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Energy is the economy. That’s a radical concept because most people think that the economy runs on money. It doesn’t.

What is energy? It is the potential or capacity to do work. The economy runs on work. That’s why energy is the economy. That’s simple.

What is money? That’s a little more complex.

“Money is not the value for which goods are exchanged, but the value by which they are exchanged.”

John Law

In other words, money has no inherent value. Economists often attempt to change the subject by pointing out that money is at least a medium of exchange, a store of value or a unit of account. The same, however, could be said for cigarettes that were used as money in Communist Romania in the 1980s.

“Society runs on energy and materials, but most people think it runs on money…[Money] is created as debt subject to mathematical laws of compound interest…Money eventually gets spent on a good or service which will contain embodied energy. Money is a claim on energy yet its creation is not tethered to energy availability or cost.”

N. J. Hagens

In the end, money–as paper, coins, gold or cigarettes–is just a financial claim on energy, a marker, a unit of account. For example, I may contract someone to do work for me—to build a fence or to move some heavy equipment—and we agree on a payment amount. I pay him dollars for his physical work (joules). He may then use those dollars to buy food (joules), gasoline for his car (joules) or contract someone else’s labor to do some work for him (joules). Money is the medium of exchange but the value exchanged is energy.

…click on the above link to read the rest…

Unwinding the Financial System

October 6, 2023

Unwinding the Financial System

This article looks at the collateral side of financial transactions and some significant problems that are already emerging.

At a time when there is a veritable tsunami of dollar credit in foreign hands overhanging markets, it is obvious that continually falling bond prices will ensure bear markets in all financial asset values leading to dollar liquidation. This unwinding corrects an accumulation of foreign-owned dollars and dollar-denominated assets since the Second World War both in and outside the US financial system.

Furthermore, collapsing collateral values, which are increasingly required backing for changing values in over $400 trillion nominal in interest rate swaps are a new driver for the crisis, forcing bond liquidation, driving prices down and yields higher: we are in a doom-loop.

What action can the authorities take to ensure that counterparty risk from widespread failures won’t take out inadequately capitalised regulated exchanges?

It seems that they acted some time ago by giving central security depositories (The Depository Trust and Clearing Corporation, Euroclear, and Clearstream) the right to pool securities on their registers and lend them out as collateral. Your investments, which you think you may own can be absorbed into the failing financial system without your knowledge.

This seems particularly relevant, given the appointment of JPMorgan Chase as custodian of the large gold ETF, SPDR Trust (ticker GLD). In a test case in the New York courts concerning Lehman’s failure, JPMC was given legal protection should it seize its customer’s assets.

This important erosion of property rights is poorly understood. But as the financial distortions are unwound, leading to unintended consequences such as bank failures and ultimately the collapse of the dollar-based fiat currency regime, the implication is that holders of physical gold ETFs will be left owning an empty shell at a time when they might have expected some protection from the collapse of the value of credit.

…click on the above link to read the rest…

Will This Fall Be the Fall of Falls?

August 29, 2023

WILL THIS FALL BE THE FALL OF FALLS?

MAMChat Egon von Greyerz & Matt Piepenburg

This 25 minute video with Matthew Piepenburg and myself is probably one of the most important discussions that we have had.

For years we have both warned investors about the consequences of a system based on unlimited money printing, debt creation and money debasement.

The world economy and the financial system is now on the cusp of a precipice.

No one can forecast when the coming violent turn will come.

It can take years or it can happen tomorrow.

Future historians will tell us when it happened.

In the meantime investors have one duty to themselves and their dependents which is to protect their wealth from total destruction.

Money printing and debt creation have taken markets to dizzy and unsustainable levels.

Since Nixon closed the gold window in 1971, both global and US debt is up over 80X!

And asset markets have been inflated by this fake money with the Nasdaq up 120X and the S&P up 44X since 1971.

But the bubbles are not just in stocks but also in bonds, property, art, other collectibles etc, etc.

In our view, the time to pay the Piper is here and now. The consequences will be costly, even very costly for the investors who ignore this major risk.

Just as bubble assets can go up exponentially they can implode even faster.

