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Entering the Belly of the Epocalypse

William Blake [Public domain], via Wikimedia Commons

Only a couple of weeks ago, I said we were entering the jaws of the Epocalypse. Now we are sliding rapidly down the great beast’s throat toward its cavernous belly. The biggest economic collapse the world has ever seen is consuming everything — all commodities, all industries, all national economies, all monetary systems, and eventually all peace and stability. This is the mother of all recessions.

That’s a big statement to swallow, especially when many don’t see the beast because we’re already inside of it. You need to look down from 100,000 feet up in order to observe the scale of this monster that is rising up out of the sea and to see how rapidly it is enveloping the globe and how the world’s collapse into its throat is accelerating. The belly of this leviathan is a swirling black hole, composed of all the word’s debts, that is large enough to swallow every economy on earth.

Mexican retail billionaire Hugo Salinas Price has looked long into the stomach of this mammoth, and this is what he has seen:

 

[Global] debt [as a percentage of GDP] peaked in August of 2014. I’ve been watching this for 20 years, and I have never seen anything like it. It was always growing, and now something has changed. A big change of this sort is an enormous event. I think it portends a new trend, and that trend will be to get out of debt. Deleverage and pay down debt. That is, of course, a contraction. Contraction means depression. The world is going into a depression. It’s going to get very nasty. (USAWatchdog)

 

So, let’s step back and look at the big picture in order to see how immense this thing is: (One thing that you’ll notice is common in the statements of many sources below is comparisons to 2008, when we first entered the Great Recession. You hear that comparison every day now, which says many people feel that, after piling on trillions of dollars and trillions of euros and trillions of ___ in debt to save ourselves, we are right back where we started … but exhausted from the effort.)

 


Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy


 

Toxic debt flush heard round the world

 

As Hugo Salinas Price warns, toxic debt may have hit a ceiling where it has stopped going up because individuals, industries, and now nations have reached real debt limits they cannot support. According to the New York Times, toxic loans around the world are weighing heavily on global growth:

 

Beneath the surface of the global financial system lurks a multitrillion-dollar problem that could sap the strength of large economies for years to come. The problem is the giant, stagnant pool of loans that companies and people around the world are struggling to pay back. Bad debts have been a drag on economic activity ever since the financial crisis of 2008, but in recent months, the threat posed by an overhang of bad loans appears to be rising.

 

The Times lists China as leading the world for personal and industrial bad debt at $5 trillion, which in terms of its economy is half of China’s GDP. As a result of hitting this ceiling, Chinese banks reeled in lending in the last month of 2015.

And this is just bad debt. It does not include debts that are being properly paid or China’s national debts. These are the loans already failing. Likewise with the global debt problem The Times is writing about. Bad loans in Europe, for example, total about $1 trillion. Again, that’s just the loans that are already falling into the abyss.

Many national debts are more than the entire annual GDP of the nation, including the enormous US national debt, which will reach $20,000,000,000,000 by the time the next president takes office. (You can’t even see wide enough to focus on that many zeroes at the same time. The “2” gets lost in your peripheral vision.) And many places like Greece and Brazil and Puerto Rico are defaulting on their debts.

The United State’s debt alone is only payable so long as interest rates stay near zero; but rates are now rising, and the number of financiers has greatly retreated. The only thing to save the US from its toppling debt problem in the short term may be that people all over the world run to the shelter of US bonds when everything else is caving into the black hole.

 


Between Debt and the Devil: Money, Credit, and Fixing Global Finance. One of Financial Times Best Economics Books of 2015. “A devastating critique of the banking system. Most credit is not needed for economic growth — but it drives real estate booms and busts and leads to financial crisis and depression.”


