used to transfer funds from local tax paying homeowners, businesses and pension funds to bankers and corporate raiders and speculators. But, the immense difference is that, on the local level, it is possible to fight them. It does not mean that such battles will be successful, but it does mean that if 10 groups of citizens in 10 different cities avail themselves of their legitimate avenues of action, the tail may eventually alert the dog that serious pain is nearing its nether regions.

I take on a sword today to fight the good fight at the local level. May all the treasonous senators and congressmen and governors and legislators be fracked for betraying their constituents.

The massive propaganda machine is at it again.

Egged on by Paul Krugman, CNN and other media have jumped on the bandwagon of misinformation in order to manipulate the general public. The goal is two-fold.

On the one hand, the propagandists for the progressives in power, are trying to equate platinum to gold and silver such that if people want to invest in precious metals, they might consider platinum. Investing in precious metals will soon mean, in the media, investing in platinum. An important consequence would be, of course, that less money will be going into gold and silver. This will keep a lid on the price and teach a lesson to gold bugs and those who believe gold and silver are money.

The second goal is to suggest the technique of bypassing obstruction in the Congress and issue fiat money via a platinum trillion dollar coin is a way of creating wealth. This will encourage small individual investors to stay in and, by extension, prop up Treasury Bonds (in propaganda speak: real money), avoid jumping ship to gold and silver, and lead people to believe wealth can be created through the stroke of a Presidential pen.

Watch for more of this system propaganda strategy.

The challenge before many commentators, analysts and economists is to determine whether or not the global economy is in its last throes or whether some combination of money-printing and inflation export strategies will save the day for developed countries such as the United States. In the meantime, the stock market is growing consistent with QE (quantitative easing) strategies of the Federal Reserve. In fact, the Fed has signalled further injections of liquidity into the market through extension of its “Twist” and “QEoo (Quantitative Easing Ad Infinitum)”. Clearly, the Federal Reserve cannot stop this policy. To do so would mean a total collapse of the economy as we know it. Still, the injections of currency into the system is not working as desired and unemployment will likely continue to rise globally as well as in the US. Most economic indicators are pointing to a downward trend on all technical measures.

It may be that a year from now, we will be looking back at the collapse of the US dollar and the tumbling of the global economy into a severe inflation and increased and massive unemployment as clearly predictable because highsight is 20/20.

Yet, many doomsday commentators still hedge their words by now claiming such a potential collapse may occur in the next 3 to 5 years. They were predicting a currency collapse in 2012, 3 to 5 years ago. This begs the question, How is it the system still survives? Not even the perceptible abandonment of the US dollar by most major countries as the reserve currency is having the critical and pernicious effect predicted.

My own sense is the country is moving through something akin to a hospice process. When a currency system enters the final stage of its life cycle, two different dynamics are at work which are closely interrelated and interdependent. On the observable plane, the nation begins to exhibit chronic problems such as unemployment and gradual increased inflation of basic goods. Usually this is an undramatic progressive series of economic changes which are not, in themselves, grave emergencies. These changes provoke rallying cries for more growth and consumption and expansion of the social “safety net”.

The other dynamic of the dying process is psychological and is a different kind of process. The spirit of the dying economy is exhibited by the inexorable decline of a few economic sectors, sluggish investment and a reduction of overall productivity. This release also tends to increase the awareness by significant sectors of the informed population of the reality of the situation. The idea that an end is approaching and a recognition that things are no longer working as they should is met with an optimistic belief in our “American Exceptionalism” and the marching orders of “Buy American” and continue unsustainable consumption to “help” the economic “recovery”.

Although the economic system is ready to implode, public opinion may still be unresolved or unreconciled to such a reality because it simply seems impossible the country could collapse. In some financial sectors panic takes hold and efforts are made to jump start the economy. Calls are made to support “stimulus”; the injection of liquidity or other approaches to prop up the system. By the time, the stimuli become chronic, as is the case now, the system may still tend to show “growth” and linger as a result of habit, the so-called normalcy bias; people maintain the regular activities of economic normalcy. Some sectors begin to hedge and move into a passive role in the economic activities taking hold in a stimulus environment. The economic system continues to sputter forward.

