Bank to the Future (Fed Edition)

Is the end of the money monopoly here? [Altucher Confidential] November 02, 2022 [WEBSITE]( | [UNSUBSCRIBE]( Is this the end of the government's money monopoly? Very likely so. But what’s next? [Hero_Image] Bank to the Future (Fed Edition) By Chris Campbell Washington’s “nuclear option” has just been activated ThIt has nothing to do with a missile, or a warhead. Instead, it’s an economic nuke buried deep at the heart of our economy. A nuke they plan to detonate Wednesday, November 2nd. The ones who see this coming have the chance for massive profits… The ones who don’t could be facing a lifetime of financial ruin… You don’t want to be one of the victims caught in the coming fallout. [Here’s what you need to do to prepare now.]( [Chris Campbell] CHRIS CAMPBELL “The public’s trust is the Fed’s most important asset,” Jerome Powell said today during his post-rate hike pep speech. The worst thing that could happen to the Fed is they lose their street cred. And the Fed knows it. Thing is, they had it pretty easy before all of this went down. Some might accuse them of resting a little too hard on their laurels, basking in an unjustified sense of bravado. Consider that the Fed’s credibility was established on decades of relatively low inflation. From 1983 to 2020, most of the general public trusted that the Fed could (and would) do what it took to protect the almighty dollar. And, by the looks of it, they did. Masterfully, even. But was it all a mirage? Cause or Effect? The real question: Was low inflation the cause of the Fed’s credibility or the effect? Consider demographics. In 2016, economists Mikael Juselius and Elod Takats showed that baby boomers increased inflation by 6% in the US between 1955 and 1975. But then, they drove down inflation during their prime working life between 1975 and 1990. Another obvious driving force was globalization. China’s economic liberalization was just one catalyst that unleashed a torrent of economic activity, also keeping inflation low. Under the pretense of God-like powers, the Fed pursued increasingly aggressive monetary policies. So long as we have the public’s trust, they reasoned, we should put the pedal to the metal. But, increasingly, the gig became a little tougher. And then a little tougher still. And then came 2020. A New Era Stick a virus in a biosphere of global aging populations, deglobalization, economic lockdowns, an invasion in Ukraine, and more than a dash of weaponized incompetence, shake it up a bit, and… no surprise… You find a Fed that no longer puffs out its chest as much on its way to the podium. Research from Edelman suggests that less than half of the US population now trusts the Federal Reserve. And not just because the illusion of control seems waning. People are also concerned that the Fed is becoming too political. The Tragic Thing About Tragic Things Once a strictly monetary institution, the Fed now admits to focusing on a “broad-based and inclusive goal” which includes social justice, climate change, and gender equality. While most people want to live in a fairer, cleaner, more just world… The idea that the Fed is equipped to manipulate the economy into morality sounds a lot like the beginning of one of those history documentaries that asks the question: “What went wrong? And why didn’t anybody see it coming?” One underappreciated thing about mass-tragedy is… people do see it coming. Lots of people see it coming. It’s just that those steering the beast are either too ignorant, stubborn, or malignant to change course. And too many other people believe them when they say, “You have nothing to worry about. This is the way.” But perhaps, this time, the Fed’s loss can be our gain. On that note… In today’s featured article below, our colleague Jeffrey Tucker raps about the death of paper money… the signs of impending panic… and what comes next. Read on. Urgent Notice From Paradigm CIO Zach Scheidt! [Click here for more...]( Hi, Zach Scheidt here… I’m the Chief Income Officer at Paradigm Press. With inflation raging (and showing no signs of coming to an end any time soon), almost everyone in America is feeling the pain in a big way. Which is why, several months ago, I set out on a big mission… my goal was to create a [complete, step-by-step plan to surviving and beating inflation…]( one that anyone could take advantage of. Today, after hundreds of hours of research, I’m revealing all of my findings. [Simply click here now to see how to survive America’s deadly inflation crisis.]( A World Awash in Paper Money Jeffrey Tucker Look at a few of the most salient facts of our time. On February 3, 2020, the M2 money supply stood at $15.3T. Today, as of October 2022, it stands at $21.5T. That’s an insane increase in a mere two years. And contrary to what is being advertised, there is no real evidence of a current tightening beyond some small perfunctory moves. This is a monetary experiment we’ve not seen in the U.S. since colonial times when worthlessness was measured against the most worthless thing of all, the Continental currency. The notion that this ends smoothly is utterly ridiculous. What’s more, at this point, the Fed is not necessarily in control. Velocity statistics show there is tremendous potential for far more inflation in our future. Banks don’t control that. People do. And we are already starting to see a shift in spending patterns. The savings rate keeps falling as consumers and businesses spend down the assets they socked away for two years. Gross private savings is lower today than before the lockdowns. Personal savings is running at 6.2% from a high of 33%. The money is running out and now personal debt is on the rise: a large increase of the trend in 2021 and following. Now, you could say that maybe this is smart: take out the loan and pay it back in cheaper dollars due to inflation. Perhaps, but more likely this is too clever by half. The actual reason is more simple: people need the money to sustain a lifestyle in the face of growing pressure from all ends. It’s not absolutely crazy to speculate