This is a public service announcement. All those ‘new freedoms’ you have now that lockdowns are over?
They aren’t new. You had them before. They are your natural rights as a human being.
All that’s happened in the last 18 months is that certain fearmongering sociopaths in government and the media have peddled the like that you get your freedoms from them, and that they can be taken away as punishment or given back as a reward for you submission and compliance.
It’s a big lie. Don’t think the lying is over. Already, devil Dan Andrews is hinting that unless you get your booster shot in Victoria, your six months of freedom (parole with conditions) will be over. I’ll come back to that in a moment.
But speaking of big lies, did you see the cryptic tweet from Twitter founder and CEO Jack Dorsey over the weekend? Dorsey tweeted that ‘Hyperinflation is going to change everything. It’s happening.’
That was it. No explanation. No elaboration. No clarification. What does it mean?
Dorsey knows that investors, savers, and retirees have been told a big lie. The big lie is that money printing, deficit spending, and bigger debts produce wealth. They don’t. They produce bigger debts and higher prices. Hence the warning about hyperinflation.
Is this how it begins, the normalising of outrageous prices, shortages, and scarcity? Most people in places like Australia and the US don’t give a second thought to the idea of hyperinflation. Most of them, to be honest, have never given it a single thought. Why should they? Why should you?
Walk into a grocery store and you’ll find the shelves always full, with a huge variety of fresh produce, meats, baked goods, and more. There’s always fuel for your car, although the price can spike with the seasons and because of events in the international oil markets. Our economy and our culture create the impression of perpetual abundance.
And it’s been true! Until now. Now, prices for meat are up. Signs are posted in stores that some items may be unavailable. Why? Maybe it’s the ‘supply chain’ shock. Maybe it’s producers unwilling to sell their goods when prices are rising at greater than 5% (consumer price inflation was 5.3% in the US in August).
I flew to Baltimore, Maryland, last week to talk things over with Bill Bonner, my co-author at The Bonner-Denning Letter and Tom Dyson, who works with Bill and me to turn our big-picture forecasts into trading opportunities. It was the first time since the outbreak of the pandemic in early 2020 that we were able to be in the same place at the same time.
We’ve been talking about inflation for quite some time now. And in fact, when Tom, Vern Gowdie, and I spoke in April of 2020, we concluded that the government response to the pandemic — massive lockdowns first and massive money printing second — would inevitably be inflationary. We were right, with a few twists.
The first inflation came in financial asset prices. And that was after the huge crash in global stocks — a crash which ‘priced in’ the slowdown in trade, travel, and commerce. Since then, asset prices (especially for assets priced in US dollars) have been on a tear. This was inflation. And it was fuelled by the loose monetary policy of the Federal Reserve (pumping US$120 billion a month into bond markets to keep interest rates down).
But now, 18 months into this ‘long emergency,’ the inflation is bleeding out of stocks and into the real world. Students of monetary history know how the story goes from here. Prices for rent, food, and fuel go up. The general public — even those who don’t own stocks and bonds — start to feel the pinch.
The government reacts by imposing wage and price controls. This results in even MORE scarcity. It happened in Weimar Germany in the 1920s, and more recently in places like Argentina, Zimbabwe, and Venezuela. Producers of farm goods go on strike. Shelves empty. Prices rise faster.
This sort of monetary chaos doesn’t happen in the ‘developed’ world of Australia and the US. Yes, you get soaring house prices. But this is ‘good’ inflation. It makes people wealthier by driving up the value of their real estate and retirement portfolios.
It’s almost impossible for most mainstream economists and media personalities to imagine prices for food, fuel, and imported goods spiraling out of control. In the US, the dollar is the world’s reserve currency. For hyperinflation to really take hold in the US, foreign investors would have to dump the dollar. There’s no way that’s going to happen, right?
We’ll see. Australia will be unsettled by any chaos in the US. A US dollar crisis can’t happen without there being a debt crisis. There’s nearly US$300 trillion in global debt, according to the Institute of International Finance. A debt crisis that became a dollar crisis would include crashing financial asset prices, a major ‘readjustment’ in the dollar’s value versus other currencies (and real assets), much higher interest rates, and soaring prices.
Is that what Jack Dorsey means? Is he looking at higher prices for rent, beef, and energy and seeing the leading edge of a process that’s now all but inevitable? A process that results in a financial crash, a currency crash, and a great reset of the world’s money system?
Those are some of the questions Bill, Tom, and I discussed last week. We recorded a round table with our colleague Chris Lowe in Portugal to address these important issues. That conversation will be transcribed and made available next week to readers of The Bonner-Denning Letter.
In the meantime, the big lie continues to pour out of the mouths of certain Australian politicians. The idea that your freedom depends on someone else’s permission is a perversion. It’s a perversion of the traditional relationship between you and your government. And a perversion of the relationship between language and truth.
There is no such thing as ‘fully-vaccinated freedoms’. The freedoms of speech, of the press, of the right of assembly, of religion, and to petition your government for grievances aren’t conditional on your vaccination status.
If Australians accept this moral and rhetorical sleight of hand, then you won’t have any freedom at all. What you’re allowed to do, indeed your very participation in civil society, will depend on submitting and obeying the public health order of the day or suffering the consequences for your refusal.
Don’t let it happen. Ever again. Enough is enough.
Editor, The Rum Rebellion
PS: The Bonner-Denning Letter is co-authored by Fat Tail Investment Research 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.