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How to survive in chaos and disorder?

Block unicorn

One of the scariest works of art is Bruegel's "Triumph of Death" from 1562, which depicts the end of life on Earth.

I sincerely hope this isn't how the world will really look in the next year or two, but metaphorically speaking, it's not so unlikely that this chaotic description could strike us all.

How to survive in chaos and disorder?

Financial, economic and moral disaster, 99.5% or more of the population will suddenly appear like a bolt of lightning in a clear blue sky.

For most people, events about to happen are like the definition of the word CHAOS: "a state of complete CHAOS and disorder."

Chaos 1: COVID
Speaking of chaos, like the Black Death that inspired Bruegel's paintings, the world is now facing a global pandemic. But instead of the nearly 50 per cent of the global population who died in the mid-1300s, we are looking today at the total number of deaths caused by the current pandemic, which represents 0.06 per cent of the world's population! Even this figure may be overestimated due to the classification rules applied.

For this paltry percentage, the world is now paralysed for the third year in a row. A blockade and quarantine, mandatory vaccine with WuNaChen boosters, covid passport, close school, office and leisure bleeding of major industries, airlines such as bankruptcy, shortage of Labour, components, products and closed the border, and few people dare to do so and can across national boundaries, more than in a police state bureaucracy, paperwork, and testing. Meanwhile, money printing and credit creation have grown exponentially.

Politicians apparently blame scientists for all the rules imposed on the people. Interestingly, there are nearly 200 countries in the world, and each has a different set of rules for dealing with the Novel Coronavirus. If all these rules were based on science, you'd think all 200 countries would have the same rules.

Or it may be that many observers think politicians exploit the trend for their own profit. Or is it more likely that neither scientists nor politicians know how to deal with a disease that rarely kills more people than normal?

In Sweden, for example, there are no lockdowns, no quarantines, no store closures, no mask requirements, and industry is functioning normally. The number of COVID-19 cases and deaths is in the lower range of the European average. Well -- that's about it for all these punitive rules in most countries.

How to survive in chaos and disorder?

We were told the vaccine would fix the problem, but the two injections didn't go as far as we had promised. So now everyone needs a booster every few months. How do we know the true truth when big Pharma is both judge and jury, and has benefited tens of billions of dollars from their own advice?

For example, I have a 19-year-old granddaughter who was vaccinated and she contracted COVID-19 in August. Now she has contracted novel Coronavirus for the second time, fortunately a common cold. The obvious solution for governments/scientists is to give more vaccines at more frequent intervals. Still no one has properly tested the long-term effects of vaccines on our bodies, just hasn't had time to do so! ?

The consequences of these changing rules and closures will clearly have devastating effects on the already fragile world economy and financial system.

Mess # 2: Global debt
So if scientists and governments don't know how to deal with COVID-19, we can at least assume that central bankers and governments have the economy and financial system under control.

How wrong can we be? Since the Federal Reserve was founded in 1913, central banks and commercial bankers have successfully run the financial system for their own benefit. But what really gave them carte Blanche to print unlimited amounts of money came in August 1971, when Nixon closed the gold window. It was then that President Thomas Jefferson's cynical view of bankers became a reality.

How to survive in chaos and disorder?

How prescient was that statement. We must remember that the Fed is a private bank that has complete control of the US financial system. As long as the dollar remains the world's reserve currency, the Fed still controls major parts of the global financial system.

Jefferson was also right about inflation and deflation. The current financial system is entering an inflationary phase that could lead to hyperinflation, as I have discussed many times in my articles.

But before this financial system ends, completely worthless debt must be destroyed by a deflationary implosion, not just debt, but frothy assets financed by printing money created out of thin air.

So a deflationary depression could well be the end of yet another failed experiment in the legal money system that was doomed to fail on the day it was founded on Jekyll Island 111 years ago, something that Jefferson of course told us would happen more than 200 years ago.

If history has taught us anything, it's that no one learns from history and everyone thinks today is different because we are here.

P read c change, more this is the me me something -- the more it changes, the more it stays the same.

So back to Bruegel. The collapse of the financial system and the collapse of the global economy will clearly have a major impact on life on earth.

We must remember that there has never been a global debt crisis of this magnitude in history. Debt bubbles in Europe, North and South America, Asia, Africa and Oceania never reached the levels we are experiencing now.

Look at the amount of debt created since 1971.

How to survive in chaos and disorder?

It took thousands of years for global debt to reach $1.5 trillion in 1971. Twenty-nine years later the debt had risen 66-fold to $100 trillion, and since then it has quadrupled to $300 trillion.

Thus, when the gold window closed in 1971, bankers and governments were free to create unlimited amounts of money between them.

Oh, my God, they did it! Global debt has increased 200 times since Nixon took away the gold backing of the dollar and all other currencies.

