[Editor’s Note from Jim Rickards:
The following article describes a fictional dystopia in the spirit of
Brave New World or 1984. It is not a firm forecast or prediction in the
usual analytic sense. Instead, it’s intended to provide warning, and
encourage readers to be alert to dangerous trends in society, some of
which are already in place. Thank you.]
As I awoke this morning,
Sunday, Oct. 13, 2024, from restless dreams, I found the insect-sized
sensor implanted in my arm was already awake. We call it a “bug.” U.S.
citizens have been required to have them since 2022 to access government
health care.
The bug knew from its biometric monitoring of my brain wave
frequencies and rapid eye movement that I would awake momentarily. It
was already at work launching systems, including the coffee maker. I
could smell the coffee brewing in the kitchen. The information screens
on the inside of my panopticon goggles were already flashing before my
eyes.
Images of world leaders were on the screen. They were issuing
proclamations about the fine health of their economies and the advent of
world peace. Citizens, they explained, needed to work in accordance
with the New World Order Growth Plan to maximize wealth for all. I knew
this was propaganda, but I couldn’t ignore it. Removing your panopticon
goggles is viewed with suspicion by the neighborhood watch committees.
Your “bug” controls all the channels.
I’m mostly interested in economics and finance, as I have been
for decades. I’ve told the central authorities that I’m an economic
historian, so they’ve given me access to archives and information denied
to most citizens in the name of national economic security.
My work now is only historical, because markets were abolished
after the Panic of 2018. That was not the original intent of the
authorities. They meant to close markets “temporarily” to stop the
panic, but once the markets were shut, there was no way to reopen them
without the panic starting again.
My work now is only historical, because markets were abolished after the Panic of 2018.
Today, trust in markets is completely gone. All investors want
is their money back. Authorities started printing money after the Panic
of 2008, but that solution stopped working by 2018. Probably because so
much had been printed in 2017 under QE7. When the panic hit, money was
viewed as worthless. So markets were simply closed.
Between 2018–20, the Group of 20 major powers, the G-20,
abolished all currencies except for the dollar, the euro and the ruasia.
The dollar became the local currency in North and South America.
Europe, Africa and Australia used the euro. The ruasia was the only new
currency — a combination of the old Russian ruble, Chinese yuan and
Japanese yen — and was adopted as the local currency in Asia.
There is also new world money called special drawing rights, or
SDRs for short. They’re used only for settlements between countries,
however. Everyday citizens use the dollar, euro or ruasia for daily
transactions. The SDR is also used to set energy prices and as a
benchmark for the value of the three local currencies. The World Central
Bank, formerly the IMF, administers the SDR system under the direction
of the G-20. As a result of the fixed exchange rates, there’s no
currency trading.
All of the gold in the world was confiscated in 2020 and placed
in a nuclear bomb-proof vault dug into the Swiss Alps. The mountain
vault had been vacated by the Swiss army and made available to the World
Central Bank for this purpose. All G-20 nations contributed their
national gold to the vault. All private gold was forcibly confiscated
and added to the Swiss vault as well. All gold mining had been
nationalized and suspended on environmental grounds.
The purpose of the Swiss vault was not to have gold backing for
currencies, but rather to remove gold from the financial system entirely
so it could never be used as money again. Thus, gold trading ceased
because its production, use and possession were banned. By these means,
the G-20 and the World Central Bank control the only forms of money.
Some lucky ones had purchased gold in 2014 and sold it when it
reached $40,000 per ounce in 2019. By then, inflation was out of control
and the power elites knew that all confidence in paper currencies had
been lost. The only way to re-establish control of money was to
confiscate gold. But those who sold near the top were able to purchase
land or art, which the authorities did not confiscate.
Those who never owned gold in the first place saw their
savings, retirement incomes, pensions and insurance policies turn to
dust once the hyperinflation began. Now it seems so obvious. The only
way to preserve wealth through the Panic of 2018 was to have gold, land
and fine art. But investors not only needed to have the foresight to buy
it… they also had to be nimble enough to sell the gold before the
confiscation in 2020, and then buy more land and art and hang onto it.
For that reason, many lost everything.
Land and personal property were not confiscated, because much of
it was needed for living arrangements and agriculture. Personal property
was too difficult to confiscate and of little use to the state. Fine
art was lumped in with cheap art and mundane personal property and
ignored.
Stock and bond trading were halted when the markets closed.
During the panic selling after the crash of 2018, stocks were wiped out.
Too, the value of all bonds were wiped out in the hyperinflation of
2019. Governments closed stock and bond markets, nationalized all
corporations and declared a moratorium on all debts. World leaders
initially explained it as an effort to “buy time” to come up with a plan
to unfreeze the markets, but over time, they realized that trust and
confidence had been permanently destroyed, and there was no point in
trying.
Wiped-out savers broke out in money riots soon after but were
quickly suppressed by militarized police who used drones, night vision
technology, body armor and electronic surveillance. Highway tollbooth
digital scanners were used to spot and interdict those who tried to flee
by car. By 2017, the U.S. government required sensors on all cars. It
was all too easy for officials to turn off the engines of those who were
government targets, spot their locations and arrest them on the side of
the road.
In compensation for citizens’ wealth destroyed by inflation and
confiscation, governments distributed digital Social Units called Social
Shares and Social Donations. These were based on a person’s previous
wealth. Americans below a certain level of wealth got Social Shares that
entitled them to a guaranteed income.
Those above a certain level of wealth got Social Donation units
that required them to give their wealth to the state. Over time, the
result was a redistribution of wealth so that everyone had about the
same net worth and the same standard of living. The French economist
Thomas Piketty was the principal consultant to the G-20 and World
Central Bank on this project.
By 2017, the U.S. government required sensors on all cars.
To facilitate the gradual freezing of markets, confiscation of
wealth and creation of Social Units, world governments coordinated the
elimination of cash in 2016. The “cashless society” was sold to citizens
as a convenience. No more dirty, grubby coins and bills to carry
around!
Instead, you could pay with smart cards and mobile phones and
could transfer funds online. Only when the elimination of cash was
complete did citizens realize that digital money meant total control by
government. This made it easy to adopt former Treasury Secretary Larry
Summers’ idea of negative interest rates. Governments simply deducted
amounts from its citizens’ bank accounts every month. Without cash,
there was no way to prevent the digital deductions.
The government could also monitor all of your transactions and
digitally freeze your account if you disagreed with their tax or
monetary policy. In fact, a new category of hate crime for “thoughts
against monetary policy” was enacted by executive order. The penalty was
digital elimination of the wealth of those guilty of dissent.
The entire process unfolded in small stages so that investors and
citizens barely noticed before it was too late. Gold had been the best
way to preserve wealth from 2014–18, but in the end, it was confiscated
because the power elites knew it could not be allowed. First, they
eliminated cash in 2016. Then they eliminated diverse currencies and
stocks in 2018. Finally came the hyperinflation of 2019, which wiped out
most wealth, followed by gold confiscation and the digital socialism of
2020.
By last year, 2023, free markets, private property and
entrepreneurship were things of the past. All that remains of wealth is
land, fine art and some (illegal) gold. The only other valuable assets
are individual talents, provided you can deploy them outside the system
of state-approved jobs.
Regards,
Jim Rickards
for
The Daily Reckoning
