by Darryl R Schoon, Market Oracle:

When aggregate demand contracts, debts default, credit tightens, the velocity of money plunges, deflation ensues and capital, i.e. circulating credit and debt, is destroyed. In the extreme state of hyper-deflation, central bankers try to offset fatally accelerating capital destruction by creating even more money to replace that which is being destroyed.

The United States printed more money in June than in the first two centuries after its founding.

Cointelegraph, July 31,2020

Velocity of M2 Money Stock 1960-2020

US banks are ‘swimming in money’ as deposits increase by $2 trillion amid the coronavirus. The wall of money flowing into banks has no precedent in history: In April, alone, deposits grew by $865 billion, more than the previous record for an entire year.

CNBC, June 21, 2020

TODAY’S RATE OF CAPITAL DESTRUCTION IS REFLECTED

IN THE UNPRECEDENTED GROWTH OF THE MONEY SUPPLY

The money supply, M3 (M2 monetary aggregates + institutional money funds and large time deposits), ascended vertically in 2020 (see below) when global economies suddenly contracted; forcing bankers to create unprecedented amounts of money to replace previously-created money now disappearing into deflation’s exponentially expanding monetary maw

Capital destruction unleashed after the 2008 financial crisis absorbed tens of trillions of dollars created by central bankers in the decade between 2009 and 2019, negating concerted central bank efforts to artificially create growth through money printing.

Zero interest rates and QE gave central bankers a temporary reprieve to solve an insolvable problem. In 2020, COVID-19 rendered their desperate efforts futile. More vulnerable to COVID-19 than the elderly with underlying health conditions, COVID-19’s global economic contraction fatally impaired capitalism’s ability to pay the interest due on mountains of unpayable debt compounding daily.

Today’s hyperbolic increase in the money supply may not end in a hyperinflationary blowoff as previous bouts of monetary excess have done. Because of today’s extreme hyper-deflation, capital destruction may absorb all the money central bankers print without inflationary consequences; and, if not, hyperinflation is inevitable.

CAPITAL DESTRUCTION’S FIRST PHASE

DEFLATION (2009-2019)

CAPITAL DESTRUCTION’S FINAL PHASE

HYPER-DEFLATION (2020–2030)

(reposted with the permission of Sandeep Jaitly)

GOLD & SILVER

In August 2020, gold and silver are rising even as central bankers hope to slow their ascent. Whether gold and silver will continue to ascend or be forced lower as in 2011 when central bankers flooded markets with gold bullion offered at negative interest rates remains to be seen.

What is certain, however, is that COVID-19 has backed central bankers into a monetary corner with no exit. Central bankers are now in retreat. Previous concerns about economic growth are now subrogated to the desperate desire to survive along with the capital markets that have allowed them to obscenely profit from the enterprise of others for 325 years.

Fiat paper money first appeared in Szechwan, China in 1024. Its thousand-year anniversary, i.e. 2024, is four years away. Paper money’s Happy Anniversary song, however, may be a funeral dirge. The central bank substitution of real money for debt-based paper coupons is about to end in dramatic fashion.

GOLD AND SILVER’S FINAL ASCENT WILL BE ACCOMPANIED BY

THE CATASTROPHIC COLLAPSE OF DEBT-BASED ECONOMIES AND CURRENCIES

A BETTER WORLD WILL FOLLOW

THREE PREDICTIONS ABOUT THE FUTURE, i.e. NOW

1. In 1981, in “Critical Path”, Buckminster Fuller predicted humanity was entering a crisis that would end in the collapse of nation-states, economies, e.g. communism and capitalism, and religious institutions. The Universally-intended crisis will transform humanity from a competitive, warring, state of scarcity into an interdependent, interharmonious, cooperative whole with a higher standard of living for all.

1. In 2004, COVID-19’s appearance was predicted by Sylvia Browne, the psychic, in her book, “Prophecy: What the Future Holds for You:By 2020 we’ll see more people than ever wearing surgical masks and rubber globes in public, inspired by an outbreak of a severe pneumonia-lie illness that attacks both the lungs and the bronchial tubes and is ruthlessly resistant to treatment. This illness will be particularly baffling in that, after causing a winter of absolute panic, it will seem to vanish completely until ten years later, making both is source and its cure much more mysterious.

In End of Days, Predictions and Prophecies about the End of the World(2008)Sylvia Browne wrote: … Sometime between 2008 and 2020, I see a sitting president dying in office of a heart attack. The vice president who assumes the presidency will stun the world by announcing his intention to declare war on North Korea in light of his accurate belief that they actually are in possession of weapons of mass destruction. His efforts to rally congressional and international support for this declaration of war will be resoundingly unsuccessful and the source of enormous alarm, and he will be assassinated before his term ends.

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