I will comment on the $3 trillion debt in 2030 later in this article. The final phase of the monetary era began with the great financial crisis of 2006. The trillions of dollars printed, lent and guaranteed managed to patch up Humpty Dumpty for the time being.

But it was clear to me and some other observers that the patch wouldn't last long. As a result, the financial system was under great stress as early as September 2019, with central banks panicking and trying to rescue the failed banking system with a flood of liquidity. Conveniently for banks, since the onset of COVID-19 a few weeks later, they have had an excuse to print money.

Usually governments need to go to war to have an excuse to print money. But epidemics produced in the laboratory are much more effective. The world is now in completely uncharted and very unstable waters. A ship in such danger only needs a minor storm to suffer irreparable damage.

No one can predict what will happen because we have nothing to compare. But it is quite possible that this creature created by bankers and governments (from Jekyll Island) will meet a terrible fate - one that only future historians can tell the world.

Mess # 3: Derivatives
Global derivatives reported by the Bank for International Settlements in Basel (BIS) were $1.4 trillion in the mid-2000s. By the end of the 2000s, the BIS conveniently reduced this figure to about $600tn through net positions.

Banks such as Deutsche Bank or jpmorgan Chase report a total of $40-50 trillion in derivatives outstanding. But all the banks net reduced the total amount of derivatives to negligible levels, believing that these low and totally misleading amounts were their true exposure.

Well, bankers can fool some people sometimes, but in the end we know who the real fools are! The problem with netting is that when the counterparty fails, total risk remains total risk.

Derivatives have been the most incredible money-making tool for banks and other financial entities. Today, there are so many opaque ways derivatives can be created and hidden in official reports that no one knows the actual amount outstanding, but it can easily amount to trillions of dollars.

Keep in mind that almost every financial instrument created today contains derivatives, whether ETF stocks or bond funds, interest rate swaps, foreign exchange swaps, mortgages, etc. The list is endless.

Derivatives work well in regulated systems when there is persistent demand. But when the music stops and the liquidity dries up, we will know the actual amount outstanding.

One of my very good contacts was an excellent explanation of systemic risk, and he created these inverted pyramids where the current financial system sits at the bottom, on a little gold, and at the top, on a lot of debt. On top of that, we see the BIS report of $600tn of known derivatives, plus potentially trillions of dollars of opaque financial systems.

No one knows the exact amount, but it could easily reach $2 trillion or more.

How to survive in chaos and disorder?

Chaos 4: Time bomb
So if we look five to 10 years ahead and map out what might happen to the financial system, the risks for the world are dire.

Global debt will surely rise from 300 tonnes to at least 500 tonnes. It's really a huge underestimate. We add to that the world's unfunded liabilities (pensions, health insurance, etc.), which could easily reach $500 trillion.

Finally, we added $2 trillion in derivatives -- too conservative, perhaps. When the counterparty fails, the central bank will need to print all the money to prevent the bank from failing.

So if my assumptions are correct, global debt will grow from $300 trillion to $3 trillion in the next five to 10 years.

But I could be wrong in so many ways, like it won't take 10 years. We know from history that hyperinflation moves very quickly. Moreover, most estimates of debt and derivatives are probably too low.

Still, let's assume that the world now faces a $3 trillion time bomb, a very scary prospect indeed.

How to survive in chaos and disorder?

Warren Buffett knew he was right when he called derivatives a mass disruption in 2002. Sadly, we will soon see evidence of this.

Since all monetary systems in history have come to an end, we must assume that the biggest global bubble in history will also come to an end.

Since this sick system touches every corner of our lives and leads to a decadent world in which moral and ethical values have all but disappeared, the world needs to be cleansed in the form of forest fires so that new shoots can start afresh.

Prepare and achieve survival victory
As I pointed out in this article, no one knows for sure how things will play out. But what we do know is that the stakes may be higher than at any time in history. So prudence tells us to get rid of frothy assets such as stocks, bonds and speculative assets. Once the fall begins, the real value of these assets could fall by 90% or more, which means for gold.

Most stock investors are likely to buy into a falling market without realising that they will go all the way down to the bottom. This time, the market won't recover for years or even decades.

In addition to a normal mortgage on residential property, getting rid of debt is also important. Own physical gold and some silver (which is more volatile). This will be your insurance against a rotten financial system.

We have owned and recommended physical gold for 20 years and we have never worried about the price. History tells us that governments and central banks are bound to destroy the value of money.

But for those who look at gold, I think the correction is over. It's always possible to end up down $50- $100. But it won't make a difference, as the next big rise will soon reach even higher levels.

Finally, we will go through difficult times in the world. So it's very important to help family and friends.

It is everyone's responsibility to resist the triumph of death and achieve the triumph of survival -- both financially and spiritually -- for everyone we can help.

Remember that many of the good things in life are free -- friendships, music, books, nature and many hobbies.

Although we are entering turbulent times, I wish all of our readers a merry Christmas, happy holidays, and a healthy and harmonious 2022.

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