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Editor’s Note, 23 Aug 2023: this annotated transcript continues to be extended.
See Also: Transcripts of Interviews and Films / Recordings
Edward Dowd:
Signposts of The Sovereign Debt Bubble Popping: What Comes Next?
Presentation at:
American Freedom Alliance Conference
“World War III: The Early Years” 22 April 2023
video, mp3 (52:52)

War is a way out for bankers. Not for us, but for bankers. There’s 330 trillion in global debt. It’s coming to a head; we’re 21 years into the 6th economic cycle as tracked by commodities.... Only 2 ways out of this problem: Default or Inflate. They’re not going to default. So war is the only palpable narrative that populations will accept to inflate with proper propaganda. []

Crisis & Panics: James Fraser 1965
M2, Year over Year Growth went Negative End of
2022: Fifth Time since 1868
Inflate or Die: The Grand Commodity Cycle 1800-2023
Bubble Blowing & Crises are Accelerating in Time &
Magnitude...Leading to Ever Increasing Fed Interventions
Evidence of Anomalies in Global Monetary System
1st Anomaly: Dollar & Commodity Inverse
Relationship flips from -1 to +1
2nd Anomaly: A Signal Trigger for Rate Hike Cycle
End Fired Off Before First Rate Hike
3rd Anomaly: Fed Reverse REPOs Explode in
Spring of 2021 ... Fed Influence Grows
4th Anomaly: M2 Growth Goes Negative Y/Y...First Time
Since 1930 & 3 Large Bank Failures Seemingly Out of Nowhere
Inflate or Die: The Grand Commodity Cycle 1800-2023
Where Are We in The Current Cycle?
Economy, Labor Force and Financial Assets
We Are Expecting a Deep Recession in 2023
According to Our Early Cycle Indicators (ECIs)
Flavors of Recession Phinance Technologies Is Expecting
Phinance Technologies Resources by Carlos Alegria
Budget Deficit Is Exploding Into a Recession
Stocks Peaked in January 2022, Commodities Peaked in
June 2022...Interest Rates peaking?...Fed Policy Error Likely
What Comes Next?
CBDC Is Likely Attempted
More Kinetic Wars Very Likely
Before Opportunities Get Your Mindset in Order!
Chaos Will Bring Opportunities & Renaissance!
Phinance Technologies - Current Outline as of July 2023


Good afternoon, everybody. Hopefully you don’t fall asleep. I want to thank my two friends from Oahu, who gave me this lay today. I’m from Maui. So I just want to give a shout-out to them.

Today we’re going to talk not so much about the vaccines, although I do talk about them a little bit in my analysis of what’s to come, but today, we’re going to talk about the signposts of the sovereign debt bubble popping. What comes next?

Before I do, I want to give a shout-out to some of the contributors to this presentation, some of the data that I use. I use my own opinion. I also use Tim Wood’s, you can find him there. He’s a great cycles analyst. I’m a big believer in cycles, and that things repeat themselves: long cycles, short cycles, medium term cycles. And we’re at the end of one of the Mother of all cycles.

Also want to give a shout-out to Carlos Alegria and Yuri Nunez. They’re my two partners at Phinance Technologies. Carlos is a PhD in physics and finance; he wrote a book, Economic Cycles, Debt and Demographics. We’ve formed a firm. A lot of our research we’ve done in Humanity Projects, pro bono, and next we’re going to try to launch a hedge fund. But that’s for later.

But I just want to give you guys an idea what I’m going to talk about; we have an agenda today. So here’s the agenda. To understand what’s about to happen, you need to understand what’s happened historically. What has happened is, I’m going to talk about M2, long commodity cycles, how they relate to the economic cycle, financial panics and bubbles since the 1800s. Also, we’ll talk about the Federal Reserve and other things.

Second item on the agenda today is evidence that something different is happening, current monetary system anomalies. And I’m going to point to three or four things that are popping up that we haven’t seen before, that might be a signpost, that we’re closer to the end, than we think. So we’re starting big picture, history, some anomalies.

Then we’re going to drill down into what we see coming in the next six to twelve to twenty-four months. Where are we in the current economic cycle, the economy, labor force, and financial assets?

Then fourth, what comes next out of this, this next downturn? I’m thinking CBDC, and more kinetic wars likely, and I’ll talk about why I think war is very likely. Kinetic wars specifically.

Then fifth, I talk about opportunities. There’s always opportunities in chaos. I truly believe that out of this, these tribulations that are coming, that we’re already in as a matter of fact, they’re not coming, they’re here: a great renaissance is coming, and I’ll talk about that.

So let’s begin with what happened historically. This is obviously just a picture of a stock exchange. I don’t think they’re panicking yet, but it’s from the 20s, I think.

Crisis & Panics: James Fraser 1965

Alright, so before I go into the history, a lot of this history that I talk about comes from a book, Crises & Panics, James Fraser, 1965. It was reprinted in ’93. You can’t find it today. You can’t buy it anywhere. So this book, I got from Tim Wood, and took some of the history in these different panics I’m going to talk about.