These processes will happen in a way appropriate and unique to the values, beliefs, and lifestyle of the nation. In the US, severe political polarization and independent political ethos can very quickly lead to civil disobedience that can spiral out of control into a generalized violence. The implosion process will go through 12 stages:

First, there will be small sectors gradually left behind: inner city economies, youth and senior unemployment, marginal group poverty and rural towns experience depression. The national focus on urban areas grows and there is an increase in food stamps and emergency measures to keep the lid on general discontent among marginal populations.

Second, larger segments of the public begins to perceive something is wrong and there is little information or dialogue because no one seems to know what to do. There is still a confidence “someone” is taking care of the situation. Families begin to talk about how to cooperate more in these “hard times”.

Third, the public begins to experience confusion. Individuals begin to question their decisions and choices relative to whether they live or the occupations they chose. At this stage, they still don’t realize they are simple grains of sand in the larger macroeconomic beach.

Fourth, spot shortages begin to occur at retail outlets and more businesses shut down. More and more cities declare bankruptcy and some areas experience extended energy outages.

Fifth, political leaders begin to play the blame game relative to levels of governments. Federal, state and local leaders will begin pointing fingers at each other for the sluggish economic performance.

Sixth, violent incidents, car wrecks, suicide, family abuse and physical assaults begin to escalate significantly.

Seventh, productivity plummets and unemployment reaches levels never before experienced. Government begins to encourage “conservation” of energy and promote austerity and money “management”.

Eighth, larger segments of the middle class begin to feel the crunch of inflation and loss of their standard of living.

Ninth, anger takes hold and politicians begin to hide from public forums. Demagogues will find a receptive audience and rioting and other forms of social violence emerge.

Tenth, the public struggles to maintain normal activity. It becomes more difficult due to hyperinflation and scarcity of goods. Living quarters in homes and apartments become the only refuge of safety. Neighbors initially try to survive individually and do not share their distress with others.

Eleventh, lawlessness takes hold and neighbors begin to coalesce into safety brigades.

Twelvth, the realization the system has imploded takes hold and the public experiences fear, tears, frustration and general disbelief that it is actually happening. They finally realize the country’s economic system has imploded.

How will you know when the end of the economic system has occurred?

Although you may be prepared and aware of what is occurring, you may not be prepared for the actual moment. The most obvious realization most people will experience is that there will be no one there to help when there is no money in their hands or in their bank. There is no economic hospice counselor or economist on hand to help them through the collapse of their financial well-being – no police nor benefactor, will be waiting in the wings ready to save you from the death of a currency system and the nation it undergirds.

The actual implosion, more over, will be swift. The twelve steps described will take no more than six months to play out. Some say December 2012 is the first month of the coming hospice event. I suspect we are entering hospice in America and no one can know for sure how long the national body will survive. One thing is certain, the collapse will occur and no treatments, medicines or stimulus are left that will help.

The massive deflation of the money supply (M2) being experienced in the US was met with an inflation policy by the Federal Reserve in the amount of $40 billion USD per month and ongoing purchases of valueless derivatives styled toxic assets from bank balance sheets on to its own on the order of $45 billion USD per month styled QEoo (Quantitative Easing ad infinitum).

At the same time, the Monetarchy’s principal bank, the Federal Reserve, coordinated a simultaneous inflationary policy from all world central banks. The idea behind the coordinated devaluation of national currencies is that the value of current sovereign and bank debts can be adjusted and managed without unduly increasing the supply of money (M1) onto the hands of citizen-consumers. Too much retail (citizen/consumer) inflation would create dislocations and misallocations that could threaten confidence in the system and potentially lead to street violence in the US as experienced in Spain, Greece et al.

The question is whether this conflation strategy, that is, the simultaneous pumping of liquidity by the Federal Reserve and other world central banks to meet the simultaneous deflation (contraction) of the money supply will succeed in its dual goals: the propping up of the global economic GDP and the gradual adjustment of inter-sovereign and inter-bank debt.

In other words, the Monetarchy’s current nominal leader, Ben Bernanke considers that eliminating zeros from the massive global debt through inflation and controlling the supply of money through the digital manipulation of the world’s reserve currency (the USD) by the Federal Reserve may buy sufficient time (on the order of three years) to allow the clearing out of housing, housing derivatives and other bubbles created by international speculation at the hands of world banks and private algorithmic traders.

