The Omega Variant — Central Bank Money Printing

Bitcoin [BTC] will be legal tender in El Salvador if the president of the small Central American country gets his way. He probably will. News reports say he — Nayib Bukele — and his populist political party are in control of the legislature. What the man wants, the man gets.

But what is he getting? Few living, breathing, thinking human beings would dispute the notion that central banks are institutions of mass destruction. Worldwide, they’re conducting a monetary experiment that’s lowering your quality of life and increasing your cost of living at the same time. That’s what unsound money and inflation does.

So yes. Central banks should be abolished. All they’ve really succeeded at doing since 2008 is propping up heavily leveraged financial firms, protecting them from the consequences of their own stupid and reckless lending and investing decisions. End the Fed. End the RBA. End all of it.

Will bitcoin being legal tender make things any better? It depends. If bitcoin is ‘normalised’ by governments, it won’t be a monetary revolution. It will be absorbed, partly as a reserve asset in the banking system and partly as a medium of exchange in the real economy. It won’t exist as an escape pod from a corrupt, debt-based financial system. It will be window dressing.

Revolutions are not made of window dressing. They have rich, powerful, entrenched incumbents who fight tooth and nail (with the police, with secret police and surveillance, and with fear) to keep themselves in money and power. This is why you’re hearing so much talk about central bank digital currencies. They want to control whatever new form money takes.

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If I understand Bitcoin correctly — and there are others at Port Phillip who understand it a lot better than me — it doesn’t need the support of billionaires or governments to be successful. That’s the whole point. The idea itself is strong enough. It’s ordinary people that need to see it, adopt it, and believe in it. Not governments.

But let me come back to one of the tools of the state to control you: fear. The UK government is considering moving back ‘Freedom Day’ from 21 June to some point in July. It’s come to that now, where people have to beg for their freedom back and be told when they’re allowed to be free again. Pro tip: it’s not a God-given or constitutional right if you have to ask permission to exercise it.

The reason Freedom Day may be delayed is the ‘Delta variant’ of COVID-19. The World Health Organisation has begun using letters of the Greek alphabet to denote which strain of the COVID-19 virus is the most prevalent or dangerous in given area. This is to remove the stigma of attaching a virus to a place (ie: the Wuhan virus, the UK variant, the South Africa variant, the Indian variant etc).

Lovers of the alphabet will be alarmed to recall that there are 24 letters in the Greek alphabet. If we’re only on the fourth — alpha, beta, gamma, delta — then this pandemic may never end. And perhaps, at some level, that’s an idea. Extend the emergency indefinitely. Extend the control of people indefinitely (permanently). Extend the lawless rule of medical experts with models not grounded in reality.

Lovers of cinema will note this story was told on screen in 1971. Charlton Heston starred in The Omega Man. He’s one of the last survivors of a global pandemic. The story is set in a post-apocalyptic world where he’s looking for a cure. Omega is, of course, the last letter in the Greek alphabet.

The movie was based on I am Legend, a 1954 novel by American writer Richard Matheson. Lovers of the American actor and rap star Will Smith will recognise the name from the 2007 film of the same name. Which brings us back to financial markets.

2007 was roughly the year when the financial crisis turned into what is now a crisis of our entire civilisation. The bailing out of Wall Street was bad enough. Fraud that had flourished wasn’t extinguished. But then the introduction of quantitative easing — money printing for the ultra-wealthy and financial asset owners — took things to a whole new moral low.

The result is what we have now all over the Western world — soaring financial asset bubbles in real estate and stocks, coupled with gross income inequality and vast wealth disparities between those closest to the source of the bogus money explosion and those in the ‘back row’ of our affluent society. It’s a mess.

And on top of this steaming pile of central bank excrement, we have the worst elements of our society gravitating toward politics. Along comes a pandemic which allows their psychopathic and sociopathic instincts for control and manipulation to flourish. If we keep putting up with this, there won’t be any freedom for ‘Freedom Day’ to celebrate.

What happens next? Well, we’ll get a disastrous, world-destroying variant that will finish off the Anthropocene epoch decisively. Or the fear agenda will be exposed as a weapon of mass psychological manipulation. And there will be a reckoning.

Another strain of financial crisis is inevitable. The soaring levels of government debt and central bank money printing — not to mention private sector leverage — virtually guarantee it. We’re closer to the end than the beginning. But the beginning of what? More on that next week.

Until then,

Dan Denning Signature

Dan Denning,
Editor, The Rum Rebellion

The Bonner-Denning Letter is co-authored by Port Phillip Publishing founder Dan Denning and legendary investment writer and publisher Bill Bonner. It connects the dots between markets, politics, and history as one of the only macroeconomic, ‘top-down’ newsletters in Australia. For a big picture perspective on the past, the present, and your investment future, click here for details on how to subscribe.

Dan Denning is the co-author of The Bonner-Denning Letter.

Dan was a founder of Port Phillip Publishing back in 2005, which quickly became the leading publisher of its kind for independent financial research and insights. In 2014 he left to head up Southbank Investment Research in the UK. Dan is also the author of the 2005 book, The Bull Hunter. Today, he’s based in his home state of Colorado. Each Monday in The Rum Rebellion you’ll get Dan’s unique contrarian thinking to provide insights you won’t find anywhere else.

Dan Denning’s belief in free markets, sound money, personal liberty, and small government have underpinned everything he’s done during his 23 years in the financial publishing industry.

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