M2, Year over Year Growth went Negative End of 2022: Fifth Time since 1868

All right. I’m going to talk about something that I’m going to put a pin in because we’re going to keep referring back to this. We start with this and we end with this. Money supply, M2, year-over-year growth went negative end of 2022. It’s the fifth time since 1868. Okay. What does that mean? It hasn’t happened since 1930, and when it does happen, it’s usually associated with bad things.

In 1876, it started in 1873 and was preceded by currency inflation after the Civil War, and railroad speculation and bank failures followed. 1893, rampant speculation preceded period then a fear of paper currency and bank failures ensued. You get the theme here, bank failures. 1921, overextension of credit to newly emerging consumer following First World War inflation. The Fed had been created in 1913, so they eased the crisis having been formed then.

Then 1930, this is what the author said. This sounds eerie to me, and that’s why I didn’t go into 1930 other than this first sentence: “I need not go into our last most severe crisis as much has been written about it. Basically 1929 was an inflated credit bubble with no way out ... within the political framework of its day.” So that’s maybe, a blast from the past predicting the future. I don’t know. But it seemed eerie to me. So I put it in there. So you can see this is a rare event, very rare.

I want to delve into this M2 situation a little further and show you where it usually occurs in the cycles. Again, put a pin in 2022, for now. We’ll come back to it.

Inflate or Die: The Grand Commodity Cycle 1800-2023

The history of banking, fractional reserve banking system, which is debt-based monetary money creation, requires credit creation to grow money supply. Keep that in mind. Money that we print is not just printed, it’s printed with an associated debt with it. So it’s debt, the debt based fiat system, and it needs constant flow. A lot of people get hung up on money supply. It’s not the supply, it’s the flow [that] needs constant growth. Much like if any of you read Frank Herbert’s Dune trilogy, the spice must flow. If the spice doesn’t flow from the planet of Dune, the intergalactic Empire Falls. It’s the same thing here. Every time the spice doesn’t flow bad things happen.

Look at this chart, you see the two red arrows on the left. This is a chart of commodity prices, long term commodity prices going back to the 1800s. We’re reflecting the economic cycle according to the real things, not the financial assets, real economic cycles based on stuff. The two red arrows are before we had any M2 data, and those happen to be associated with panics, those two red arrows indicated panics and then deflationary forces, probably bank—I believe there were bank failures and farm deflation back then that caused commodities to deflate as well.

There’s basically six grand economic cycles since the 1800s, that Tim Wood, my friend, has identified, and we measure a cycle from low to next major low. And the cycles average about 40 years. These are long cycles, very long cycles. The the second cycle peaked after Civil War inflation. I also want to—when I talk about these cycles, you’ll see that war comes up a lot. So keep this in mind. We had an inflationary period into a high after the Civil War. M2 went negative several years later, decades later, in 1873 and 1893. So there were two panics back then, and bank failures ensued. The thing I want you to understand is, when M2 goes negative, it usually goes negative on the backside of these deflationary cycles once the commodity cycle has peaked. So we’ll talk about that at the end and try to figure out where we are.

The third cycle saw the Fed established in 1913. You can see in the second, the second peak, that big rapid spike, the Fed was formed right there in 1913. And you saw that big spike, we had World War One, and the Fed was obviously starting to do what they do: create money. That inflation was then followed by the 1920 panic. M2 went negative then and then in 1929 we had the panic M2 went negative in 1930. The thing to understand about these events of M2 going negative, the panic is usually preceded by a crisis. So ’29 was the stock market crash, M2 didn’t go negative until 1930.

It’s different every cycle. But M2 just went negative and I would say we already are in crisis, and M2 going negative just is a bad omen for other bad things to come and I’ll talk a little bit about that.

Then the fourth cycle, we saw re-inflation again. We had a war. Coming out of the Great Depression, we had a war and that inflated commodities yet again. And World War Two happened. And then after World War Two, the US became the world reserve currency in 1944. That’s when we began dollar dominance.

Then, in 1971, Nixon floated the petro dollar kicking off the fifth cycle, which peaked in 1995. So commodities peaked in ’95, bottomed in 2002. And again, we’re not measuring stock markets, we’re measuring real economic cycles via the commodity cycle. So after that cycle peaked, after the Dot Com bust and 9/11, the Fed went on a crazy inflationary, mad scheme again. And then we had the great financial crisis. And by the way, M2 didn’t go negative during the great financial crisis, because of unprecedented action that the Fed took.

A lot of people don’t understand this, but the Fed has been doing really abnormal things. Anyone who’s been around in the markets before 2009 can remember. It’s become normalized now. It’s normalized for interventions to occur that are unprecedented. So we’ve had 14 years of that. And we believe the sixth cycle—we’re either in the sixth cycle that’s already peaked. Or we’re at the beginning of a seven cycle if they can save it again, and I’ll talk about that.

The sixth cycle tried peaking in 2011, with the Euro debt crisis. But they were able to, after many, many intervention, save it. Then it looked like it was starting to roll again in 2019. And COVID was a stick save for commodities in 2019. And it was an inflationary war. It’s a war. COVID was a war. And again, it inflated the system with all the money they used as an excuse to pour into the system.