 

Bulls become bears

 

The first sign that this global change is now consuming the US is in how many of the market’s permabulls are becoming neobears and which sizable institutions are making the switch quickly. Citi has been bullish over the years, but now they have stepped out of the back half of the bull suit and put on a toothy bear suit, expecting oil to drop to the mid-twenties and geopolitical change that “is maybe unprecedented for the last decades”:

 

The global economy seems trapped in a “death spiral” that could lead to further weakness in oil prices, recession and a serious equity bear market, Citi … strategists have warned…. “The stakes are high, perhaps higher than they have ever been in the post-World War II era.” (Yahoo)

 

Here’s a 100,000-foot-high look at the US stock market that is now swirling down the throat of the beast: Last year, the number of stock dividend reductions surpassed 2008. In fact, 2015’s number of cuts — now that the year is barely past — was 35% higher than the number of cuts going into the Great Recession. That gives you some sense of the scale of corporate pain that is just starting to be felt. Companies cut dividends when they have less profit to share with their owners. Bloomberg referred to it as “equity investors … suffered death by 394 cuts.”

Another high-view snapshot of corporate collapse can be see everywhere in US retail: Walmart, Macy’s, J.C. Penny’s, K-Mart, The Gap and many smaller retailers have all announced a large number of store closures and layoffs to come.

US Corporate earnings across all industries are on track for their third quarter in a row of year-on-year declines. That is an ominous signal because back-to-back periods of decline for just two quarters are always followed by a decline of, at least, 20% (a bear market) in the S&P 500.

 

This weakness in overall corporate earnings growth could bode badly for the broader stock market, as it represents the actual impact of geopolitical concerns, the slowdown in China, the weakness in oil prices and productivity, said Karyn Cavanaugh, senior market strategiest at Voya Investment Management. “Earnings discount all the noise…. It’s the best unbiased view of what’s going on in the global economy.” (MarketWatch)

 

As earnings fall, the much watched price-earnings ratio gets more top-heavy, putting pressure on stocks to fall. Thus, on Friday:

 

The willingness of U.S. stock investors to abide price-earnings ratios stretching into three and four digits all but ended Friday as the Nasdaq Composite Index fell to its lowest since October 2014. The … tumble in American equities turned into a full-blown selloff in stocks with the highest valuation. The Nasdaq Internet Index sank 5.2 percent, as Facebook Inc. lost 5.8 percent. (NewsMax)

 

The most significant part of this picture is that tech stocks have finally started making the big drop with the few that have been holding the stock market’s average up being the ones now taking the biggest plunge. Facebook, Amazon, Apple, and Microsoft are all falling fast. LinkedIn is getting “destroyed.” The time at the top is over, which leaves the market with zero levitation. Therefore, it’s no surprise that we saw another major sell-off on Monday.

Said USA Today, Bye, Bye Intenet Bubble 2.0,” calling this “the worst start of a year for technology stocks since the Great Recession.

 

Collapse of the petrodollar opening sink holes everywhere

 

It’s no secret that Russia has outlawed trading oil in dollars among its satellite nations and that China and Russia trade in yuan now, not dollars, but Iran is the latest to stick it to the US, announcing that it will no longer trade oil in US dollars either but will sell its oil only for euros. So, we have the gargantyuan and the petroeuro, taking major bites out of the petrodollar now. China and Russia have also been divesting from US treasuries for some time and investing in gold, something I started point out here a few years ago.

All of this means that the US dollar is rapidly ceasing to be the trade currency of the world, and that prized status is the only thing that has made the US national debt manageable over the years, as the high demand for trade dollars guarantees low interest on the most colossal debt in the world because national treasuries and businesses sop up US bonds as a safe way to store trade dollars. The Federal Reserve has become the buyer of last resort for US debt; but it has maxed out.

The move away from the petrodollar is momentous. Losing its status as the reserve currency of the world will take a massive bite out of US superpower status, and that, of course, is exactly what Russia, China and Iran are counting on. With so many countries now trading oil exclusively in non-dollar currencies, one has to wonder how much longer overstretched Saudi Arabia can hold out as an oil supplier that trades oil only in dollars. Most likely they will feel a lot of economic pressure to start trading in other currencies, especially now that US support of Saudi Arabia appears to have weakened.

