We Are Headed into The Final Collapse Ludwig Von Mises Warned Us Would Take Place
The comments below are an edited and abridged synopsis of an article by Egon von Greyerz
Fool’s gold come in many guises (paper money, Bitcoin, etc.). As we know from history, paper money doesn’t just cause an inconvenience, but leads to a collapse of the monetary system and of the economy involved.
The combination of weak world leaders and fake money is a fitting end to a major economic cycle. It actually couldn’t end in any other way.
But we have not seen the end of the current era, which started with private bankers taking control of the US monetary system via the Fed in 1913. The Fed is now attempting to rein its balance sheet with quantitative tightening, and it has come down $70 billion since March—big deal.
That’s a 0.7% reduction in 3.5 months for a balance sheet that has grown by 240% ($5.3 trillion) since August 2019. In 2006, the Fed balance sheet was $800 billion and today it is $9 trillion, an 11-fold increase.
The world’s banking system problems started with irreparable damage to the financial system that central banks couldn’t conceal beyond August 2019.
The beginning of the end of this 100+ year financial era started in 2006. Since then, the balance sheets of the major central banks have grown exponentially from under $5 trillion to $36 trillion, a 7-fold increase.
But central banks are only part of the problem. The real money printers are the commercial banks. Total global debt has grown from $100 trillion in 2000 to $300 trillion today.
Total global debt including derivatives and unfunded liabilities is over $3 quadrillion. When the financial system crashes, these derivatives will prove worthless as counterparties fail and central banks will print $2—3 quadrillion in a futile attempt to save the system.
Up for discussion: The coming exponential move will be terminal; fool’s gold; El Salvador and fool’s gold; fool’s gold in Uganda; and a major stock market fall is imminent.