So that’s the backdrop: big, long economic cycles. Where are we? By the way, every cycle, I said, is 40 years. We’re 21 years into this current cycle. So if it’s going to peak, it’s about time. It’s on the timing band of peaking. So we’re either going to rollover from here or there’ll be another stick save. Something else that comes along. Again, we have to see what the response of the monetary authorities will be, as we go into our problems this year and next.

Bubble Blowing & Crises are Accelerating in Time & Magnitude...Leading to Ever Increasing Fed Interventions

I also want to talk about why I think we’re getting closer to the end. Something I call the event horizon, where the interventions don’t have the desired effect anymore, and things just continue to collapse.

So there’s a pattern here. This chart is the Dow Jones Industrial 30. It’s not logarithmic, it’s arithmetic, so it looks more dramatic than it is. But it’s still dramatic nonetheless. You can see since the creation of the Fed, we’ve been blowing bubbles, and booms and busts ever since and crises. So blowing bubbles, crises, they’re both accelerating in time and magnitude, leading to an ever-increasing Fed intervention scheme.

Let me go through the math real quick. Dot Com bubble started after ’87 until 2000. That’s 13 years. Real Estate bubble started after 2001. It lasted seven years, peaked in ’07. Then QE [quantitative easing] was born. And that began the massive, unprecedented interventions we’ve seen from all central banks and coordination amongst the central banks. We had the Euro debt crisis in 2011, two years after the great financial crisis. Solved with the central bank coordination and negative interest rates in Europe. Then in 2015, we had China currency issues. Many of you may not realize what was going on then because they didn’t really want to make a big deal out of it. But that was four years later, we had something called The Secret Shanghai accord. That was where we talked to China and Europe and Japan. And they coordinated monetary policy, especially before the election. It was 2016 right before Hillary and Trump were going to face off and they wanted to keep the global economies afloat, but it almost unraveled then. But they saved it again. Then the Fed attempted to raise rates in 2016 through 2018; abandoned that in the fall of 2018, when bond market liquidity fears came around. there was just no liquidity. So they had to start cutting rates again.

So you see the point here: they’re trapped as time goes on. And they began what was called Not QE, and that lasted three years. Then 2020, the COVID War was launched. I call it a war because it was the same effect as going to war. It inflated the global economies. It allowed them to print unprecedented amounts of money, raise huge deficits, and constrict supply chains, what have you. I think that that attempt to inflate the global economy has failed and we’re in the process of rolling over.

So the question we have is: 2022, top of the everything bubble? And we’ll talk about the Silicon Valley Bank failure and the bank term funding program. But it feels to me, and as we go through this presentation, hopefully you’ll become aware that it feels like we’re closer to something happening and what that is, we don’t know, but it’s not necessarily good.

Evidence of Anomalies in Global Monetary System

All right, so I’m going to go through some evidence of anomalies in the global monetary system.

1st Anomaly: Dollar & Commodity Inverse Relationship flips from -1 to +1

Dollar and commodities usually have a relationship of being inversely related to each other: Minus One. Us geeks talk about Minus One Correlation. So when the dollar goes up, commodities go down. That has been the relationship as you can see from the chart: the green is the dollar going up, commodities going down; commodities going up, dollar going down. This last iteration, they both went up at the same time. We flipped from minus one to plus one. Never seen that before. And by the way, this rate hike cycle and this commodity rise, were the fastest rate-of-change of events we’ve ever seen in the commodity index. You can see the slope of that is immense. And what you need to know about the slope and the rate-of-change: rate-of-change, speed kills things. I think it’s killing the financial system right now. This happened so fast and just caught a lot of people off sides, a lot of institutions, and they’re scrambling to figure it out right now.

Since the inception of the petro dollar in 1971, the strength or weakness of the dollar was inversely correlated. And that’s all flipped since January of 2021. The question we need to ask is: Why did this occur? Was it because of the money printing? Sure. That would suggest that’s why commodities are going up. But when you’re raising rates, the dollar started to go up, and commodities went up at the same time.

Were there supply chain disruptions and constructive energy policy? Yes. As soon as Biden came in, he implemented some executive orders to shut down the Keystone Pipeline, shut down shale production. Europe started doing the same thing. There seemed to be a coordinated effort to shut down energy production. The Ukraine war came along at just the right time to shut down all sorts of pipelines and things there.

So policy has conspired to cause commodities to go up at the same time the dollar has. And the dollar going up might be an indication of slowing global credit growth because the dollar is now in every corner of the world and there’s $15 trillion of global dollar denominated debt that resides outside of the US.

So, there’s something going on, that’s different. And what I think’s going on is, the dollar and inflation are causing such a slowdown. The Fed probably should never have started their rate hike cycle, but they did anyways. I think, as we go through, when I talk about, you’ll see that things are coming or grinding to a halt economically.

2nd Anomaly: A Signal Trigger for Rate Hike Cycle End Fired Off Before First Rate Hike

This is from Tim Woods’s work, Cycle News & Views. He has a signal trigger for rate hike cycle ends, and it fired off before the first rate hike. Meaning when this trigger happens, the 3-Month T-Bill goes through the discount rate that usually caps a rate hike cycle, It went through the discount rate before the rate hike cycle ever began. So, there’s a couple of questions that—and it did so in ’69, ’74, ’80-’81, ’84, and ’89, and every time it did, the Fed would start cutting shortly thereafter—Why? Why is this occurring? Maybe, I think, my personal belief, is the Fed’s hiking into a recession, and they didn’t listen to the Money Markets, they did it anyways. The trigger—maybe this trigger is irrelevant and doesn’t matter anymore, or something else. So there’s there’s a lot of questions here about why this has occurred. And you can see from this chart here, it poked through, the 3-Month T-Bill in black, poked through red many times. So it fired off all the way up.