Iran’s announcement may be why the dollar dropped drastically in value last week. The high value of the dollar makes oil very expensive to other nations, who have to convert their low-valued currency to dollars to buy oil. This is surely another reason the price of oil has been falling, though almost no one talks about it … almost as if the economic geniuses of the world can’t figure this simple relationship out. As nations compete to lower the value of their currency with zero interest policies and quantitative easing, they are burying the petrodollar.

In nations with currencies priced very low compared to the dollar, oil is like an American export — too expensive for people in that nation to afford, causing demand to fall off and, thus, further increasing the problem of oversupply and lowering the price of oil. This creates another big reason for many nations to want to stop trading oil in dollars.

I’ve been reporting on this site for a few years now on this global campaign to kill the petrodollar, and that campaign is finally nearing maturity. For the US, it will mark a horrible transformation in the world, as it will hugely erode US superpower status because it will become much more difficult to finance a massive military machine.

 

The banks that are too-big-to-fail are falling FAST!

 

Deutsch Bank‘s derivative bonds (the kind that caused the Great Recession) are pealing away. The top-tier bonds of Germany’s largest bank have lost about 20% since the start of the year. Investors are fleeing as tumbling profits cause them to doubt the issuer’s ability to support the coupon payments on the bonds. InvestmentWatch reports that “Deutsche Bank is shaking to its foundations” and asks “is a new banking crisis around the corner?” DB stock has fallen off its high last July by 50%.

By how much is Deutsch Bank too big to fall? DB’s exposure to derivatives is over 55-trillion euros. That’s five times more than the GDP of the entire Eurozone or three times the amount of debt the United States has accumulated since it was founded. It’s CEO says publicly he’d rather be somewhere else. Looking up at a leaning tower like that, I imagine so.

As DB bleeds red ink from its throat, its cries to the European Central Bank are burbled in blood. DB has warned the central bank that zero-interest-rate policies and quantitative easing are now killing bank stocks, but that didn’t stop giddy ECB president, Murio Draghi, from announcing a lot more easing to come … as much as it takes. As much as it takes to what? Kill all of Europe’s banks now that stimulus is working in reverse with negative interest making new money in reserves expensive to hang on to?

Is the ECB waging war on it major banks, or is it just too dumb to realize that QE is far beyond the high point on the bell curve of diminishing returns to where it is now killing stock values while doing nothing to boost the economy? (Hence, the move to negative interest rates to go to the ultimate extreme of easing because you have to push the accelerator through the floor when returns are diminishing that fast). As ZeroHedge has said, we are now entering a “monetary twilight zone” where …

 

Europe’s largest bank is openly defying central bank policy and demanding an end to easy money. Alas, since tighter monetary policy assures just as much if not more pain, one can’t help but wonder just how the central banks get themselves out of this particular trap they set up for themselves.

 

Credit Suisse reported a loss of 6.4 billion Swiss francs for the fourth quarter of 2015, suffering from its exposure to leveraged loans and bad acquisitions.

 

DoubleLine Capital’s Jeffrey Gundlach said it’s “frightening” to see major financial stocks trading at prices below their financial crisis levels…. “Do you know that Credit Suisse, which is a powerhouse bank, their stock price is lower than it was in the depths of the financial crisis in 2009?” (NewMax)

 

Credit Suisse has announced it will cut 4,000 jobs after posting its first quarterly loss since 2008. The Stoxx Europe 600 Banks Index has also posted its longest string of weekly losses since 2008, having posted six straight weeks of decline. The European Central Bank’s calculus says banks in Europe should be benefiting from QE, but it’s clearly lost all of its mojo or is now  actually more detrimental than good like a megadose of potent medicine. Negative interest rates are particularly taking a toll because banks have to pay interest on their reserves, instead of making interest.

Banks have rapidly become so troubled that NewsMax ran the following headline “Bank Selloffs Replacing Oil Rout as Stock Market Pressure Point.”  In other words, bank stocks are not just falling; they are falling at a rate that is causing fear contagion to other stocks. It’s not easy these days to beat out oil as a cause of further sell-offs in the stock market.