A failure of confidence in the system or a regional war pose the only significant threats to this strategic thinking.

For example, a large movement of investment to precious metals would engender a loss of confidence in the stock market and provoke a swift and unstoppable downward movement. Such a movement might be provoked by the reality of a contracting world economy.

Moreover, a regional conflict, such as a potential one between Israel and Iran, would provoke a meteoric rise in the price of oil. Such an occurrence would also unravel the strategy. This is the primary reason President Obama is doing all he can to delay any potential military action against Iran.

Behind the scenes, therefore, the Monetarchy is working hard to replace traditional politicians with technocrats (Romney) that understand the importance of the current conflationary policy and will bring Sovereigns in line with fiscal reforms intended to appease the investment bankers and algorithmic traders.

It is clear the Monetarchy has nodded its preference for Mitt Romney in the US Presidential election because he can more effectively control Bibi Netanyahu and any rearing up of violence on American streets. Hundreds of US cities are passing population control ordinances and increasing public spending in line with Federal Reserve requests to banks to support inflationary spending under the guise of supporting jobs and recovery.
Nonetheless, the Monetarchy is satisfied to continue to work with President Obama who has supported its conflationary policy 100 percent.

The reality is that the nominal head of the US government has little room to maneuver within the context of the consolidation of the Monetarchy’s strategic fiscal policies and political consolidation.

The world’s Monetarch, Ben Bernanke, ordered the release of the fiat currency Kraken against the underperforming economy. Calculating a temporary boost to his nominal sponsor, President Barack Obama, and a decisive boost to the stock market, the Monetarch has consolidated the global central banks into a powerful inflationary force.

The outcome will, more than likely, result in a consolidated fiat currency. Bankers and traders on wall street and the major world exchanges have responded with great enthusiasm and the stock market is rising dramatically.

The decision to adopt quantitative easing ad infinitum (QEoo) will result in a prolonged devaluation of the US dollar. Many commentators believe the fact the dollar is the reserve currency will ensure it will survive a gradual and massive devaluation over time. In addition, the enlistment of the world’s printing presses in the Eurozone, Japan and China to the inflationary effort will help to collectively manage the global debt to GDP imbalance.

The intervention by the Federal Reserve is so gargantuan there remains no question the tactic is intended to cement the strategic consolidation of the Global Monetarchy by forcing the birth of a negotiated and single global currency.

There is, however, still one very important impediment to fiscal consolidation: Gold and Silver. The disparate allocation of precious metals viz. nominal nation-states and private sector agents is a threat for two of the most important players – the US and UK. Therefore, there is furious behind the scene negotiation to create a reasonably equitable allocation of the planned global currency. This may or may not include a return to a gold standard which is why so many are turning to silver. Silver has an industrial use and, as such, has a highly manipulable character that makes it ideal as the precious metal of choice and value standard for the Monetarchy.

The US can now look forward to hyperinflation. This is necessary as a strategic goal by the Monetarchy in order to gain political support for a unified global currency. It will be sold to the public as a creation of the Federal Reserve to “save” the economy rather than a currency of the US government.

In addition, look to massive public works spending by the next US administration as the public sector (federal, state and local) seeks relentless to reinflate the economy. The public works policy will ensure support by a shrinking labor force and local banking and development interests.

It is fascinating to watch MSNBC and others at work pumping up what is happening on the stock and world markets.

If you don’t follow the financial and political institutional players, allow me to provide a synopsis.

According to financial media and large financial conglomerate (Goldman Sachs, JP Morgan et al.) spokesmen, the economy, as of August 2012, is improving. There is some jobs growth, high corporate earnings reports, a rising stock market, sideways movement of precious metals that promise to go lower while the bond market continues to be attractive to world investors. The lesson to be gleaned from the downturn in precious metals is to encourage investors to move to equities. Moreover, the dollar is getting stronger relative to other currencies.

The Federal Reserve Governors, Ben Bernanke and new potential Governors continue to broadcast they are committed to Quantitative Easing until such time as economic growth can sustain itself. China and Asia, the Eurozone and North and South American countries –all are working on stimulus strategies to maintain economic momentum. Expect the reelection of the current President in November.

