The global financial system is at the end of a debt cycle and a reset is therefore inevitable. Parasitic over-financialisation has already sucked the life out of much of the real economy, as profits accruing to speculators vastly outweigh those that can be derived from doing actual work. Many of the brightest minds have therefore applied themselves to profiting from money chasing its own tail instead of doing anything productive.
Most productive work has been off-shored from the imperial centres of financialisation to the global periphery through global wage arbitrage. Profits are higher for the owners of transnational capital when third world workers, who can be badly treated and badly paid, are substituted for first world workers with labour proections, especially the middle class. The resulting products can simply be imported back to the financial centre through globalised supply chains, for as long as those exist. Unfortunately over time this dynamic destroys the socioeconomic fabric of the centre of empire, leading to conflict, then supply chains no longer function as they once did. This has happened many times before in history, as it’s characteristic of the peak of a major bubble at the end of empire.
The financial system came close to collapse during the 2008 crisis, but was bailed out at massive public expense, and it’s been on life support ever since. It almost crashed again in late 2019 with the repo crisis, the reponse to which was to create an excuse to print trillions of dollars to stabilise it. That excuse was covid and lockdowns. It was all wargamed in advance, with Event 201, where the focus was not on health, but on control of the population. The system, now functioning in zombie form, was stabilised for another few years, but now the crisis is back. They need another excuse to print even more and control the population even more tightly, and that excuse is the war in West Asia (ie the Middle East).
The problem is that the sovereign debt market, which has been the backbone of the finacial system for decades is now teetering on the brink of a major loss of confidence. Bond yields are rising as a result, reflecting the rise in risk. The extent of current indebtedness is such that rising bond yields will push the imperial economies into a doom loop of exploding debt, where the interest rate on their bonds excedes the growth rate of the economy. The debts of sovereigns are considered assets on the balance sheets of creditors, but the debts have long since reached a scale where they have become unrepayable, hence a loss of confidence in the value of promises to repay is eventually inevitable and may occur sooner rather than later. Already there is the beginning of a shift away from sovereign debt and towards precious metals.
The US is attempting to confront this situation with a technological ‘solution’. It’s working on the introduction of stablecoins, backed by US dollars, which they intend to market globally. Issuers of stablecoins buy US treasury bills to collateralise them, meaning that if a sufficient global market can be found for stablecoins, there would be a continuous market for US debt, the burden which would then diffused around the world. In other words, the US is attempting to bail itself out at the expense of the rest of the world, and to do so through the private sector in a way that is utterly untransparent and unaccountable. The stablecoins are intended to be fully programmable, meaning that their use would be centrally controlled for the benefit of the elites. This approach is the brainschild of the technical industrial complex centred in Silicon Valley, which is attempting to seize control from the financial industrial complex, which in turn had come to dominate the military industrial complex. All three are powerful, but are in competition for supremacy.
The faction of the global elites representing the financial industrial complex, the public face of which is the World Economic Forum (WEF), is aiming instead for central bank digital currencies (CBDCs). These would also be centrally controlled, in this case through the Bank for International Settlements (BIS) and would be fully programmable. As with the stablecoin approach, ordinary people would have access to very little purchasing power, and no control over what that purchasing power could be used for or where it would be allowed to function. Financial geofencing of the population would be simple. So would forcing people into nutritionally deficient diets by preventing them from purchasing healthy food. The WEF frequently discusses the need for people to eat insects rather than meat for instance. Medication (not for health but for maintaining the profits of the pharmaceutical companies while further weakening the population) could be forced on people under threat of cutting off their purchasing power. Dissenters from any government position could easily find themselves completely disenfranchised and unable to purchase anything at all. Freedom of association would be compromised digitally through surveillance, in order to prevent any form of organised resistance.
Both the stablecoin system and the CBDC approach are effectively slavery systems meant to keep the population from being able to react or effectively adapt appropriately to the coming deprivation. Specifically, the elites want to prevent the population from blaming them for the debacle and acting collectively to punish them for it. The only real differences are who will be in overall control of the system and where the benefits of that control would flow to.
Besides an excuse to print money, the war will absolutely guarantee a huge amount of demand destruction, as the lack of energy is going to collapse global supply chains. Energy and GDP are extremely tightly correlated on the way up, but on the way down the effect of energy loss is going to cause a disproportionately large loss of GDP, due to the effect of physical systems for trade going offline.
That demand destruction is sadly going to lead to a great deal of population destruction, with famine being a primary mechanism as fertiliser supply is being substantially compromised. The spring planting season in the northern hemisphere has a short window, and that window is being missed due to both lack of fertiliser and the high price of diesel for the necessary equipment. Some farmers may be able to plant something, but with little or no fertiliser the eventual yields would be way down. Add to that the potential for diesel to be completely unavailable by harvest time, and empty shelves in the supermarkets become highly likely. Events Sri Lanka from a few years ago are a preview of what’s coming. A shift away from commercial fertilisers caused yields to crash and led to a wave of societal unrest.
The southern hemisphere is moving into winter with severe fuel shortages looming. Heating of homes may become problematic, especially in uninsulated homes, and many people, particularly the elderly, are vulnerable to cold. The potential for spring planting in a few months will be substantially compromised at best, and perhaps impossible. Even pasture farming requires a great deal of land and fuel-hungry equipment to manage the large herds and flocks and to take hay off the fields. None of this may be possible if diesel becomes not only expensive, but unavailable, as appears likely in places like Australia and New Zealand due to their position at the far end of a long and vulnerable supply chain for fuel.
Crises are created when necessary to kick the can further down the road, in order for the financial system to live another day. Unfortunately this can only work for so long before the physical system starts to unravel, and once that happens, restoring that level of complexity, developed incrementally over decades, will not be possible, especially in a permanently energy-constrained world. The constraint will be permanent due to the ongoing destruction of physical infrastructure, and damage to oil and gas fields that will have to be shut in. Fertiliser requires energy to produce, so it will also be permanently reduced. This will effectively reverse the Green Revolution which had allowed for continuous population increase for decades, at the expense of creating structural dependencies on fuel, fertiliser, pesticides, and seed controlled by multinationals. Much biodeversity that allowed for successful subsistence agriculture in diverse climates was lost in the process. Now that the vulnerability caused by those structural dependencies is about to be realised, carrying capacity is going to fall worldwide. Carrying capacity is the number of organism a given area can support with degrading the means of that support over time. Desperate people are likely to eat anything that moves and cut down forests for fuel. It’s quite plausible that the current peaking of finance and energy simultaneously, by design, combined with the destruction of substantial amounts of critical infrastructure, could be intended to get the process of population reduction over with as quickly as possible in order to preserve carrying capacity. Too many of our leaders are psychopaths who treat the rest of the population as dispensible. They may well be thinking this way.