How quickly we moved from a world of commodity collapse to what now appears to be morphing into a banking collapse like we saw in 2008. Financial stocks overall have lost $350 billion just since 2016 began. Volatility in bank shares has spiked to levels not seen since … well, once again, 2008.

Consider how big the derivatives market is — that new investment vehicle that turned into such a pernicious demon in 2007 and 2008 because they are so complicated almost no one understands what they are buying and because they mix a little toxic debt throughout, like reducing the cancer in one part of the body by spreading its cells evenly everywhere. Instead of learning from the first crash into the Great Recession, we have run full speed into expanding this market. Estimates of the value of derivatives in the market range half a quadrillion dollars to one-and-a-half quadrillion dollars (depending on what you count and whether you go by how much was invested into them or their face value). Either way, that’s a behemoth number of derivatives floating around the world, many of them carrying their own little attachment of metastasizing toxins! (That’s, at least, a thousand trillions! More than ten times the entire GDP of the world.)

Still think 2016 isn’t the Year of the Epocalypse? Well, if you do, the rest of the ride will convince you soon enough. If I were the Fed, I’d be really, really worried that my star-spangled recovery plan was starting to look more like Mothra in flames.

 

The oil spillover

 

But don’t think oil is loosing its shine as a market killer. Another bearish prediction by Citi, now that it has change suits, is to expect “Oilmegeddon.” (Hmm, sounds like something that would be found in an epocalypse to me.)

 

“It seems reasonable to assume that another year of extreme moves in U.S. dollar (higher) and oil/commodity prices (lower) would likely continue to drive this negative feedback loop and make it very difficult for policy makers in emerging markets and developing markets to fight disinflationary forces and intercept downside risks,” the analysts add. “Corporate profits and equity markets would also likely suffer further downside risk in this scenario of Oilmageddon….We should all fear Oilmageddon,” Citi concludes. “Global recession, as we define it, would leave nowhere to hide in equities. Cash wins.” (NewsMax)

 

In the first months of the crush in oil prices, most analysts felt that the only companies that would be seriously hurt would be marginal fracking companies — the speculative little guys jumping into the oil shale. Now that fourth-quarter results are coming in from the world’s largest refineries, we find that isn’t true:

 

British Petroleum kicked off the European oil and gas reporting season with an ugly set of fourth-quarter results. The company reported a sharp drop in earnings for the fourth quarter. It’s own measure of underlying profit dropped 91%.… All of this is a recipe for two things — more cost cutting and more job cuts… What’s worrying for investors is that the first quarter, so far, doesn’t look much better. (MarketWatch)

 

That’s massive. BP has already announced the elimination of 7,000 jobs. Chevron and Shell also saw profit declines. Royal Dutch Shell has announced it will be making 10,000 job cuts.

If that’s how bad things got during the fourth quarter of 2015, imagine how bad they will get this quarter now that oil prices have gone down a lot more. Hence, the talk of “Oilmageddon.”

As if the industry wasn’t already burning up, President Obama is trying to impose a $10 carbon tax on each barrel of oil. At today’s oil prices, that is a 30% tax. At tomorrow’s prices, it may be a 50% tax! One has to wonder how far out of touch economically, a president can get in order to propose a hefty tax like that at a time like this.

Naturally, oil magnate T. Boone Pickens calls it “the dumbest idea ever.” While I have a general hatred for gigantic oil companies, especially since gasoline prices in my area have not dropped much, I have to agree that a $10/barrel carbon tax could cinch the noose around the neck of an already strangle industry.

Maybe that’s the plan. While the tax would hit the end user more, no tax helps an industry thrive.

 

The Epocalypse swallows everything whole

 

The reason the Epocalypse is going to be a far worse bloodbath than the first plunge into the Great Recession is that all of the central banks of the world have, by their own admission now, “exhausted their ammunition” to fight back against another recession. Back at the start of the Fed’s Goliath recovery plan, I posited that we would be falling back into the abyss right at the time when all central banks had exhausted their strength and when all nations had maxed their debt.

Here we are.