If you follow the Austrian and Post-Keynesian analysts such as Peter Schiff, Max Keiser, Marc Faber etc, you get a different view.

According to them and others listed in the links attached to this website, both the US and the world economy are worsening dramatically. The Federal Reserve and large financial groups are artificially maintaining the stock market to give the illusion of improvement in order to prop up the current leaders of sovereign governments who favor current inflationary policies. In their view, now is the time to get out of the bond market and into precious metals. The volume, of videos relative to privacy and free speech violations by sovereign governments as well as ‘prepper’ videos portending imminent economic collapse, is increasing. Most expect a dramatic downturn in December and early 2013.

Who is right? They both are.

I suspect that in September 2012, the Federal Reserve will probably continue its “twist” and a small QE program to keep the fiction of a recovering economy going to year end. But, it will not be so dramatic in order to provide cover for the President. Nor will anything happen in October. It won’t be until after the election that a new massive QE policy will be unleashed under the (discredited) theory that a massive injection of liquidity (paper money) will jump start the economy. The rich will get massively richer and the poor massively poorer. Interestingly, the Federal Reserve time horizon for this inflationary strategy is 5 to 6 years. In the interim, expect a slowdown of the world economy, an increasing unemployment in the US and the first signs of real poverty and hunger among the lower 20 percent of the American population in rural areas and small cities. Medium and large cities will devolve into increasing violence (crime) and inconsistent delivery of energy and services.

Of course, the backdrop to this scenario requires something that muzzles the public from strident criticism of their respective sovereign governments. Expect increased tensions and military action against Syrian and Iranian regimes.

Many of my readers have asked why the economy, or the dollar, has not crashed yet as expected and predicted by post-keynesians and non-keynesians.

The reason is that Bernanke, Geithner, Christine Legarde and other world banking and finance leaders will continue to push money printing as the only option to maintaining the economy afloat. They believe they can manage the deflation occurring across the globe and then gradually inflate the economy to promote, at minimum, meager growth.

How long can this last?

I have written previously that I expected sideways movement in the economy with a sharp possibility of a major downturn near the end of this year. In fact, I have advised the acquisition of physical silver and gold and a beefing up of home pantries.

Interestingly, Steve Keen, who has argued the situation is untenable, admitted the process can continue for some time. He seemed shocked, for example, that England has such a high private and public debt burden and has not experienced a crash in the economy.

As I have written before, most analyses do not take into account the lower 20 percent of the US workforce which has now achieved chronically unemployed status. The current US administration has tried to manage this by increasing food stamps, disability status and unemployment benefits. At the same time, the Obama administration has increased the power of government to manage “crises” by eliminating habeas corpus and, more recently, by issuing an executive order to control the internet in case of emergency. This is a classic case of hope for the best and prepare for the worst.

I believe we are 6 months away from a major crisis that may unleash unexpected convulsions around the country and the world. Yet, I believe it is likely the lower strata and the elderly will feel it more while things will remain seemingly calm on the surface. In my view, it is not surprising depression and suicide has jumped among those over 65.

Ironically, the banks and the bankers are flush with cash but the thinking among Bernanke and friends is that bankers should get the cash instead of people because they will loan it out to businesses. I have yet to hear how they intend to generate demand from people for the products those businesses will produce. Trickle down economics is alive and well.

In the meantime, I am eating squash and cucumbers and tomatoes and peas from my garden as well as eggs from my chickens. You may want to consider such a lifestyle as we move into the Greatest Depression circa 2012-2013.

The general malaise of the stock markets around the world and the inexorable slowdown of economic growth in China and Europe have brought the world to the brink of financial disaster.

Yet, Ben Bernanke and his allies around the world firmly believe that with enough monetary inflation, it is possible to deleverage private and sovereign debt in a manageable fashion. They are convinced they can manage the deleveraging such that retail hyperinflation does not occur. Post-keynesians don’t believe this is possible.

One commentator asked whether the economic system can simply be reset by eliminating zeros from the fiat currency as happened in Mexico and Argentina. Is it possible? It certainly is, however, it poses a severe risk to the bottom 20 percent of the population that would have to absorb the loss of wealth.