RISK OF MARKETS FALLING 50-90%

Sustained corrections of 50% to 90% in stocks and bonds are very possible and when the bubble bursts it will go so fast that there won’t be time to get out or to buy insurance.

Whether the Everything Bubble turns to theEverything Collapse today or tomorrow, the time to protect your assets is before it happens which means NOW.

…click on the above link to read the rest…

‘Britcoin’ “Will Change Everything”, Analyst Warns

July 11, 2023

‘Britcoin’ “Will Change Everything”, Analyst Warns

A Bank of England (BoE) digital pound will be a “complete restructure” of the current financial system and can give the government more control on how people use their money, a financial analyst warns.

Some 130 countries are exploring a central bank digital currency (CBDC), according to the Atlantic Council.

The Bank of England (BoE) and the Treasury are currently considering feedback on how to lay the groundwork for a digital pound, nicknamed “Britcoin” by Prime Minister Rishi Sunak when he was chancellor.

A decision is yet to be made on whether or not to launch a digital pound. But if the plan goes ahead, it could be issued in just a few years’ time to complement physical cash.

Arguing against a retail CBDC, writer and financial analyst Susie Violet Ward said to NTD’s “British Thought Leaders” programme that a centrally controlled digital currency could lead to the curtailing of freedom, and that citizens have not been given enough information to enable robust debate.

If Britcoin is launched, it will be issued by the BoE and backed by the Treasury. Private firms, such as Fintech companies or banks, are expected to provide customers with digital wallets—computer or phone apps that are needed to manage transactions of the digital currency.

Unlike decentralised cryptocurrencies such as bitcoin, the digital pound won’t offer anonymity, which provides privacy but on the downside can also be exploited by criminals.

The infrastructure would also be programmable, enabling app providers to offer extra functions such as budgeting tools.

Ms. Ward said it could mean “they could tell you where to spend your money, what to spend it on, and potentially, if it expires.”

…click on the above link to read the rest…

#246: The Surplus Energy Economy, part 1

February 25, 2023

#246: The Surplus Energy Economy, part 1

FROM FIRST PRINCIPLES

Introduction

We have reached a turning-point at which economics and the economy have parted company. Orthodox economics continues to promise growth in perpetuity, but the economy itself is going in the opposite direction.

The explanation for this is simple. Conventional economics assumes that the economy is driven by money, which is entirely under our control. But the economy is, in reality, not a financial system, but a physical one, which uses energy to convert raw materials into the products and services which constitute prosperity. The modern economy has been built on abundant, low-cost energy from fossil fuels, but this dynamic is winding down and, as we shall see in a future instalment, we have no complete (or timely) alternative with which to replace it.

The aim with The Surplus Energy Economy is to set out a comprehensive assessment of the condition and prospects of the world economy and financial system, seen from the perspective that the economy is shaped by energy, not money. This series of articles will be as specific as possible, using data from the SEEDS economic model.

The conclusions reached here necessarily contradict the orthodox line, which is that the supposed ‘normality’ of growth will soon return, and that seamless transition to renewable energy sources will deliver economic expansion in perpetuity.

The economy is analysed here as a material system which has started to contract after reaching physical constraints imposed by the availability and cost of energy. Similar limits apply to environmental tolerance for energy-based economic activity.

Findings will come later in this series, but we are completely unprepared for the reversal of prior growth in the economy. The ending of growth has not arrived without warning, and we can identify a precursor zone, starting in the 1990s, which was characterised by deceleration, followed by stagnation.

…click on the above link to read the rest…

The Global Financial System Is A Rube Goldberg Machine

January 4, 2023

The Global Financial System Is A Rube Goldberg Machine

Much Of The Economy Is Like This Machine

More than one economist, big wig CEO, and Fed watcher has alleged the problems haunting the financial system have very deep roots. These people often contend governments and central banks have not fully rectified the problems causing the great financial crisis of 2008. Instead, they have merely papered over our failures by printing money and flooding the system with liquidity.

Let’s just cut to the chase. Overall, the global financial system is not a well-designed efficient machine. Instead, it is a cobbled-together mess all glued together in a haphazard way to get the job done. To make matters worse, this system is greased by the greed of those who benefit from stealing a little from here and there. In the real world, things are usually not intentionally designed to be complicated but the reality is that they just are.

