As readers of this blog probably know, I am a firm believer that the global financial system should have collapsed in 2007-9 cycle. The collapse was staved off by the central banks around the world. Egon Von Greyerz has a post at Zero Hedge outlining his similar thoughts.
As outlined in the post,
the West led by a bankrupt USA will try all tricks in the books. That will include CBDCs (Central Bank Digital Currencies), much higher taxes especially for the wealthy, bank bail-ins (forcing depositors to buy 10-30 year government bonds), martial law and many more measures to restrict people’s everyday lives.
What is the end game if the currency collapses as has been the case for all paper currencies throughout history? Your survival may depend on having physical assets and/or ownership of commodities allowing you to trade with others. Trying to time your exit from these inflated values may not be worth the potential wealth destruction that occurs when the collapse happens.
When will the collapse happen? No one knows and perhaps it gets pushed out beyond your expected lifetime. However, don’t allow yourself to believe that the end will happen suddenly due to the exponential compounding of the debt. A great analogy is in the post talking about a football stadium filling with water starting with one drop:
Imagine a football stadium which is filled with water. Every minute one drop is added. The number of drops doubles every minute. Thus it goes from 1 to 2, 4, 8 16 etc. So how long would it take to fill the entire stadium? One day, one month or a year? No it would be a lot quicker and only take 50 minutes! That in itself is hard to understand but even more interestingly, how full is the stadium after 45 minutes? Most people would guess 75-90%. Totally wrong. After 45 minutes the stadium is only 7% full! In the final 5 minutes the stadium goes from 7% full to 100% full.
I agree with Mr. von Greyerz’s view: once you organize your financial affairs, you “must think about the people that need our help in whatever form. Then, enjoy life with family, friends as well as nature, books, music etc which are all free pleasures.”