Many central banks are already doing negative interest; yet, their economies are still sinking. It appears that more negative interest could actually sink them faster by eroding their banks with internal ulcers. It will certainly require going cashless in order for those banks to start handing the negative interest down to their customers. They have to absorb the cost of negative interest if they cannot loan out their funds fast enough. That’s why some banks are now pleading with their government’s for a cashless solution … so they can prevent their customers from switching to the cash-under-the-mattress exit plan.

The world faces a tsunami of epochal defaults. William White, former economist for the International Bank of Settlements, says,

 

Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief…. It was always dangerous to rely on central banks to sort out a solvency problem … It is a recipe for disorder, and now we are hitting the limit… It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something. (The Telegraph)

 

We have finally reached that time in our decades of astronomical debt-based economic expansion where it is time to pay the piper. We travelled blithely along many decades on currency cushions filled with hot air. In an article titled, “Debt, defaults, and devaluations: why this market crash is like nothing we’ve seen before,” The Telegraph says,

 

A pernicious cycle of collapsing commodities, corporate defaults, and currency wars loom over the global economy. Can anything stop it from unravelling…? Commodity prices have crashed by two thirds since their peaks in 2014…. China, the emerging world, and financial markets – are all brewing to create a perfect storm in a global economy that has barely come to terms with the Great Recession…. “We are in a very unusual situation where market sentiment is of a different nature to anything we’ve seen before.”

 

Yes, this is the big one. The times we now face are the reason I started writing this blog four+ years ago. The Federal Reserve’s Goliath recovery plan was cloned all over the world for seven years, and for seven years all nations have done nothing to rethink their debt-based economic structures that are now cracking and groaning and falling into … the Epocalypse.

 

Between Debt and the Devil Adair Turner, the former chairman of Britain’s Financial Services Authority and described by The Economist as a man for all policy crises, upends financial orthodoxy…. He argues that nothing regulators have done thus far has addressed the fundamental underlying cause of financial instability.

 

The Death of Money: The Coming Collapse of the International Monetary SystemCode Red: How to Protect Your Savings From the Coming Crisis

  • When will people understand that credit is not money; it is debt. Paying debt with credit, shifting from one credit card to another, is kicking the can down the road. In the process, the can gets bigger. It becomes a dumpster. Good news though, easy credit has made dumpsters more valuable in a relativistic way. They become rare tulip bulbs in a narrow view, but when the view widens, oops – dumpsters everywhere, and the rent becomes harder to pay, as the money spent has very little in terms of durable, saleable assets to liquidate. Vacation pictures, out of fashion clothes, aging vehicles, abused furniture, trinkets – getting a few bucks in a yard sale or at the pawn shop. Refinancing, rather than repaying has been supported by balance sheet fictions where asset valuations conveniently match or exceed debt. Windfall expectations of being able to payoff the debt and walk away with equity persist. Yes, some of that did occur in the past. In fact it was the only way to stay in the homeownership game, as prices rose beyond what 2.5 x income would buy. An income of $20K could buy $50K with 10% down. That was the 1970s. Value inflation took off, but if you property value doubled in ten years, if you cashed out, all you could buy was equivalent to the original purchase. You’d still have a mortgage, and not own the ranch free and clear. This is the goal so by retirement there’s no house payment. It is only necessary to pay taxes, operating costs and maintenance, and upgrading improvements. Home equity is not an ATM. This delusion has been sold to humans by fee seeking MBA thinking where borrowed money, other peoples money, is the game. They’ve sold us on risk/REWARD. Thanks to behavioral economics they know how and when to reward us in the casino of financial gamesmanship to keep us in the game, anticipating, dreaming of the jackpot that enables getting back to zero with bucks for a new stake. Nouriel Roubini in 2008 said the players were “gambling for redemption”. That’s the entire game now. The “profit motive” has failed, not industrial capitalism. Financial capitalism, as explained by Michael Hudson, is predatory as it seeks to make money with money, but not the old fashioned way, by creating value which helps perpetuate and advance human civilization, the greater “community motive”. Also Leopold wrote about “community motive” in 1944. It is, I think a valuable concept and one I work to promote. The most important things we do in life we are not paid for. There are many examples in our lives; parents, grandparents – ancestors who survived difficulties, as well as the pioneers in all fields who advance knowledge, wisdom

    • Many good nuggets crammed in there, Tom.