3rd Anomaly: Fed Reverse REPOs Explode in the Spring of 2021 ... Fed Influence Grows

This one is a little complicated. I’ll try to say it in in words that even I can understand because this is a complicated subject: Fed Reverse REPOs Explode in the Spring of 2021 ... Fed Influence Grows. Look at this chart: repos, if—okay, let me try to describe what a repo is. A repo is overnight Money Market operations that the Fed engages in, and banks engage in with each other to provide overnight liquidity, and there’s an interest rate charge for it and you get—they give you money, you give collateral, it’s just a simple Money Market transaction. Reverse repo means that when you do it with the Fed, means you give them money, and they give you collateral and then you earn interest on the money you loaned the Fed overnight. And there’s a rate determined by that. So the Fed is loaning—the Fed is giving assets in lieu of cash.

So what it effectively does is it takes money out of the system and raises interest rates. It reduces supply of money. This facility exploded in April 2021 due to the restoration of the some supplemental leverage ratio of banks from post covid relax requirements. So in 2020, the Fed, in the crisis of 2020, relaxed because there was a bond market crisis in March of 2020 in the Treasury market, the Fed relaxed, the supplemental leverage ratio so banks balance sheets could grow, so they could buy more treasuries. And they could also get more deposits from clients.

Then, in March of 2021, they put back the Basel III leverage ratio requirements, so effectively forcing banks to shrink their balance sheets. So they no longer had the same appetite for treasuries and or deposits, so they started to basically turn deposits away. At the same time, it became obvious that the Fed was going to undergo a rate hiking cycle. And there was also a lack of T-Bills supply.

What ended up happening was, people started taking deposits from banks, and giving them to Money Market funds because you could get a return there. And so the bank’s balance sheets were shrinking at the same time that Money Markets were picking up share. So this facility, which had never gotten above $400 million in times of emergency, stands at $2.5 trillion now. And it seems to be a permanent ongoing operation. So effectively, what’s go—and by the way, Money Market funds can tap this window with the Fed.

So basically, the Fed is now the biggest player in the Money Market funds and distorting prices there. It’s become a problem. If you’re a Money Market fund, why would you go anywhere else? Why would you give money to any private entity, when you can go to the Federal Reserve, get 5% on your money overnight with no counter party risk? So the Federal Reserve, whether they know it or not, is crowding out private investment in the Money Market part of our system. Which is very important: a lot of people get short term financing, a lot of people issue commercial paper, what have you. And then this ripples up to the longer—other parts of the chain.

So the Fed has literally, basically taken over the Money Market industry, de facto, right now. And they’ve said, and they promise, ‘Oh, this facility will wind down as we raise interest rates.’ It hasn’t. It’s become a permanent fixture.

So the Fed—think about this: Money Market assets grew from $3 trillion in 2019 to $5 trillion today. And if they’re running a $2-and-a-half trillion repo program—not every part of that $2-and-a-half trillion is Money Market funds, there are banks that use it too—but you can see, the Fed is sopping up a bunch of private money that can be used for private economic lending transactions that can go to you and me. So the Fed is crowding out investment in my humble opinion.

4th Anomaly: M2 Growth Goes Negative Y/Y...First Time Since 1930 & 3 Large Bank Failures Seemingly Out of Nowhere

Now let’s talk about the fourth anomaly, which I’ve already talked about. M2 growth goes negative, first time since 1930. And we have some large bank failures seemingly out of nowhere: Silicon Valley Bank, Signature Bank, and Credit Suisse. Now, I’ve been in the financial markets a long time. Bear Stearns was rumored to go bankrupt for months and months on end. We were whispering about it on Wall Street. This came out of nowhere. This was like, I mean, I think on a Wednesday, the rumors began and they were taken over by the Fed on a Friday.

So something’s going on. And I think this also has something to do with the Money Markets. The pricing signals have been distorted. So it’s harder to figure out when someone’s in distress if you’re crowding out private market signals. That to me is very worrisome. This came out of nowhere. Then the Fed immediately did what’s called Bank Term Funding Program. And everyone’s confused. Everyone thinks that’s quantitative easing. It’s not. It’s basically loans to banks at par. It’s a short term fix. It’s only going to slow down some of these bank failures that are coming. It’s not going to stop them. And it’s not liquidity that’s getting into the economy. It’s just a loan. So it’s not something that a bank can then create money off of. That’s not going to happen, so it’s not QE.

So the question—this M2 has me seriously worried, this negative year over year growth rate going negative, again, we haven’t seen since 1930. And let me go back real quickly and talk about this. I think I know why.