on the worst possible outcome: the death of paper money. We’ve been there before, many times and in many places. We can look back at the historical cases and marvel at the stupidity of the money masters for having allowed such a thing. And yet, it is not obvious to me that we have brighter bulbs at the helm in the U.S. and the EU today. What these people have done is utterly crazy. What’s the Replacement? In former times, when money came under pressure, there was one obvious choice in gold, which only became demonetized in the early 1970s. To rally around it seemed inevitable. Today we have access to something else, namely tokens living on distributed and encrypted ledgers that are forced into scarcity by fixed and trusted protocols. That sounds like a word jumble but so it is with new technology; it always comes with a new vocabulary. There is a crowd of people out there with whom I have sympathy but not full agreement. They are called “Bitcoin maximalists.” They truly believe — and will keep you up all night arguing the point — that old-fashioned Bitcoin is the only currency worth holding, that all other platforms and uses apart from money are mostly illusions, and that the old way to win in this game is to buy and hold. It’s a severe view. And there’s some empirical evidence so far that this has generally turned out to be a winning strategy. And yet how long will it last? Maybe much longer but think even longer term. The traditional function and properties of money have undergone a profound shift, away from the merely physical and toward the technological. This means that money has to be evaluated based on its serviceability. By 2024, Bitcoin will bump into a strange problem. It stopped scaling due to a limitation imposed on its block size. What was cheap and fast became expensive and strangely slow. That fed the first big fork of Bitcoin and all its myriad competitors. It strains credulity to denounce them all as complete frauds, as the maximalists do. It’s not entirely crazy that we gradually enter a world of competing digital currencies, too many even to follow. This school of thinking could be called “competition maximalists.” There is no one winner for all time. The evolution of money will be an ongoing process forever. We should recall that the purpose of money is not merely to enrich its holders but to deploy in market exchange. And the fact remains that many other tokens other than Bitcoin are more suited to daily use. Dogecoin is an example. It’s the troll coin that became real. The Bitcoiners celebrate their second-layer solutions that achieve speedy and cheap trading with the Lightning network, and after many years of development, it does indeed seem viable. To me, that technology always seemed more like a hack to solve a problem that didn’t need to exist. There are many tokens out there that achieve the same result without the added complication. In addition, in a world in which anything can serve as money, the service tokens themselves can obtain a market via their use in smart contracting and the crypto market generally. It’s going to be ever harder for governments to make the case for regulations and crackdowns on these developments, so long as their nationalized currencies are failing. Crypto might be volatile, edgy, sometimes scary, and overly complicated technologically but at least they are not relentlessly sinking in value never to return. Signs of Panic US political culture lit up recently due to the Biden administration’s creation of a Disinformation Governance Board headed by a severely woke millennial who has a long track record of opposing free speech. Yes, it is chilling. Straight out of Orwell: the Ministry of Truth. The new head of the office wrote the following on March 21, 2020: “I think we as a country might be too... um, free-spirited?! (to put it diplomatically) to comply with social distancing recommendations unless they’re forced upon us. So force away! Lock us down. People are not taking this seriously.” If the regime had any real confidence in its plans and really did believe that it was making things better, not worse, nothing like this would be deployed. Its creation is a terrible sign that the regime trusts neither reality nor the public’s perception of it. Fortunately, the attempt has faced wide ridicule and outrage. In any case, we already know that government has worked very closely with Big Tech to censor and control, and this has been going on for years now. It’s hard to see how the creation of a new department within Homeland Security could make it worse, except by perhaps introducing criminal penalties for disagreeing with the government. In other words: the restoration of the Alien and Sedition Acts of 1798. Don’t forget how that ended: Thomas Jefferson became president in 1800. One of the great features of crypto is that it cannot be censored, provided people own it directly, rather than use custodial services. That’s the relationship between the principle of free speech and the principle of sound money. Crypto brings both together. Tragically, we live in times when both are under fire in equal measure, but a blessing that at least has a viable technical solution. Is this the end of the government's money monopoly? Very likely so, but the unfolding of this reality will be clocked in years or decades. The Fed’s current policies seem to be dedicated to bringing that monetary future more into the present. Regards, Jeffrey Tucker Biden’s Latest IRS Move Is A Nightmare For Everyday Americans [Click here for more...]( Biden has just put everyday Americans like you into his crosshairs. As you’ve likely heard, he’s just signed into law the biggest expansion of the IRS in our nation’s history, adding 87,000 new agents… And many warn these new agents will be used to target regular Americans just like you. That’s why you need to take action right away… [Click here now for the full story.]( [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2022 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. 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