This means that more often than we would like to admit, systems thrown together with various parts or pieced together haphazardly are prone to be unreliable. When we try to explain events in terms of cause and effect the bigger picture has a way of getting lost. Often hidden away is the risk that results when complex poorly built systems become codependent upon other poorly built systems. Bestselling author Nassim Taleb who wrote, “The Black Swan” detailed in his book how when something is highly complicated highly improbable and unpredictable events can and do occur.

While pondering the conundrum that has become our current economy, I stumbled upon an analogy. Simply put, the global economy is like a Rube Goldberg machine. These are “goal-oriented” contraptions built in a ridiculously complicated way to perform what would normally be a simple task…

…click on the above link to read the rest…

Tim Watkins: Anatomy of the Crisis

December 1, 2022

Tim Watkins: Anatomy of the Crisis

Our Financial System Is Optimized for Sociopaths and Exploitation

February 23, 2022

Our Financial System Is Optimized for Sociopaths and Exploitation

Let’s call this financial system what it really is: the MetaPerverse, a conjured world of self-serving cons.

We live in a peculiar juncture of history in which truth has been banished as a threat to the maximization of private gain, i.e. the hyper-pursuit of self-interest. Evidence that supports a causal chain has been replaced by cherry-picked data that supports a self-serving narrative: both the evidence and narrative are manufactured to serve the interests of the few at the expense of the many.

In this juncture of history, evidence is easily disputed because the process of manufacturing self-serving evidence has been perfected. Indeed, self-serving evidence is now a commodity which can be purchased wholesale: rig the sample size, massage the data statistically, conjure up a context that serves to frame the evidence in a slippery self-interested fashion, omit disinterested evidence and contexts, top with arcane math and voila, evidence and narrative are presented as “facts” rather than what they really are, an elaborate, well-staged con designed to maximize the private gains of the few by exploiting the many.

Organizing the entire system to serve the pathological greed of the few is best served by devaluing truth to mere opinion and causal chains to mere narratives. In this juncture of history, truth has been revealed as a chimera; there is only opinion, and all opinions are equal. Opinions are beliefs, and all beliefs are equal. All narratives are equal. All questions boil down to values: values are all equally detached, free-floating and of the same value: zero.

…click on the above link to read the rest of the article…

IMF, World Bank & 10 Countries Held Alarming “Simulation” Of Global Financial System Collapse

December 22, 2021

IMF, World Bank & 10 Countries Held Alarming “Simulation” Of Global Financial System Collapse

Earlier this month Reuters produced a report which didn’t receive nearly enough attention among the American public – its contents would be sure to alarm most people concerned with the outbreak of yet more ‘global catastrophes’. At the very least it’s curious timing: amid the recent pandemic induced disruption in global supply chains, powerful nations and banking institutions decided to get together to run a global economic collapse scenario.

The report described that Israel led a “10-country simulation of a major cyber attack on the global financial system in an attempt to increase cooperation that could help to minimize any potential damage to financial markets and banks.” It was centered on a catastrophic scenario in which “hackers were 10 steps ahead of us,” according to one official who took part.

Collapse, illustrative image via Reuters

Dubbed “Collective Strength”, the exercise was held in Jerusalem (after being moved from the original proposed location of Dubai) and included the participation also of the United States, UK, United Arab Emirates, Austria, Switzerland, Germany, Italy, the Netherlands and Thailand. Officials from the International Monetary Fund (IMF), World Bank and Bank of International Settlements were also involved.

The financial-geopolitical gaming simulation was set amid a scenario where sensitive data was leaked on the Dark Web, which combined with “fake news” reports going viral across societies, resulting in the collapse of global markets and an ensuing run on banks. Further, the simulation envisioned a series of devastating hacks targeting global foreign exchange systems, which also disrupted transactions between importers and exporters, according to Reuters.

