Understanding why the current economic crisis is not simply due to coronavirus and covid-19

I was talking with a great mate of mine who moved back to Australia. Many of the Aussies head over and eventually get tired of how painful the Pommies are. Still meaning to head over and see him but it seems life and now - eternal lockdown is in the way of it. 

He seems pretty pissed with it and for the Pink Panther (his nickname) to be unhappy, something is wrong. In Queensland they are locking down harder than any. Isn't Australia freedom personified? Doesn't seem to be. When you listen to Victorian Premier Daniel Andrews and what he has mandated in metropolitan Melbourne, sounds like a police state has been enforced. What seems incredible is most people didn't comprehend this guy Daniel Andrews actually had any power before this covid-19 farce. Now people like the Pink Panther are subject to ridiculous draconian nonsense. Australia was perceived to be the Brit's prison camp, I think the Aussies are stewing over their current predicament.

Am sure we have seen recent footage of failed Rugby League wannabes rugby tackling girls for not wearing a mask.

Am not an Australian citizen and without suggesting criminal intent, it seems surprising the Melbourne crew have not got together and taken the guy out. This will be the next phase, people taking the law into their own hands to reclaim their freedom.

Anyway, I started telling my friend that the real reason for the lockdown is simply economic. Now my friend is smart, works on the commercial side and worked in financial technology but he admitted he doesn't have a grounding in finance. The question is, do I think I have a good grounding in finance? Who knows?

Understanding the financial system

It is vital you keep an open mind. You shouldn't be trying to understand nonsense like;

How could they conspire to do such a thing? How could they get all the scientists to agree to trick the population? How could all the politicians be bad? But people are dying, how do you explain that? But Covid case numbers are increasing? 

This is five year old speak and we are very much adults, so do one if you are in the stupid camp.

The two reservoir town as an explanation of the fiat money system

Take a look at this for a simplified explanation on our corrupt monetary system.

Explaining money in simple terms

From here on, let's consider Investment and Retail to be known as banks. Central banks issue debt to investment and retail banks. This allows IB/RB to then issue debt (loans) to creditors. Banks are allowed to lend out more money than they have been given to them by Central Banks in what is known as Fractional Reserve Banking. This is where the term "money is printed out of thin air" comes along.

Whilst this sounds like fraud, the system is pretty decent. One reason it is decent is because banking should apply rigour and standards. A bank printing money handing out loans with impunity should get picked up.

The importance of money internationally

No country can operate effectively without trading with other countries for goods and services. Certain countries specialise in certain activity and have resources which other countries don't. To be able to exchange goods and services with relative confidence, markets need a relative amount of stability. Foreign Exchange (FX) rates can fluctuate significantly, but by using different financial instruments to manage this life can exist relatively normally.

  • Derivatives - Swaps - FX, Interest Rate Swaps, Cross Currency Interest Rate Swaps.
  • Futures.
  • Bonds - Sovereign denominated debt.
  • The Repo market (Repurchase Agreements).

In simple terms - bonds are the manner by which governments indirectly own each other's government debt. This pretty much, seems to keep all Western economies in check. Markets are designed to operate efficiently to provide relative stability.

Or does it?

Explaining fiat money simply therefore

Money is thus;

  • Government issued debt purchased by banks.
  • This Debt acts as a minimum reserve of capital (fractional reserve) allowing banks to offer loans to individuals and companies.
  • This debt is repaid as credit to the bank.
  • The government collects revenues in the form of taxes which allows them to pay interest on the debt (coupons).

In reality, the financial system is a continued wave of debt issued by and being repaid by government.

At this point, the most important word is confidence. Everything hinges upon central banks, treasury departments and banks to act with responsibility. If a country exceeds its creation of money we will end up with an over supply of money - known as inflation. Inflation is not rising prices. Inflation is an increase in the money supply which may (nearly always does) lead to increasing prices.

Explaining the economic drivers for covid-19

That was a quick introduction to the fiat based monetary system. Lots of significant parts of the economy were left out and we will now try to understand why the Covid-19 pandemic (scamdemic) had to happen.

The fiat based monetary system will always be abused

Fiat money, as a system, is a good system. It makes sense but the moment central bankers decided to print extra money the game is over. Our central bankers have done this countless times out of fear of what is beyond fiat. The only reason this system is still here is because there has been unilateral agreement between central banks to inflate their respective monetary supply. I.E. the central banks increased their money in coordination.

Central planners have continued to print money rather than solve runaway debt.

Government (Parliament) always looks to central bankers to bail them out

There is an uglier form of bailout - bail-in where governments takes private individual's cash. There is a risk of this especially during this depression. 

Very few people understand money - including government

Surprisingly, the function of money and how the system works is a mystery to almost everybody. Here are some examples;

  • If you purchased a quantity of gold every year rather than putting it into your pension most would be far better off.
  • Money is being stolen from you every year through the secret tax of inflation.
  • If the fiat system didn't exist and was based upon hard money, most of this theft would not be able to occur.

