How Elites Crush your Financial Freedom

The war on cash has come to Australia. This may be a new threat to our shores, but it’s been going on for years overseas.

The European Central Bank (ECB) recently announcing they wouldn’t continue to produce the 500 euro note beyond 2018.

Then India decided to stop producing its two largest notes, and replace them with another two at a moment’s notice. The government pretended it was to eliminate black market money. Really, it was to force one third of India’s population into the banking system — and out of cash, where they have more control over their own wealth.

And now Australians finds themselves in the ‘war on cash’ debate. Recently there was a deluge of thought pieces about how large Australian currency dominations are only used for criminal purposes.

That’s not true at all. But it makes a good excuse.

I have another excerpt from Jim Rickards new book, The Road to Ruin, for you today. He starts of by explaining that the ice-nine plan, explained in yesterday’s Money Morning, will only work if we all only use digital money. To do that, the powerful people must convince us that cash — not money — is the root of all evil deeds.

But before you let yourself be herded into your digital pen for the slaughter, Jim talks about perhaps the most important concept in his book, ‘The Shock Doctrine’.

The Shock Doctrine

Here, Jim explains how every market crash and natural disaster is another opportunity for the elites to complete their wish list. Each event enables the elites to introduce a new law. One that limits your freedom and coerces you into limited financial options. The idea is to take advantage of your shock. That way they can get laws past people without much fuss.

The war on cash and the rush to negative interest rates are advancing in lockstep, two sides of the same coin.

Before cattle can be led to the slaughter, they are first herded into pens that can be easily controlled. The same is true for savers. To freeze cash and impose negative interest rates, savers are being herded into digital accounts at a small number of megabanks.

Depositor savings are now concentrated where regulators can apply ice-nine solutions with a few phone calls. Savers are being prepared for the slaughter.

The ice-nine plan does not stop with savers. Ice-nine also applies to the banks themselves. On 10 November 2014, the Financial Stability Board operating under the auspices of the G20 issued proposals to require the twenty largest banks to issue debt that could be contractually converted to equity in the event of financial distress. Such debt is automatic ice-nine bail-in for bondholders that requires no additional action by the regulators.

If regulators apply ice-nine to bank deposits, there will be a run on money market funds. If ice-nine is applied to money market funds also, the run will move to bond markets. If any market is left outside the ice-nine net, it will immediately become the object of distress selling when other markets are frozen.

In order for the elite ice-nine plan to work, it must be applied to everything.

The elite agenda is settled. Elites now await a new shock.

The Shock Doctrine

Naomi Klein’s 2007 book, The Shock Doctrine, popularised a technique elites use to advance hidden agendas. Elites formulate plans for the world order they wish to see. They wait for an exogenous shock, a natural disaster or financial crisis, then use fear created by shock to advance their vision. New policy is presented to mitigate the fear. The policy is a way to advance the plan for world order.

The idea is simple, yet applying shock doctrine involves decades of persistent effort. Shocks come randomly, the elite plan never goes away.

Klein revealed this process from an outsider’s perspective. Still, the ultimate insider, President Obama’s first chief of staff, Rahm Emanuel, acknowledged the shock doctrine when he said, ‘You never want a serious crisis to go to waste’. This was in reaction to the 2008 financial panic.

President Obama and Emanuel used the 2008 crisis to push through an US$813 billion ‘stimulus’ spending package signed into law on 17 February 2009. This was a textbook case of shock doctrine. The program provided no stimulus; the recovery since 2009 is the weakest in US history. The spending program did provide a grab bag of goodies for favoured constituents including teachers, unions and government workers. These constituents had waited eight years, the length of the Bush administration, for their handouts. When it comes to the shock doctrine, patience pays.

Another highly consequential example of the shock doctrine was the enactment of the USA Patriot Act on 26 October 2001, in the aftermath of the 9/11 attacks. The Patriot Act contained needed improvements in information sharing among the FBI, CIA and grand juries. Some surveillance standard easing was urgent at the time.

Still, the Patriot Act was also the codification of a surveillance state wish list percolating below the policy surface for some time. Patriot Act provisions advanced by the US Treasury to block bank mergers and require assets forfeitures had less to do with Al Qaeda and more to with the Treasury’s ongoing war on cash. These provisions were taken down from the shelf where Treasury keeps it wish list, and added to the expanded powers under the act. The Patriot Act is now an overly broad and permanent menace used for state surveillance of political enemies.

Under the shock doctrine, all Treasury needed was a shock, which 9/11 provided.

The shock doctrine is a ratchet; it turns in one direction, and then locks in place. It can turn again in the same direction, but can never be reversed. Policies enacted under the shock doctrine remain long after the emergency that enabled them. The trend is persistently toward more state power, more taxation, and less liberty.

Elites are aware that their views are not widely accepted in democratic societies. Elites realise their programs must be implemented in small stages over decades to avoid backlash. Shock doctrine is punctuation to otherwise anti-elite sentiment. When shock strikes, the elites move immediately to implement a new stage of their program. The critical task is to act quickly before the shock fades.

The ratchet ensures that elite gains are not soon surrendered. The process goes into remission until the next shock.

The ice-nine plan is already in place. This isn’t just some theory Jim came up with. It is already beginning to unfold. When the next financial crisis comes, the ice-nine plan will already be in place, ready to be put to use.

To find out how you can prevent your investments being caught up in the ice-nine plan, click here.

Shae Russell

Since starting out in the financial markets over a decade ago, Shae has extensive experience across various aspects of the industry. Shae cut her teeth in the derivatives industry, teaching clients basic trading techniques with technical analysis.

Joining Fat Tail Investment Research eight years ago, Shae has worked across a number of publications, such as Australian Small-Cap Investigator, Gold Stock Trader and Microcap Trader. She’s spent the past two years however, honing her macro analysis skills alongside Jim Rickards, showing Australians how to invest and profit form global macro trends.

Drawing on her extensive experience, Shae is a contributor to Money Morning, and lead editor of sister-publication Markets & Money, where she looks at broad macro trends developing around the world, combining them with her distaste for central banks and irrational love of all things bullion.

Money Morning Australia