…click on the above link to read the rest of the article…

The Losses are Hidden – Bill Holter

March 28, 2021

The Losses are Hidden – Bill Holter

Precious metals expert and financial writer Bill Holter has been predicting the financial system is going to go down sooner than later. He says the signs are the lies being told to the public to try to hold the system together. Holter explains, “If you look at everything, nothing is natural. Everything is contrived. We are lied to about pretty much everything 24/7. . . . They lied about everything regarding Covid. They have lied about the election. They are lying about the unemployment rate. They are lying about inflation. They are lying about the true amount of total debt outstanding. They are lying about everything. And one other tidbit, 36% of all dollars outstanding have been created now, were created in the last 12 months. Oh, and the Fed is no longer going to publish M2. . . . How can you make a business decision if you don’t know how much money is outstanding?”

This leads us to all the digital dollars sloshing around and Crypto currencies. Holter says, “Crypto currencies are a perceived exit from the system. They are perceived as a safe haven. If Bitcoin, which is nothing but digital air, can become $65,000 per unit, what can something real become worth? What these crypto currencies are doing is illustrating a debasement of all the fiat currencies.”

Bill Holter says big loses in the financial world are being hidden from the public. Take real estate, for example. Holter points out, “The average mall in the United States is appraised 60% lower than it was a year ago. That’s a 60% drop. It’s now worth 40%. There is debt on these things they owe. These malls were not bought, built and created out of cash…

…click on the above link to read the rest of the article…

greg hunter, usa watchdog, financial system, financial system collapse, bill holter, debt, fed, us federal reserve, money printing, credit expansion

Hot Money

February 20, 2021

Hot Money

I watched the new documentary Hot Money by Susan Kucera tonight.

An intelligent world-wise father (General Wesley Clark) and his son discuss some of the problems we face with many smart participants. I don’t think they interviewed a single idiot, which was refreshing.

They know something is seriously wrong and make an honest attempt to connect the dots. They come tantalizingly close to a complete picture of reality, but miss the all important overshoot drivers of over population and declining returns from non-renewable energy.

Which of course means they understand everything, except what matters.

Nevertheless, Hot Money is excellent and worth watching because it has a lot of intelligent substance.

I also think it indicates a growing mainstream awareness of how close we are to collapsing, and I suspect herd awareness (coupled with denial of the real causes) may be the trigger.

Some of the important points made:

the financial system is a bomb waiting to explode, climate change may be the trigger
climate change is real and very serious
droughts, floods, and fires are a big problem now
it now takes more than 3 dollars of debt to create 1 dollar of growth, it used to take less than 1 dollar of debt to create 1 dollar of growth
farmers are struggling and failing due to climate change, debt, high input costs, and low crop prices
real incomes and living standards are falling despite lower taxes than the 50’s
some young couples are not having children because they see a terrible future
it was much easier to make a profit in the good old days, doubly so if you were early enough to steal land from the aboriginals
companies now invest more money in stock buy-backs than R&D
there is no such thing as trickle down economics

…click on the above link to read the rest of the article…

2021 A Year of Mass Bankruptcy – John Rubino

October 29, 2020

2021 A Year of Mass Bankruptcy – John Rubino

Financial writer John Rubino says, “2021 is going to be a pivotal year” in the debt markets. Rubino says lots of debt will either be bailed out or defaulted on in some way. Because of CV19, there is no getting around this. The debt clock has been pushed forward by years. One too huge to hide debt problem are heavily indebted U.S. states and cities. Rubino says, “You have to call this a scam because years ago, they decided to offer wildly over generous pensions to public sector unions. In return for that, the public sector unions elected people who would keep on doing that and keep the gravy train going. . . . Back then, it worked . . . but now they are all retiring, and these states and cities are heading for some version of bankruptcy at an accelerated rate. It was always going to happen in the next 10 years, but with the pandemic, the time frame has been moved way up. So, probably 2021 will be a year where a lot of these guys hit a wall where they have no choice but to default on a lot of their obligations. That’s going to throw the financial system into turmoil.”

Rubino points out, “If they can’t pay their bills, they can’t pay their bills. If it can’t happen, it won’t happen. So, you get effective bankruptcy via defaults for a lot of these places. That means massive layoffs of city and state workers and turmoil in the bond market. That kind of thing alone is enough to send the U.S. back into recession assuming we are out of recession when it happens.