Inflate or Die: The Grand Commodity Cycle 1800-2023

The Fed was formed in 1913. But we didn’t get world reserve currency status until 1944. So really, we haven’t had—we’ve seen nothing but unprecedented growth in the US dollar-based Fiat System to all corners of the globe. So this extended the cycle for the US because we’re using other nations to export our inflation, and we’ve been doing it for decades and decades. And then Bretton Woods extended that even further.

So that’s why we’ve not seen M2 go negative at any of these other cycles, because we became the world reserve currency of the world. And that’s 78 years ago. It’s an 80 year cycle. And we’re at the top of potentially, a grand commodity cycle. Again, I told you that you need the spice to continually flow, the money must flow and M2 going negative after 78 years of it not, is quite worrisome to me. It seems to me the spice has stopped flowing.

Where Are We in The Current Cycle?
Economy, Labor Force and Financial Assets

All right, where are we? We’re going to drill down into the next six to twelve months. Where are we in the current cycle, the economy, labor force and financial assets?

We Are Expecting a Deep Recession in 2023
According to Our Early Cycle Indicators (ECIs)

I’m using Carlos Alegria’s work from his Early Cycle Indicators [ECI], his economic prediction models. We are expecting a deep recession in 2023. If you look over on the right, that’s our ECI composite nine month. You can see it’s spiking way down. Again, these are Early Cycle Indicators that predict the future. We went to a new low in April from March. And if you look at that line—the deepness of it—we don’t know how deep it’s going to go—but as of today, it’s going to be as deep as the 1990-91 SNL crisis. And that’s assuming no systemic accident.

If there’s a systemic accident, then you bar the door. That means not multiple bank failures, currency problems somewhere in a global sovereign debt crisis, somewhere something super awful happens that creates a contagion across the globe. We’re not predicting that. We’re not predicting that. But that if that happens, it’s anybody’s guess what goes on then. So we don’t know the full extent of the recession. But a systemic crisis would tip us into a depression.

Flavors of Recession Phinance Technologies Is Expecting

So let’s let’s go into some of the flavors of the recession that Phinance Technologies is expecting.

Vaccine Damage Project: Human Cost
Vaccine Damage Project: Economic Cost
Total "economic cost" for 2022: $147.8 Bn
The figure below summarises our findings.
Phinance Technologies Resources by Carlos Alegria:
BOOK - Cycles, Debt and Demographics, 2nd Edition, 11 Sep 2021 (301 pp.)
    Posts on linkedin (originals referenced via "li")
  1. Red Card of Macroeconomic Risks 2022-03-10, (4 pp.) li
    On Inflation:
  2. The Genie is out of the bottle. 2022-05-18, (2 pp.) li
  3. The Consensus view. 2022-05-28, (2 pp.) li
  4. Why inflation is a monetary phenomenon. 2022-06-12, (4 pp.) li
  5. The coming recession and the real economy pain index. 2022-08-06, (4 pp.) li
  1. China and the danger of a second Asian crisis. 2022-08-26, (5 pp.) li
  2. Magnitude of coming US recession. Nov ECI report., 2022-11-12, (1 pp.) li
    November 2, 2022 Early Cycles Indicators Report (21 pp.)
  3. Incoming US Recession, December ECI update 2022-12-05, (1 pp.) li
  4. The Flavour of the incoming US Recession, ECI upd 2023-04-01, (5 pp.) li
  5. inflation Roller Coaster: Why deflation is coming next. 2023-05-30, (5 pp.) li

Budget Deficit Is Exploding Into a Recession

I also want to talk about the budget deficit. This is a disaster and also does not bode well for risk assets, stocks, equities, bonds. In the first six months of fiscal year—they run October to October—the first six months as of March, we’re about $480 billion above last year’s spending this time last year. You can see from the red bar there. It’s insane. Revenues fell by 3%. We’re looking at a structural deficit of $2 trillion with tax receipts expected to plummet south in the fall into the recession.

Senator Ron Johnson asked Janet Yellen, a couple of weeks ago, at the testimony on the budget, he asked her, What are your expected deficits for the next 10 years? She didn’t know. She had to look it up. This is what the meeting was about. This is what the meeting was about. She said $17 trillion. Well after this number came out, and the structural deficits too, we’re looking at $20 trillion over 10 years instead of $17. So that went up by $3 trillion in a matter of weeks. The woman didn’t even know this number off the top of her head.

I’ve talked to a lot of people. So given what the Fed is doing, quantitative tightening, meaning they’re selling assets, given that the Fed is continuing to raise interest rates, How are we going to fund this massive amount of supply coming into the market? I’ll tell you how we’re going to do it, you’re going to do it. You’re going to sell your equities and your bonds, because you’re going to go lower in price, because there’s something called the crowding out effect. Massive Treasury issuance in the fall is going to be hitting as we go into economic recession. So why not get ahead of what the government wants you to do? Go buy T-Bills now and just keep rolling them at Treasury Direct and avoid losses and other parts of your portfolio. That’s what I’ve been recommending for a while.

Now, if the Fed doesn’t turn tail soon, there’s no way we can fund this. But I guarantee you, they are going to turn tail and this is going to be funded with massive QE, and Treasury yield curve control. Which is what Japan did, finally, in their deflationary era. So we’re going to—I’m predicting massive QE announced at some point into the teeth of this financial crisis, economic crisis, and then they’ll announce yield curve control because it’s the only way the government can fund this. And the government is going to care about themselves, not your investments or your stocks. So trust me, they’re going to figure out a way to get the money.

