The returning years are going to be a choppy ride for more reasons than appear in media talk, talk shows and podcasts , and injury than the ranters and “experts” picture.  ,
The world’s money are taking a dramatic change. The world has been living on cash ( power, water, land ) and funds for many, many years and that has stopped.  ,
Economists blithely call it” The Great Moderation” and congratulate themselves. Highly skilled in their control, they are innocent of record and other kinds of information necessary to comprehending today’s scenario.  ,
American economists simply instructed their leaders to “max the national credit card,” as was the case once President Nixon cut the economy’s relationship to gold, leaving the only restraint that kept American politicians and the general public moderately accountable.
The United States has since changed from being Earth’s greatest borrower nation to becoming its greatest creditor in two decades, a remarkable transition made possible by the government’s altered outlook on “living on record.” Before the late 1950s, if one wanted to buy something, one saved for it, there was no credit, only “layaway plans” . ,
Living on cash … done!
The general credit card development by Bank of America in 1958 established a new standard for “living on credit” privately, and this intellectual revolution overturned the old custom in the United States that the state itself had balance its budget. This has been reflected in other countries ‘ mindsets and financing practices.  ,
In short, the world has been running down stores of capital/credit built up over two centuries ( in America ) and of energy/water/land built up everywhere over eons ( fossil fuels, deep aquifers, great forests ).  ,
Not helpful if ( as in the US) public discourse is predominated by ignorant people who reject science and are ignorant of education and who only care about life’s endless sensory pleasures.  ,
As everyone is forced to live on what they can produce ( or steal – think of Russia invading Ukraine ), which some disparagingly refer to as “austerity,” living standards will decline worldwide.
Who will suffer the most in the bitter political conflict that is now coming and going, which is already getting worse most everywhere.
Inflation is one of the many ways that the powerful move purchasing power from the weak and the oppressed upward to those with greater political influence, including themselves.  ,
At the 2022 Jackson Hole Federal Reserve Economic Symposium, US Federal Reserve Chairman Jerome Powell stated that” the burdens of high inflation fall heaviest on those who are least able to bear them.” He made no mention of his desire for this to occur.
By the time the final exam was over, everyone who studied Economics 101 had understood why inflation occurs. The details were forgotten by those who sought other careers. Those who went on to become economists in their careers did not forget, but they are fervently motivated to speak out about uncomfortable truths.  ,
Hence the hand-wringing, the hysterics, the rampaging ignorance in the headlines and in talking head “expert” analyses.  ,
The inflationary truths
Everyone is aware that a rising imbalance between financial claims and real deliverables of goods and services must eventually lead to inflation, whether it be greater or less.
 , * Claims lacking economic substance will be brought into balance by nominal ( inflation ) or real ( default ) extinction. Slowly or suddenly, or one after another.
 , * Very many small people, and some big people, absolutely must be ruined almost everywhere. They won’t be happy.
No one is willing to ruin, and political maneuverings forbid a planned rebalancing of claims and deliverables almost everywhere. So those intent on staying in office must, to calm the victims as ruin nears, organize the “it’s terrible, who could have imagined” performance we now see.
 , * Man has free will so limitless technical “degrees of freedom” exist. No one is sure how or how quickly ruination will occur.  , Central banks ‘ constantly wrong projections (especially the US Fed’s ) are the stuff of jokes.  ,
( Almost exclusively, the Bank for International Settlements maintains the reliability of its analyses. ) Because of the unstable criticality that any snowflake can bring an avalanche, all forecasts are useless.
The inflation program “works” by purposefully lowering those who are ultimately powerless to resist to increase purchasing power.  ,
If one accepts that passing legislation to pass legislation that shifts the burden of inflation to someone else requires political power, it is obvious from experience and common sense.  ,
Nevertheless, most economists deny the goal to grind down the poor, claiming” that’s too cynical” or denying anyone is” seriously trying to use inflation in an organized way to extract income” ( direct quote from the author’s Harvard classmate– a professional economist ).  ,
They go against the unquestionable moral tenet that the means must be won in order to will the end.
