Collapse: Part 3

The final stages of economic collapse are based on two things: debt and fiscal mismanagement.  This is true for individuals, corporations, and countries.  Our presumption that we can conquer economic history and defy the laws that have held true in the past is simply arrogance.  Just as in the Book of Judges, the Israelites repeatedly did not learn their lesson, the West is doomed once again to not read and understand history.

The sovereign debt worldwide is of Biblical proportions and there is no way to repay the debt in today’s real monetary value.  Depreciation of fiat currency is the preferred method of response otherwise default on sovereign debt could get ugly much quicker.  The sum of perspectives of all individuals with money on a global basis  will determine when the inflection point occurs.  On a bigger picture, when Our Heavenly Father opens the eyes of the people and they see what is behind the curtain of the Wizard of Oz, they will realize that tangible value is the only store of wealth.  At that point the velocity of fiat money will increase as they try to buy up tangible value with their increasingly worthless dollars or other currencies.  That is why hyperinflation has a much greater probability than deflation.  Deflation occurred during the Great Depression because Roosevelt had a Dollar peg to gold which kept a restriction on the number of dollars in circulation and those dollars had a tangible value relative to the gold backing them.  Those dollars were being hoarded by people in an attempt to retain their wealth.  Other goods and services had less demand than the gold denominated dollars so their prices declined.

There will be a further disintegration in the Rule of Law and extreme taxation that will fuel the economic collapse.  In a sense, the Rule of Law has already been in a slow train wreck with the redefining of Law and the intent of the originators.  Those with ample treasuries are often able to circumvent the law using superior law firms or political influence.  The tampering with the tax code continues to look for ways to extract wealth from the population to fund fiscal mismanagement rather than putting fiscal policies under the magnifying glass.

China controls 97.3% of all rare earth minerals.  These rare earth minerals are required for wind technology, electric car technology, and military applications.  With this control, China offered manufacturing companies a 40% discount for rare earth minerals if they relocated to China.  With continued movement of manufacturing to China, the West continues to lose its manufacturing employment infrastructure, a fundamental support base for monetary value.  A country’s monetary base is really based on it ability to produce tangible output now and in the future.  Movement to a service based economy has created a vulnerability in a volatile world.

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