…click on the above link to read the rest of the article…

Global Financial System Broken & Bankrupt – Egon von Greyerz

March 22, 2020

Global Financial System Broken & Bankrupt – Egon von Greyerz

Financial and precious metals expert Egon von Greyerz (EvG) operates the largest private gold vault in the world in Switzerland. More than a year and a half ago, EvG warned here on USAWatchdog.com that “risk is exponential and unmeasurable” because of the estimated two quadrillion of derivatives and debt in the global financial system. He also warned that “at some point, all hell will break loose.” Looks like hell has indeed broken loose because of the China virus, and now EvG contends, “The system is bankrupt. . . . The system is broken and bankrupt. This did not start now with the Coronavirus. It didn’t start in August and September (of 2019) when central banks said we would do everything we can with the Fed QE, repos and the ECB (European Central Bank) QE. . . . This started a long time ago. The system was broken at the beginning of this century. The 2007-2009 crisis was the first signal that the financial system was not functioning. They threw $25 trillion at it in financing and guarantees, etc., but I always said 2007-2009 was a rehearsal. We are now approaching, sadly, the real thing. This is the end of a two to three hundred year cycle. So, we are going to see some extremely difficult times. The Corona virus is a horrible catalyst, but that is all it is. It’s not the reason for the problem. The reason for the problem is a broken financial system . . . and now we are starting the final stage of the end of this financial system.”

…click on the above link to read the rest of the article…

MASSIVE SURGE IN PHYSICAL SILVER BUYING: Totally Distorted & Broken Markets

March 18, 2020

MASSIVE SURGE IN PHYSICAL SILVER BUYING: Totally Distorted & Broken Markets

The world economic and financial markets have entered into a crippling cannibalization of the system in which few are prepared. While the politicians, financial analysts, and media are providing optimistic forecasts for the future, they continue to underestimate the seriousness of the global contagion. Thus, after a week or two, these forecasts will be revised lower (once again) to reflect a more gloomy, negative and more realistic outlook.

So, in another a few weeks, the world as it pertains to this contagion will look a lot worse than it does today. I’d imagine the Dow Jones Index will likely shed another 5-8,000+ points during this period. Also, the global supply chain disruptions will kick into high gear as month-long lockdowns in various countries finally impact manufacturers and retailers across the world.

I haven’t put out too many new updates and articles over the past few weeks. Rather, I decided to take a step back to research and watch as this global contagion continued to unfold. However, I will be putting out more updates, videos, and articles over the next month as I believe most people are still unprepared for what’s coming.

Although, I have been a bit busy on Twitter recently. You can follow my TWEETS and REPLIES on Twitter here: SRSRocco Report Twitter Feed. When I posted this Tweet on March 15th, the price of oil was $31. I stated that the price would likely fall to $29 the next day… and it did. The relevant sentence in the tweet below is… WE DON’T COME BACK FROM THIS ONE.

…click on the above link to read the rest of the article…

The Demise of the Financial System is Imminent

March 18, 2020

THE DEMISE OF THE FINANCIAL SYSTEM IS IMMINENT

“Next five years is not about winning but surviving.” This is the headline of an article I wrote in early August 2019. At that point I was primarily thinking of economic survival. But now the world is facing multiple threats and multiple failures. As I have already stated, the Coronavirus is not the cause of global market crashes but the catalyst.

But even if I have been totally certain that the world will see an economic collapse greater than any crisis for 100s of years, this is the worst catalyst that anyone could have expected. Yes, a global virus was always one of the potential risks but of all triggers, this one was certainly the most unwelcome and horrible.

CORONAVIRUS IS FAR MORE SERIOUS THAN THE WORLD REALISES

Before I talk about markets and gold further on in this article, I will mention some of the horrific effects that are now hitting the world due to Coronavirus. Just to summarise that my market views haven’t changed. Stocks will go down by at least 90% from here and gold will surge to levels that few can imagine.

No one knows the extent of people affected by the CV. China has never given us the real figures. And the rest of the world hasn’t got a clue where they stand. Every country thinks they are in control of the situation until they panic. Outside of Asia, poor Italy got it first and there we have seen an exponential growth of the number of people affected. And still, in Italy like in most other countries, they haven’t got a clue how many people have been infected.

…click on the above link to read the rest of the article…

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