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'Memo to Central Banks: You’re debasing more than our currency'

A History Lesson, by Dylan Grice, Societe Generale

At its most fundamental level, economic activity is no more than an exchange between strangers. It depends, therefore, on a degree of trust between strangers. Since money is the agent of exchange, it is the agent of trust. Debasing money therefore debases trust. History is replete with Great Disorders in which social cohesion has been undermined by currency debasements. The multi-decade credit inflation can now be seen to have had similarly corrosive effects. Yet central banks continue down the same route. The writing is on the wall. Further debasement of money will cause further debasement of society. I fear a Great Disorder.

I am more worried than I have ever been about the clouds gathering today (which may be the most wonderful contrary indicator you could hope for...). I hope they pass without breaking, but I fear the defining feature of coming decades will be a Great Disorder of the sort which has defined past epochs and scarred whole generations.

“Next to language, money is the most important medium through which modern societies communicate” writes Bernd Widdig in his masterful analysis of Germany’s inflation crisis “Culture and Inflation in Weimar Germany.” His may be an abstract observation, but it has the commendable merit of being true … all economic activity requires the cooperation of strangers and therefore, a degree of trust between cooperating strangers. Since money is the agent of such mutual trust, debasing money implies debasing the trust upon which social cohesion rests.

So I keep wondering to myself, do our money-printing central banks and their cheerleaders understand the full consequences of the monetary debasement they continue to engineer? Inflation of the CPI might be a consequence both seen and measurable. A broad inflation of asset prices might be a consequence seen, though not measurable. But what about the consequences that are unseen but unmeasurable – and are all the more destructive for it? I feel queasy about the enthusiasm with which our wise economists play games with something about which we have such a poor understanding.


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The Central Bank (FED) is not the only money creator!

All banks create money when they make alleged loans! These loans are created by the alleged borrower! The borrowers signature on the promissory note or loan agreement is what creates the money! The bank hides the truth from the alleged borrower by not telling the truth in the contract. Go to the court house get a copy of your deed of trust, you will see that the bank did not sign the contract! Why??? Because if the bank had signed the contract then the bank would have had to really loan their money.......by not signing the contract the bank does not have to abide by the contract, therefore the bank can take the borrowers signed promissory note or loan agreement without the borrowers knowledge and deposit it just like cash, then turn around and give it back to the alleged borrower and call it a loan! Now this is what I call "Breach of Agreement" because the truth is withheld in the contract from the alleged borrower!

What are you

going to do tomorrow? The jig is up. The dollar has finally equated its self to what it really is (paper + plastic less functional than a grocery bags). Now what? Your hungry. You need contact solution. You want some entertainment. Perhaps a nice book to read and a coffee. Too bad. It's an apocalyptic world now. Nothing happens anymore unless its evil. You can't go anywhere because streets have ended. Someone put obstacles and burning cars everywhere, and your feet are useless because your shoes are worn out and you have a blister. Nothing works anymore either. Hydroelectric powered light switches are all triggers to elaborate boobie traps and gasoline just attracts birds that drop matches. Everyone is a ravenous pillager lurking around for a chance to steel your precious few resources. The world has come to an end because money has lost its trustworthy value.........
Or, perhaps people are still people, wanting the things they want, doing the things they do, and needing the things they need.....

Your hungry you say? Stop by your local farmer for a game of tradezies and pick your self up a sack of spuds and a chicken. Don't worry, he'll be planting more this spring now that he's got you as a new costumer. Oh, but wait....money can't buy you those new shoes you need and your paycheck might as well be monopoly money. Better make a deal with the boss. Take a few days wages in stock and set a few items aside for trade. They'll come in handy. A new set of winter tires might not be useful to you right now, but a trade with your local pharmacist will set you up with a bit of an account for things like bandaids and bootlegged bottles of contact solution.

You wish things were simpler and you didn't have to peddle here and there just to get by? Voila. Your in luck. A few people are melting down their jewelry and paying for goods and labor. Not only that, the local pawn shop made a deal with the scrap yard. Their minting pure copper coins and working as a bank. They're setting up accounts to help people better trade for services rendered.

But all this makeshift surviving is bleak and lonely you say? I wonder if anyone else is feeling the same way? Perhaps, some of them are wanting to talk about it over a case of home brews and some forgotten tunes you use to play on your CD player.......
...and life goes on.

Don't Worry

Nothing is going to happen imo.

There are 7 billion people on this world. That is a lot of people.

ie. Safety in numbers.

Look at theses forsaken cities like Mecico City, Tokyo, Beijing...the South American Cities, Moscow, the Euro capitals, the rest of South East Asia and India, Middle East, Nothern Africa, and East St. Louis :P .....

Crime East Saint Louis - National average : per 100K - 2007 I think.
Murder 101.9 - 5.6
Rape 251.3 - 32.2
Robbery 1,347.0 - 195.4
Assault 5,847.3 - 340.1
Burglary 2,442.8 - 814.5
Automobile theft 2,067.5 - 526.5

p.s. I think only about 25K people live there :O


Cyril's picture

Central bankers and their acquaintances are the best preppers

It turns out that central bankers and their acquaintances in Generational Wealth / "Old Money" Families ... are the best (read: most cynical) preppers and goldbugs...

precisely WHEN --1971 to 2012, ONGOING-- almost nobody else is :


Bottom line :

let us STACK ON, STACK ON, STACK ON with our precious metals.

"Cyril" pronounced "see real". I code stuff.


"To study and not think is a waste. To think and not study is dangerous." -- Confucius

DJP333's picture

I bet Bernanke and Krugman

both have a ton of precious metals even though they promote Keynesian economics. That thought makes my blood boil.

"It’s not pessimistic, brother, because this is the blues. We are blues people. The blues aren’t pessimistic. We’re prisoners of hope but we tell the truth and the truth is dark. That’s different." ~CW

Cyril's picture

Same here. Same thought alone makes me sick more than ever too.

Same here. Same thought alone makes me sick more than ever too.

"Cyril" pronounced "see real". I code stuff.


"To study and not think is a waste. To think and not study is dangerous." -- Confucius

ecorob's picture

superb insight...

Hold on to your metals!

its 'cos I owe ya, my young friend...
Rockin' the FREE world in Tennessee since 1957!
9/11 Truth.

DJP333's picture

great article

"And now the social debasement is clear for all to see. The 99% blame the 1%, the 1% blame the 47%, the private sector blames the public sector, the public sector returns the sentiment … the young blame the old, everyone blame the rich … yet few question the ideas behind government or central banks ..."

"It’s not pessimistic, brother, because this is the blues. We are blues people. The blues aren’t pessimistic. We’re prisoners of hope but we tell the truth and the truth is dark. That’s different." ~CW