Balking economists, blind commentators
To understand why criticizing economists and the majority of financial commentators are unable to take action or even acknowledge the obvious, one must turn to the science of human behavior.  ,
First, the level of conscious awareness: some cognize this truth but tell themselves ( correctly ),” Complicity in the program of promiscuous money creation to grind down the poor and uplift the rich is a regrettable necessity to keep my job”  , or” If I don’t keep moving my employer’s product I’ll be fired”.
This is common behavior at all levels of government, media and commerce right up to the highest.
Second, Sigmund Freud’s epiphany teaches us that most human behavior results from hidden mental movements. Among the numerous primary and secondary defense strategies we humans use to prevent mental discomfort, those who reject or avoid the truth use denial, devaluation, and rationalization.
However, those in power must still give up a few financial asset owners despite the fact that they are the most priceless members of the powerful. Every player understands the lifeboat shortage, so it ‘s , sauve qui peut.
Rising inflation is not a surprise and not unwelcome. It is the well-understood, deliberate, and well-planned solution to the excessive amount of economic justification created by those in office. Public hand-wringing is only performative.
In November of 2021, the chairman of the educational foundation on whose executive committee the author then sat asked during a finance meeting with the foundation’s Swiss bank advisor,” Is Jerome Powell telling us the truth]about inflation ]” ? ,
He replied,” I just talked to an old friend about this, who recently retired as a long-time board member of the Federal Reserve Bank of __ _ _ _ __. He said’ No. If he told the truth, there’d be panic. He’d be fired immediately.'” And we can see it now.
Key financial values, presently standard deviations off in most countries, must revert toward their means. When they do, enormous notional wealth that is based on false economic claims will vanish. Life as we’ve known it for a long time will come to an end. Some of the” smart money” knows this.  ,
Think Warren Buffett’s recent portfolio changes, the People’s Bank of China’s gradual shift from US Treasuries to gold bullion and JP Morgan’s January 2021 report” Long Term Capital Markets Assumptions”, which warned of a coming decade of” shocking… negative real return ]s ]” for both stocks and bonds.  ,
Their now-expanding positive correlation disproves generations of fundamental investment dictum. JP Morgan’s “imperative” ( their exact word, elaborated in 130 pages rather than in a single short sentence ): as much as possible, flee financial assets while you can.
Ever since 1971, serious thinkers have planned for the inevitable, whether slow or chaotic. Special Drawing Rights may help to prevent or delay a cataclysm as a result of the threat to international banks of the slow-rising scenario that is currently affecting highly indebted nations.  ,
In order to quickly and chaotically react, American planners in 1977 promulgated the International Emergency Economic Powers Act, which authorized the United States to seize any foreigner’s property and impose the burden of a cataclysm on foreigners.  ,
Using pre-IEEPA mechanisms the United States has twice done this, in 1934 and 1971, and this reset ( note the periodicity ) is actually overdue. Shifting the pain to foreigners is America’s canonical solution, in former Treasury Secretary John Coney’s succinct declaration of this durable American strategy:” It’s our currency, but it’s your problem”.
surviving to the other side
America has carefully planned significant events for numerous victims. Anyone in almost any nation would have planned the same way. We just don’t know the victims ‘ names.  ,
It’s now time for everyone to ask whether he has acted to save himself, his family, his business, his institution. Otherwise, he is still on the victim list.
Resources want to be in producing real estate, productive assets like companies that add value to the economy ( neither Facebook nor crypto, obviously ), precious metals, and possibly some commodities in order to get to the other side of what’s coming in the short and medium terms (5-10 years from now ), but that also requires a lot of knowledge because the demand for raw materials will drop when the crash comes ).
Most “investment” chatter centers on epiphenomena like stock prices and trends, which are frequently disassociated from real value-added processes ( if there is any connection at all ). The analyses that appear in newspaper articles and “investment advice” from so-called experts typically use the word “asset values” as though they represent actual wealth.  ,
The “value” will be known only in the future, as real income is transferred from value-added productive processes to the owners. All we “know” today are the prices, presently but loosely linked to value-added productive processes.  ,
Listeners to this confused thinking will encounter a number of negative outcomes. The Silicon Valley Bank collapse in March 2023 sounded the celestial trumpet.
After co-authoring a timeless analysis of warfare, Jeffrey Race spent 50 years researching and teaching economics, political science, and technology transfer in Asia. He currently oversees a Boston-based electronics design firm.  ,