Another analyst asked if there is anything President Obama could do to help the system recover. There are three things he could do, none of which he will do. Cut spending, raise taxes and establish a new currency outside the control of the Federal Reserve.

Unfortunately, Mitt Romney will similarly refrain from doing what is necessary. Most current analysts are predicting lower unemployment and a sluggish recovery in 2013 regardless of who is President. The underlying support of the system by the Federal Reserve lends support to this idea.
However, it is more likely the fourth quarter of this year will see massive QE from the Federal Reserve. As I suggested in my article in December 2011, if QE3 goes public, Obama goes down.

The reason is simple, QE3 will be an admission by the Federal Reserve that artificial support of the banking system has not, is not and will not work.

Expect talk about a new currency system, a sharply correcting stock market and continued financial stress among the middle and lower income strata of Americans.

The time has come for last minute stocking of emergency food pantries and safeguarding your money away from the banking system. Don’t be caught flatfooted. By the time the panic sets in, you may lose your bank deposits. If you have any kind of flexibility, you are well-advised to acquire silver ounces such as the American Eagle or the Mexican Libertad ounces. They offer a fallback security in case the banks seize your assets.

If monetarchy sycophants are to be believed, the second quarter of the year is revealing a moderate recovery and the stock market continues to move sideways with a gradual inflation of its value. Never mind that behind the so-called recovery is a monetarchy working furiously to prop up the system with federal reserve notes.

Meanwhile, on main street the closure, of entertainment and retail venues that thrive on disposable income, has become epidemic. Unemployment continues to rise and the underemployed that usually took the crumbs of those changing jobs or taking a holiday are now chronically out of work. This army of unemployed poses a direct threat to local urban stability and neighborhood security.

Look for continued sideways movement of the stock market through the summer and masterful political spin by the Democratic administration. On the Republican side, expect Republican challenger Mitt Romney and Paul Ryan to continue the drumbeat of the need for changing economic priorities. The problem, of course, is that neither party will propose real solutions to the underlying shift in political and economic power. They are powerless to challenge the monetarchy that now dominates the world.

It is important to note that some political leaders, such as those in Israel, believe they can still act unilaterally without considering the consequences of their actions to the monetarchy.

In the conventional political models of international relations, war is a means of acquiring resources or shifting attention of the people from their direct self-interest. Many, in the US for example, continue to decry “false flag” events. However, under the monetarchy model of globalism, war cannot serve that previously useful function. It destroys value and inflates fiat currencies.

If Israel continues to build up its military preparedness and pushes its war policy, it will be interesting to see how the monetarchy will exercise its power. The case study will be critically important because it will set a precedent that other so-called independent “nations” cannot afford to ignore.

As for the global financial system, the instant quantitative easing and twists and shouts from the monetarchy stops, the stock market will collapse and with it the dollar. Already, there are reports of substantial acquisitions of gold by major banks distributed throughout the globe. This indicates the monetarchy has no intention of stopping the flood of reserve notes and is, in reality, shoring up its position for a major change in its internal organization and asset distribution and control system. In other words, it is implementing its global consolidation of power through its financial and banking arms.

For the time being, the flood of federal notes will continue in the trillions of dollars. The only question is how long it can prop up the international system as currently configured. It is unlikely the system, as it is now constituted, can survive for very much longer.

Interestingly, most regular people will notice the quiet desperation of people sinking financially while banks accumulate stronger and stronger balance sheets. The irony will not be lost on those minimally educated in conventional economics.

The Monetarchy will have to make its move soon and it is likely that some form of gold/silver backed currency will come into existence. However, this may not necessarily translate into a benefit for individuals holding metals. It is too early to tell whether the monetarchy will outlaw metals sales of institutions and agents that exist outside its direct control.

In the meantime, the major challenge facing those in power is how to manage the social upheaval the collapse of the current fiat currencies will bring with it. Already the current US administration has wrought a substantial rewrite of cherished constitutional freedoms through various so-called anti-terrorist executive orders. These have become necessary in order to control the population in a condition of civil upheaval.

It behooves for those with minimal financial security to prepare for major changes in short-order. This is not a prediction but rather a description of a process that is already underway, in the present – NOW.