That so few understand money, even celebrated economists, means it is incredibly easy to continue this fraud.

The abuse of power to oppress the individual

Recently, Boris Johnson - arch dickhead and blithering idiot has  said UK citizens can now be fined up to £3200 for repeatedly failing to wear a mask in places his parliament/government decides. I remind you to read the science and research on masks, and to understand that we have all but seen the end of ICU admissions for covid-19 (Sars-cov2).

  • The UK state pension is £9110 per year. Imagine if some pensioners simply forget to wear a mask? They could lose 1/3 of their pension.
  • The UK average salary is £29000 per year. Is that 15%?

Mask zealots will be screaming about wearing a mask but to ignore the science and the present situation represents a lack of care to yourself.

What we are seeing is a huge financial threat placed upon most of the population beyond what seems reasonable.

Understanding the scale of the financial fraud

It can be impossible to make sense of a system we think is there functioning for us but is destroying our lives further. This article won't pretend to explain the scale of the fraud but you should start looking at indicators such as;

  • Yearly issuances of government debt.
  • Real rates of return on interest, savings, pensions.
  • Salaries - are they going up?
  • Costs of things we pay for - not what are published retail price indexes.

The biggest standout feature of this scamdemic has been more to do with the amounts of money thrown at;

  • Personal Protective Equipment (PPE) £15 billion in the UK.
  • Early stage biotechnology for vaccines that hasn't been trialled yet. Regularly seeing figures of £60 million, £100 million.
  • The empty Nightingale hospitals.

It seems that many companies are mopping up any of that newly printed government cash.

Some of the fruitier lies

One of the best ones was the claim that Russian hackers had been trying to hack into university laboratories to steal Coronavirus research. I feel a similar way about this in relation to data when having worked in banks. The data on itself doesn't help very much, it is that potential embarrassment or blackmail opportunity exists.

If I tried to imagine somebody stealing all my source code from my software products, what good would it do most people?

What we see is double speak, whilst money is being stolen and handed out on vanity projects - fear about theft of intellectual property through Russian hacking is thrown around.

The power of unforeseen consequences

I believe we can go back months on my post about the economic disasters pre-covid-19. It was abundantly obvious to me that threatening to fine people for not conforming to wear masks, to dissuade people from using public transport, restrict freedom of movement, and encourage home working would destroy the economy.

Yet, the left in particular thought it was a chance to change society for the better. All that has happened is larger businesses operating on better economies of scale have weathered the storm whilst thousands of smaller businesses have either disappeared or are hanging by a thread.

Even those who want to wear a mask, could find if they took it off at the wrong time when the tube is above 40 degrees C, could find themselves getting fined. Why would you want to go for a meal after work or a pub with the ridiculous rules?

That these politicians couldn't see these obvious issues completely proves we should not be governed by them at all. Sadiq Kahn now realises central London is a ghost town.

Closing thoughts on big government and the scamdemic

I kind of haven't got close to going through all of this. One of the standout features of this scamdemic is how it has taken even the most intelligent of people in its wake. This has lead to division with many of the people I thought I knew before. It seems they were cowards all along, not prepared to risk making a stand against very much at all.

One of the big reasons is because they have spent years working on expertise - often professionally accredited and their livelihoods are at risk. Economic depressions respects nobody and we are all at risk.

The question we all have is, how do we, as respectable citizens protest?

The obvious thing is we don't want to get tangled up in violence unless we absolutely have to. Something as ridiculous as not wearing a mask could trigger somebody to attack you and you defend yourself potentially facing an assault charge.

The unilateral acquiescence of government to this virus pandemic has shown democracy doesn't exist right now but to me, confirms democracy just does not work. Democracy is simply mob rule. Parties and politicians win power by convincing more people to vote them into power than somebody else. Often, we vote tactically or to have the lesser of two evils in power.

Let's take mask wearing as a metaphor for democracy. Despite minimal evidence on the positive aspects of mask wearing and the huge number of studies showing the serious health and psychological impacts from wearing masks, many wear them.

My protest is to simply opt out of society. This involves finishing my projects and moving capital out of the UK into harder money assets and finding somewhere not too oppressive. What would be incredible would be for likeminded individuals to do the same and to grow a decent society.

https://www.theguardian.com/world/2020/jul/17/russian-hackers-steal-coronavirus-vaccine-uk-minister-cyber-attack?ref=hvper.com

https://www.youtube.com/watch?v=hfhP7TRziDg

https://metro.co.uk/2020/08/14/working-home-big-problem-london-sadiq-khan-admits-13127183/

https://www.express.co.uk/news/uk/1322638/Sadiq-khan-news-mayor-of-London-coronavirus-underground-news

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