Stocks Peaked in January 2022, Commodities Peaked in June 2022...Interest Rates peaking?...Fed Policy Error Likely

All right. Where are we in terms of financial assets? Stocks peaked in January of 2022. Commodities peaked in June of 2022. Tim Wood has shown that going into recessions, there’s something called the Checkmate Charts. It’s when three asset classes line up to the downside in gear, and we saw stocks peak and commodities peak last year. Interest rates seem pretty close to peaking soon. Even though the Fed’s hiking, Fed Funds Futures are predicting four rate cuts by the end of the year. So the bond markets disagreeing, the yield curve is disagreeing. It’s deeply inverted, deeply inverted. And the chart to the right shows something that Tim has been tracking for a long time: that rate hike cycle is likely done. It’s a histogram and a chart of the spread between the 5-Year and the 3-Month T-Bill. When it goes below zero, that’s a warning shot. When it goes below minus 50 basis points, it’s a big-time warning shot and it’s shot through.

So we think the Fed policy is too tight. Inflation is already coming down. You’ll soon be hearing on the lips of the media, the word deflation. And that’s really what we’re in. We’re on the backside, I believe, of a long economic cycle. COVID was an attempt to save the system from collapsing in 2019. And we’re so far down this road of being at the end that we only got two years of economic growth before we started rolling.

What Comes Next?

So something’s coming. There’s a lot of chatter about what’s coming. And let’s talk next about what’s coming. I think it’s the CBDC, and war.

CBDC Is Likely Attempted

Let’s first talk about the CBDC. The current dollar’s just—I’ve shown you four anomalies. I’ve showed you where we’re in the economic cycle, I’d showed you we already have bank failures, M2’s gone negative. So something is going on.

You’re not going to hear this from the mainstream media. You’re not going to hear this from a lot of people. But I think, my team and Tim Wood and I put the pieces of the puzzle together; something wicked this way comes. And again, I personally believe it’s beyond everyone’s control, even the Fed’s. But hopefully, I hope they can slow it down. Because that’s what they’re going to try to do with their interventions. They’re going to play Whack-A-Mole and the first Whack-A-Mole with SVB was this Bank Term Funding Program.

So ideally, I want them to slow this down, because fast isn’t good for any of us. That’s when chaos and havoc are created. But my belief is the current dollar system is in flux. And we’ve seen CBDC trial balloons that are in motion. Examples are Biden’s executive orders, and the Fed Now program. We’ve also seen a crackdown on crypto by the establishment.

So you’re seeing all these pieces on the chessboard moving together. The logic is that as governments become starved for revenues, to service the debt that is overburdensome at the moment, it is a technocrats ideal control dream to collect taxes and implement societal control. Think individual climate enforcement and taxation combined, for instance.

With this Central Bank Digital Currency, they’ll be able to control every one of your transactions and direct what those transactions are for. They can even force you to spend money saying they’ll disappear money from your bank account, if you don’t spend it—to inflate, if they wanted to inflate. Because bankers don’t like deflation. That’s why it’s inflate or die. Bankers want inflation. Deflation is their death. Always remember that.

Institutional momentum is building. But the good news is, the politicians are injecting concerns into the debate. So we got Ted Cruz squawking about this. We got Governor DeSantis and RFK, Jr. just started talking about it, too. They’re all warning. And I think this is one of the serious things we need to stop. I personally am using cash for every transaction. I just use cash everywhere. I just and you know, it’s funny, my friends are starting to follow me. They’re like, Yeah, let’s use cash. So they think it’s great.

Now, if you think that this is all conspiracy theory, I’m going to play a tape for you of a little 30-minute video of some gentleman from the Bank of International Settlements. And this is what he had to say about the central This is a year and a half ago. So believe them when they say what they mean.

“On our analysis on CBDC in particular for the use of general—to the general use, we tend to establish the equivalence with cash. And there is a huge difference there. For example in cash, we don't know for example who is using a $100 bill today. We don't know who is using a 1,000 peso bill today. A key difference with the CBDC is that central bank will have absolute control on the rules and regulations that will determine the use of that expression of central bank viability. And also we will have the technology to enforce that. Those two issues are extremely important and that makes a huge difference with respect to what cash is.”
Cross-Border Payment–A Vision for the Future
Agustín Carstens | Bank of International Settlements General Manager | 19 Oct 2020
[Posted on the Pandemic Parallax View Channel, 5 July 2021.]

Alright, so believe them when they tell you. It’s about control. And absolute total control. I mean, this is such if I was an evil Bond character, this is what I would do.

More Kinetic Wars Very Likely

Alright, more kinetic wars, very likely. I showed you in the long term economic cycles you noticed, periods of inflation usually corresponded with war: Civil War, World War One, Fed created, World War Two took us out of the Great Depression. And we’ve had a series of mini wars that have been inflationary, like the Vietnam War. What took us out of the 2001-2002 recession? Oh, 911, going on the war on terror and going to start 20 year wars in Iraq and Afghanistan. And we just had the COVID War.