      • Agree. Don’t know what correction might be. It is a moral problem more than economic – “its just business” means lying/fraud is just “asymmetric information”, as one economist told me. Economists don’t know what money is, what banks do and that markets can be manipulated. Regulations can be used by large entities to keep smaller players out of the market, yet the regulators can be intimidated, ignored and controlled via political influence – the cops can be kept off the road or toothless, or simply untalented agents.

        • Economists don’t seem to understand that stuff — other than classically trained economists like Stockman, I think those of the Austrian school get it, but they seem to be the minority — at least in the US. All the more shame heaped upon those economists who don’t understand things so crucial and central to the working of an economy. Most of them don’t even seem to get the basic economic Law of Diminishing Returns. It passed right over their heads that you get less and less for your money as you do something like Q.E. to where eventually it becomes useless. Eventually you hit a point where you can actually go in reverse and see the opposite effect to what you intend happening from your actions, which is where they pushed it to now that they are having to push the lowering of interest rates so hard that they go negative.

          –David

  • jakartaman

    And yet the DOW is up 100 pts today! amazing
    I really feel for the younger generation – they are screwed.
    There is nothing or nobody that will or can stop this coming disaster.
    We are hearing the death gurgles now!

    • L. A. McDonough

      We knew about globalism in the 70’s, has been promoted since W. Wilson was prez. to present. We chose not to raise a family, but to keep working and help when we were able, children in group homes in our area. Younger folks have a zero future, where no amount of work will produce just reward. Not the way retirees today had when they were young. Heavy taxes on gasoline and other fuels ongoing. Foreign workers taking jobs, etc.

    • It’s a roller coaster now, isn’t it? Market finally, ends the day insignificantly down on all the major indexes. Goes up on every tiny scrap of good news, slams down on some of the bad and then ignores other bad news, usually the kind that is presented through a prism so that it looks much prettier than it is … like the last jobs’ report.

      • That jobs report is a joke. Total BS from the BLS. Most “jobs” are service sector that don’t include benefits. Actual unemployment is closer to 20% — even writers for the NYTimes admit as much.

        We are living in a slave state. Conscription for building pyramids for the 1% to start any day now…

    • Scottar
  • Debra

    USA watchdog is a resource for this info as everyone Greg has on has been saying this for years!!

  • Greetings, Dave.

    So I woke up this morning, turned on Bloomberg News at 8 am, and listened to David Stockman tell it like it is — to the horror of Stephanie Ruhle, the host, who said she needed a stiff drink.

    Stockman said bank CEOs lie about their bank’s stability even as they are in freefall, and noted DeutscheBank, whose CEO was on Bloomberg yesterday saying, “Everything’s fine!” Stockman said bank’s need to be broken up. (duh) He said the period ahead (while everyone continues to drive looking in the rearview mirror) will compare to the 1930s. Major worldwide depression. Bloomberg hosts dumbfounded since every other guest is bullish on the economy, and that this is just a “correction.”

    I’ve been reading Stockman’s blog, and it’s all there. As it is here. Just incredible how the “experts” haven’t got a clue.

    I was hoping to buy physical gold below $1k/oz, but I don’t think that’s going to happen. I’m all cash, but it’s in 5 different big banks. Should I buy a fireproof safe and stick it under the mattress? At least it won’t be confiscated when Uncle Sam takes extraordinary measures to stabilize the economy. Yeah, I’m a little nervous about protecting my assets before they disappear into the US Treasury, never to reappear!

    • Isn’t it amazing that we went right down the same “derivatives” path again. My gosh, talk about stupid. Only this time we amped it up on steroids, speed and, I think a few hallucinogens just to convince ourselves we’re fine! Stockman is the rare economist who actually gets it. (P.S. Can only imagine you trying to sleep on that safe under the mattress. Lumpy, but safer than the bank.)

