Wednesday, December 17, 2014

Russia’s Crisis: Virtuous Currencies, Virtuous Economies And Virtuous Nations Don’t Collapse


I’m continuing the interruption of my regular posts because of the Russian ruble crisis.  We may be witnessing the most important event in the global economy in the last three or four decades.   Far more important than 2008.  We don’t yet see the importance of this but we will at some point.   It is exposing a systemic violence and fraud that has been building for decades.  That is, the power grabs of the state which include the monster they have created called globalization.   At some point, with enough currencies  around the world experiencing major crises, we could see a massive tipping point for this trade settlement system or worse, a global rout  of corporations (capitalism), nations, the energy complex, financial systems, gold, currencies and the like.   Of course, that has been a long-time theme on here.  Right now the status quo appears  very ignorant to the consequences of what is happening.  Enlightenment is a painful and invasive process.

I have written on here for the better part of a decade that the dollar was putting in a major low.  Over that time I have mocked supermodels (demanding payments in euros right before the euro crashed) , financial “experts” and many in between who have in some way or another been screaming about a dollar crash.    Being a dollar bull for the last decade has been a very lonely position.   I wrote numerous times over the years that the dollar would eventually rise violently.  The dollar is now at ten year highs.  And, the chart of the Russian ruble against the U.S. dollar above is a telling picture.   If you flip the chart upside down, the dollar is rising violently.   The Chinese yuan is going to experience the same fate without some massive event to stop it.  I don’t know what that could be since the yuan’s fate was sealed long ago but I remain open to that which I might have missed.   But the yuan is even more of a worthless currency than the ruble.   Don’t kid yourself with the “experts” who have also been babbling that the yuan is the new reserve currency.   Or that the yuan backed by gold can take down the dollar.   They have no idea what they are talking about.  I’ll eventually get to that and show you how ludicrous that belief system is.  China’s economy is the biggest mess the world has ever seen.  The communists are doing everything they can to stop that mess from being exposed and metastasizing.   There is literally nothing the communist central planners can do but make the ultimate crisis larger.   Ain’t no one with half a brain that wants to own yuan today let alone as more and more of reality exposes itself.  Even the Chinese aristocracy is running out of yuan at a feverish pace to leave behind the massive fraud they have created.    What do you think is going to happen when China’s economy experiences its “oil” event as Russia is?   The foreign exchange market is going to demand not just six yuan for every dollar as is the case today but twenty or thirty or fifty or more yuan when the shit hits the fan.   There could even be the possibility that no one wants to own yuan no matter what the exchange rate.  That is, unless China turns over its gold to foreign exchange markets as a payment for the massive risk of owning any yuan.

How many of those brilliant, credentialed experts told us over the years the dollar was going to collapse?  The best education money could buy.  Financial wizards and economic gurus.  Even some former U.S. Treasury officials made that claim.  Yawn.  And here is this hick blogging in his underwear once again proving the ignorance of those who control the microphone.  That includes the “educated” faux intellectuals in the world.   We don’t live in a merit-driven society.  We live in a society where ignorance rules.  Which, by the way, is the reason it is collapsing.   Because ignorance has subverted truth for a long, long time.   Both merit and truth are suppressed by the ignorance that controls the world economy and state institutions.   Merit and truth are a threat to bureaucracy and the self-appointed authority that seeks to control it.  And seeks to control humanity in the process.  When the level of that ignorance and associated incompetence of state actors reveals itself, it will be unlike anything humanity has ever witnessed. 

Monday the ruble was down a staggering 13%.    In one day.  So, after hours Russia raised interest rates to 17% in an attempt to stop the slide.  Paying 17% in a year isn’t going to offset a 13% currency decline in a single day.    It would take about a 15,000% interest rate hike to stop that decline.    Alternatively, Russia could buy rubles and sell foreign currencies to prop up their currency, but that would lead to an even greater collapse as they burned through their foreign currency reserves.   At that point Russia will have to intentionally collapse its currency through devaluation or default.   Just like 1998.   I wrote these exact words years ago as it pertains to Russia, China and the BRICs.  This isn’t another Black Swan.  All of this was easily predictable.   I know because it was predicted on here by a grunt.  

The 2008 collapse, the oil collapse and the ruble collapse were all predicted on this blog.  All long before they happened.  These are not Black Swans.   They are easily predictable.  The problem is we have ignorance that rules our society and we have become entranced by their babbling bullshit as credentialed experts with long titles, endless certifications and long-winded educational accomplishments.  All worthless because they all serve control systems that subvert truth.   The Russian central bank just said they never could have imagined what is happening today.   As Ace Ventura eloquently noted, “Alrighty then!”.   I rest my case.  We would be in better hands with Ace at the helm.

Let me just highlight a handful of long-time themes on here that are revealing themselves with this Russian crisis.  Most of these themes have been in play for a long, long time on here. 

  1. BRICs nations are going to experience massive busts
  2. The biggest crises on the back end of this mess will be outside of the US
  3. The dollar will rise violently
  4. Oil will collapse.  Possibly to $10
  5. China and Russia will eventually become net sellers of gold as their currencies implode (being reported today)
  6. Gold will collapse
  7. We are going to experience a global trade settlement crisis (This isn’t it.  Although it is the start of it.)
  8. Central banking may be in its final throws before its final collapse
  9. Corporate capitalism may be in its final throws
  10. Globalization is toast
  11. States around the world could collapse and the concept of the state could be under substantial threat of extinction

Very few people actually understand what is going on.  I can appreciate why the average person doesn’t understand.   It has nothing to do with intelligence.  They are too busy trying to stay alive or they have been kept ignorant by our masters.   Ignorant is not a sign of intelligence.  We are all ignorant to some degree.   Which is the only way state actors can maintain their authoritarian control.  I’ll tell you in excruciating detail at some point just about everything I have written and how I was able to anticipate all of this.   It’s not rocket science but I clearly didn’t listen to the blathering idiots on Wall Street or in Washington.  But for now it’s simply important to realize this global system of rot is unwinding.    That rot is in Russia, China, Egypt, Saudi Arabia, Europe, Canada, the U.S., Japan and on and on and on. 

The question remains is what is Russia going to do now?   Are they going to eventually witness 50-100% inflation?  An economy in complete collapse?   Are they going to sit back and watch their government once again collapse?   And Putin collapse with it?   Or are they going to force a crisis by employing their gold reserves or some other substantial response?   Putin the strong man has so far had a very weak response.   Russia’s central bank just announced their plan of attack to stop this crisis and it is nothing short of a failure.  I know what Russia must do to stabilize their financial system and their economy but will they actually do it?  And, if so, what methods will they employ.  The outcome is in doubt only because the steps necessary to stabilize their currency and their financial system will mean state actors must admit to their fraud, give up control and deal with the consequences.   What do you think the chances of that happening are?  Yeah, that’s right.

So, in lieu of that, what we can expect are measures involving state violence.  The only question remains if that violence will be directed outward, inward on its citizens or both. 

posted by TimingLogic at 1:53 PM