So war. War is a way out for bankers. Not for us, but for bankers. So there’s $330 trillion in global debt. It’s coming to a head. And as I said, we are 21 years into the sixth economic cycle. Were they able to save it? In my opinion, no. I think we’re going to be going down for 21 years. Either slowly or super fast—doesn’t matter, the cycle will complete as tracked by commodities. So the deflation is coming, in my humble opinion.

The only two ways out of this problem if you’re a banker: default or inflate. They’re not going to default. So war is the only palpable narrative that populations will accept to inflate, with proper propaganda. That’s the only narrative that people will buy. You can’t say we’re going to do this to save the rich. That won’t work.

So this has been the tried-and-true inflationary tactic. Now, I’m not worried about us, just yet. I’m worried about China. China hit a demographic wall in 2020, and they are in a dire domestic debt situation. They are a disaster right now. If you saw the COVID zero policies, it was not about COVID. That was about tamping down food riots, bank runs, insurrections. It had nothing to do with COVID. Maybe there’s a little COVID for theater sake. But that’s why they—mysteriously COVID miraculously appeared as their demographic cycle was ending, and they were rolling.

They are in deep, dire economic situations. They have so much domestic internal debt, it boggles the mind. Because you have to remember, after the great financial crisis, they built cities to nowhere, infrastructure projects to nowhere. It worked for a while, while their population was slowing down, but still growing. They’ve hit their demographic cliff and it’s over and they’re not going to see double digit GDP growth ever again. They’re looking at two to three percent, which is for that population, a death knell for the ruling class.

So if you’re the ruling class, you need to you need to create a boogeyman. And if you look over to the right there, Warren Buffett seems to think that this isn’t conspiracy theory, this China war thing. He sold $4 billion of Taiwan Semiconductor just recently and he said, war was a consideration. So if the oracle, Warren Buffett, has told you war is coming, I’m telling you war is coming, believe it. It’s not conspiracy theory. This is what’s going to happen, unfortunately, unless we can figure out a political solution in this country, which, at the moment, I’m a little cautious. But we’ll see what happens.

In my humble opinion, the COVID War attempt to inflate failed, and the new wars over the next five to ten years will be over the new monetary system. The US will eventually go to war to protect the world reserve currency status. Because I will tell you this: there’s no way we’re going to go gently into the night and give up this status. Because if we do, the lifestyle you all are used to [will] evaporate overnight. Okay? So this system won’t go gently.

And this—I just—I’m an analyst, and there’s a lot of people who want to bash the dollar. And yeah, we’re going to have to figure out a new system. But when people say the dollar is going to implode because of what’s going on with Saudi Arabia, China and Russia, it’s not going to happen fast. The dollar, the way the debt system works, less dollars is deflationary, and so the dollar will fail up eventually. I’m not saying it’s going to happen all at once. But that’s my belief. And the dollar right now is currently 80% of all foreign currency transactions daily. Through seven-and-a-half trillion in foreign currency transactions a day, the dollar is the other side—actually 90% of them. 90% of all other sides of the transaction are the dollar.

What has me concerned is all this talking by France and Saudi Arabia—it’s talk at this point. And it becomes a concern unless we get some political leaders in office who can reassure our allies and not use the dollar as a weapon. It seems to me that the current administration wants to weaponize the dollar. And they did it against Russia that scared a lot of people when they threatened to take them off the SWIFT system.

So there’s a lot of concern from our partners in trade that we’ve lost our way. De-dollarization is going to happen slowly because the system is locked in. But it’s—I don’t want to see it gain momentum. We need to change—have somebody with some sort of leadership that can assure our partners that we don’t intend to weaponize the dollar.


All right, opportunities. I know it’s grim. But it is what it is. I’m in acceptance of it. And when you don’t have fear, you can see opportunity. This has been a principle of mine for the last five or six years. When you become comfortable with uncertainty, infinite possibilities open up in your life. I truly believe that. I’ve become very uncomfortable with uncertainty in all aspects of my life. [Phone rings]—I’m almost done. I personally—this is something that I think about a lot because I used to be—when I—many of you know, I’ve told the story, I suffered from depression. My depression was a direct result of always worrying about stuff and wanting things to be the way I wanted them to be. Once I gave up control and understood that I control mostly nothing, life has been a lot better.

Before Opportunities Get Your Mindset in Order!

All right, this is again: before opportunities, get your mindset in order. Because if you are living in fear and you’re ruminating, it’s not good. So physical health precedes mental health. Examine your diet, exercise, stop taking COVID vaccines, if you haven’t already, and look into detox protocols, if you have. Lots of help coming on the way.

If you have a normalcy bias, lose it. We are not in Kansas anymore. It’s over. So if you want to go back to what it was like, No. It’s actually, once you get there, it’s actually much easier to deal with what’s going on. Because then you can work to change it, rather than sitting back being sad about what used to be. It’s over. It’s not coming back. Now we have to prepare the new.

