WESTERN GOVERNMENTS ARE OUR WORST ENEMY / MACLEOD FINANCE

Western governments are our worst enemy

The only way to fully understand the cumulative damage caused by successive US, UK, and EU administrations is to stop believing in their statistical nonsense and propaganda.

Alasdair Macleod

Official narratives conceal the damage being done to everyone’s wealth, which is increasingly plundered. 

And the units of account are depreciating at an alarming rate as well. 

Just look at the purchasing power of the dollar, reflected in the value of real, legal money which is gold:

Since only 2016, by this measure it has lost 78% of its purchasing power for foreign holders. 

This is a far cry from the government’s own inflation statistics, slavishly followed by investors, economists, the media, and politicians alike. 

And because investors like to record their asset values in dollars or their own currencies, they are oblivious to this debasement. 

And consumers observe merely that prices are rising, not their currency declining which they would do well to understand.

In western financial circles it is commonly believed that America and her mighty dollar continues to rule the world. 

It is coming as a shock to investors’ subconscious awareness that this might no longer be true. 

It’s subconscious because booming gold, the declining dollar, and rising bond yields are poorly understood by fund managers incapable of escaping from a collective groupthink driven by an anointed elite. 

They are the victims of an intellectual entrenchment.

The fact is that the US, Europe, and the UK have been left behind in manufacturing, technology and communications. 

Take away the standard of living illusion created by welfare entitlements, and they badly lag China, South Korea, and Japan. 

The west is today’s submerging economies and rapidly descending into tomorrow’s third world.

This is the reality which drives western Sinophobia and America’s autarky. 

It was brought home to me by comments from an acquaintance who is spending some time in China. 

He says that city prices for dinner are the equivalent of $10 per head, and that he has a “better than first world lifestyle for minimal money”. 

It is anecdotal confirmation that on a purchasing power parity adjusted basis, China’s economy is now about 25% larger than the US’s.

For those prepared to discard our Anglo-Saxon government propaganda and groupthink, simple facts tell us that despite its war-economy Russia is doing rather well. 

It appears to be booming, with wages having risen substantially over the last few years, so much so that wage earners are actually saving. 

Unemployment is 2.4%, personal income tax 13%, and government debt is only 15% of GDP. 

Its economy is growing by 4.1% at the last count.

Even the CIA’s own website lists Russia as the fourth largest economy by PPP, ahead of Japan and Germany. 

Instead, we are told by our politicians and their macro-economists that Russia is bankrupt.

Neither Russia nor China are ideal, having authoritarian governments. 

China’s government in particular intrudes into personal freedom. 

But in general terms, citizens who desist from criticising the government and its leadership are free to pursue their own interests.

Meanwhile, politicians in America, the UK, and Europe are becoming increasingly authoritarian in a desperate attempt to prop up their economies, their bureaucracies, and to justify warmongering. 

But it is too late. 

The reality is that their economic self-harm is now beyond repair, which is why the dollar’s decline is accelerating.

The coup de grace for western capital markets is close at hand. 

Their economies are sinking, and debt traps are being sprung on governments. 

Malinvestments abound and the risk of bankruptcies is rising. 

Overleveraged banks are desperately trying to derisk their balance sheets, withdrawing credit from private sector lending which is bringing forward the private sector bankruptcies they fear.

Major central banks are deeply in negative equity, potentially emasculated from being lenders of last resort. 

Their managers would already be in jail and wound up if they were commercial entities.

In short, the biggest credit bubble in history is imploding while in a final act of immolation the Trump administration is pursuing indiscriminate trade tariff policies. 

The combination of the largest credit bubble in history with Trump’s protectionism threatens to make the 1929—1932 Wall Street crash and subsequent banking failures look like a vicar’s tea party in comparison.

The shock is beginning to be absorbed by investors who are now losing wealth at an increasing pace, just as they did in 1929. 

But the debt traps which the US, UK, Japan, France, Italy, Spain, and even Germany now face are an additional feature. 

They threaten to wipe out their currencies as these nations’ central banks resist rising interest rates in desperate attempts to save their governments from economic collapse.

That’s the entire G7 group of countries in debt traps which can only lead to spiralling higher bond yields.

The Trump administration is beginning to see some of the unintended consequences of its tariffs, which are driving Japan and South Korea into China’s camp. 

Furthermore, Trump keeps on threatening BRICS nations with extra tariffs if they consider creating a rival to the dollar. 

His officials will be aware that US autarky simply drives neutral nations into the Chinese trade and commercial camp. 

Therefore, China and Russia will dominate the rest of the world outside America’s closest allies. 

They will need a new trade settlement medium.

Despite Trump’s tariff threats against BRICS and South-East Asia, there will come a time when the dollar will be replaced. 

In the light of rapidly evolving events, a new trade currency may prove impractical. 

But before the dollar’s demise, China and Russia are sure to protect their own currencies by linking them to gold in order to secure their purchasing power.

Doubtless, this is what many central banks suspect and is why they are buying all the bullion they can get their hands on — irrespective of price.