      • Stockman said, to the utter bewilderment of his Bloomberg hosts (“None of our other, very smart, very financially savvy, guests agree with you, Mr. Stockman!”), that the Fed doesn’t know what it’s doing, that global debt has exploded since 2008, that bank CEOs have no idea what their debt consists of (it’s toxic), that the usual safety of ETFs and the like are filled with crap like MBDs (mortgage-backed derivatives — yes, they’re back!) and other sliced and diced products that are not only worthless, they’re worth less than zero because they’ll pull down the whole artificial structure.

        The crash of 1929 has nothing on the avalanche that’s already started.

        Yeah, I like a good night’s sleep, so no safe under the mattress for me! ;oP

        • Strange, isn’t it, how the host can look so surprised that he’d be saying this stuff and could think that the banks have actually cleaned up their acts. They have no idea how faulty everything is, and yet its so obvious once you start looking without the prism glasses that turn everything into rainbows.

          The crash seems to be picking up momentum, so I’m glad you’ve got your house in order and will be having a good sleep tonight. And here, on my farm, everything IS rainbows — a land blessed with sunshine and rain at the same time and topsoil four-feet deep. So, I’ll be sleeping well in the mountains, too.

          –David

    • Lorungee

      On the other hand, you will feel that with all that cash stuffed in your “mattress”, you would not ever want to leave your house to go to the store without worrying. Also, I’m sure the powers that be have examined every contingency possible to combat that scenario. One example would be to give cash an expiration date, to where you would have to exchange it at a bank for new bills,after a certain time, of course with less value for the new. Then when you would have to give ID at that bank, you will be recorded and noted and reported to law enforcement or other agencies as if you were committing a criminal conspiracy, (RICO anyone). Then you will be robbed by the police.

      • Definitely they have. For now cash is golden, but see my recent articles for some of the plans underway to make sure cash is gone as an escape hatch:

        Federal Reserve Economic Stimulus Plan Goes Negative!

        -&-

        Cashless Society War Intensifies During Global Epocalypse

        You are right that one thing may do is put an expiration date on cash like FDR did for turning in gold bullion by a certain date. Cash will probably buy you some time, though; but, as you say, you have to worry about theft (and also fire).

        One suggestion already floating around is that, once nations convert to cashless monetary systems, they make it appear your cooperation is voluntary by letting you keep cash at first and later putting a discount value on all cash turned into the banks. That will make people less resistant to the switch. (“You don’t have to use digital cash if you don’t want to. So, what are you complaining about.”

        Later it is announced that very few cash holders remain, most people are using digital, and hard cash costs the nation a lot to print, mint and process so, by x date, you will get 100% value in bank’s credits if you yield your cash to the bank. By 2x date, you will get 95 cents on the dollar. By 3x, 90 cents and so on until physical cash is worthless.

        This gives people who are already holding physical cash when the change comes time to see the government is serious, see their friends turning it in and losing value because they waited and to, then, decide they’d better turn what they have in before it’s worthless.

        Glad you found the blog, by the way.

        –David

        • L. A. McDonough

          I read several articles like this elsewhere about turning in cash to your credit union or bank. Many keep lots of cash stashed in fireproof home safes. Silver and gold could be declared worthless too I read several times. What is your take on gov. outlawing metals in the future. No need to vote anymore (haven’t in thirty years) since things won’t get fixed by anyone as there is a continuing downgrade economically and open borders without restraints. Politicians are controlled by globalist puppet masters anyway.

          • I don’t think they will declare silver or gold worthless. They can’t really because it has an international market; but they can force you to turn it in like FDR did. FDR basically outlawed any kind of financial gold (coins, medallions, bars). You could still have jewelry. They’d probably still allow collectibles like antique coins and certainly jewelry as some of the ladies would have a fit if you tried to get them to turn in their jewelry. When FDR did it, they set a rate at which gold would be reimbursed when brought in. I don’t recall if that was the fair-market value at the time. I suspect it was and that they locked in the rate because their own buying would hugely raise the market value. So, I supposed they would do something like that again. I mean you can only steal so directly before you get voted out of office.