Prepare for contingencies that may not happen, but will put your mind at ease, like prepping for food shortages, etc. I’m the worst. I’ve been telling people to prep for huge food shortages. I don’t have any stored food. I guess that’s because I just don’t worry. I’m like, Well, I got my friend over here with the farm. He told me he’s got pigs and then. So, I guess I haven’t listened to my own advice. But I don’t worry about it. But if it puts your mind at ease, do it. Because I don’t know what’s happening with the electric grid. I don’t know what’s going on with lots of things. If there is a war, a kinetic war, that happens sooner than we think, it’d be nice to have some food.

Live in the present moment, as much as possible as this will reduce anxiety and depression. I used to be one of these people that was constantly future f---ing myself, thinking about things way out there and ruminating in the past. And I did this and did this and did this until I became depressed. I had to understand what fear really is. Fear is mostly imaginary. Unless a fear is in the present moment and an immediate threat. It is not real. It’s not real. Avoid this ruminative thinking at all costs.

Look, is there bad stuff coming? Sure. Do I think about it, put it in a presentation and talk to you about it? Sure. Do I literally sit around worrying about it? No, because today’s fine. I’m in a hotel, I’m with friends. Live in the present moment, as much as you can. Because life is great. And if you sit around worrying about it, it will disappear. And I used to do that. I’m never going to do that again.

Here’s the most important thing to remember: You can’t control most things in life, but only how you react to them. I’ve worked on that a lot in my life, I suggest you guys do the same. Most of it you can’t control, only how you react. Control what you can but let the rest go. I’m trying to make change. I’m trying to make a difference, trying to stop the vaccines. But the outcome, I give up to God and I don’t worry about it. If I fail at least I tried. That’s the best I can do.

Avoid fear and embrace uncertainty. I love that. That’s my mantra: Avoid fear, embrace uncertainty. Because that’s where we’re going.

Chaos Will Bring Opportunities & Renaissance!

All right. Chaos will bring opportunities and Renaissance. I truly believe that. The biggest trend emerging, I believe, it’s a new trend, Truth and Integrity. I’m not joking. The folks exhibiting it today will be the future leaders of tomorrow as the current system of leaders propping it up are exposed. It’s a tiny trend now, but will grow. The system has been lying to us for a long time. But the lies are starting to emerge. And there are so many people that are bending the truth that they’re at gaslighting levels at this point. A lot of folks now have the temerity to stand up and speak the truth.

One of those people, I think, is RFK Jr. He’s a truth teller. I’ve met him. I’ve become friends with him. He wrote my forward and I’m proud to say I’m also the Treasurer, in his election committee campaign. So that’s good to know.

Integrity is telling myself the truth and honesty is telling the truth to other people. That’s one of the things you can read over there. I respect those who tell the truth no matter how hard it is. Integrity is everything. And this is most important thing I think: Integrity is choosing your thoughts and actions based on values rather than personal gain. One thing I know about Bobby is he does base his—integrity is very important to him, and he has values. He also says You may not agree with every one on my values, but I’m willing to listen to you and talk about it. He says—the reason I decided to join his campaign, not only because of the vaccine issue, but because he said freedom first and then everything else. We can get back to the good old fashioned debates of old but without freedom, we got nothing.

Here’s another opportunity. Asset prices are going to be on sale soon. Hoard cash like a professional and Warren Buffett’s up to his eyeballs in cash. He just sold all those Taiwan Semiconductor stock. He thinks war is coming. Be like Warren Buffett. Go to cash, buy treasury bills, roll them. Don’t worry about, ‘You’re out of stocks, inflation is eroding my’—look, if stocks go down 50%, you’d be happy that you’re in T-Bills.

In the panic, which I think is coming, wait until the panic and just start, dollar averaging cost. We think a bottom’s coming third or fourth quarter, at least in the near term. There might be other bottoms along the way. But that’s where we think it might get interesting.

Decentralization is an emerging trend. Create new businesses as trust in current institutions erode. For example, new healthcare modalities, crypto payment systems, community banks, credit unions, whatever you can think of. I think a new trend is decentralization. Globalization is done. I know we’re fighting it, but it’s over. It’s over.

We just poisoned 5 billion people on the planet. We’re in the process of alerting those people and I think the trend is accelerating. I think we’re getting closer and closer to an event horizon on the vaccine awareness issue. And people are going to be very angry and lots of changes coming. I believe that. Align yourself, most importantly, with like-minded positive people and create those networks now.

Some of your friends who don’t think you know what you’re talking about, or think you’re crazy, are still living in this old matrix paradigm, normalcy bias. You’re going to have to let them go at some point. You’re going to have to find new people. I’ve let a lot of friends go. I just don’t have time—I don’t have time for people that don’t see reality anymore. If you’re not living in reality, we’re going to have to leave you behind. And there’s a reality of the world that I know it’s hard to see. But you’ve got to see it, and you have got to deal with it. Because you can no longer be willfully ignorant of what’s going on. And a lot of people still are because they’d rather not know.

So again, I know, I’m not bringing joy, but it is what it is. And again, look, I hope I’m wrong. I hope the Fed can navigate this. And we get two, five more years of kind of muddling along. But I think we’re closer to the end of something happening. And maybe, maybe they do stick save it again. I mean, everything is open for debate. But I’m of the belief that change is coming. It’s coming fast and none of us really knows what it looks like. I’ve taken a stab at trying to tell you what I think it’ll look like but that’s my best guess. And so thank you so much for your time.

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