The Lockdown Depression and the Great Currency Pivot

Fixing Broken Money to Fix a Broken World

The War on the World

As you read this, governments around the world have declared war on their own people and economies in the name of fighting a germ. They've dropped the policy equivalent of a reverse neutron bomb: something which destroys the economy while supposedly leaving human beings unharmed. Small business, the middle class, and the value of the currency will be among the casualties, not to mention civil liberties. But what if there were a way to hedge against these dire events that actually becomes even more effective the worse things get?

Well there is such a hedge! And we'll come to it below. But we need to start by taking a look at the extreme, almost unbelievable incompetence of governments in responding to the coronavirus outbreak. This is important because their response to the economic consequences of their own actions is sure to prove every bit as inept and corrupt.

Six Feet Away From Where?

Ever wonder where the idea of "social distancing" originated? Oddly, this euphemism for forced human separation is relatively recent: it first appeared around 2006 during the avian flu pandemic. That pandemic didn't amount to much, but it did prompt the US President, George W. Bush, to read about the 1918 global flu pandemic. Disturbed by what he read, he asked for some experts to submit plans to him about what to do should a real epidemic come along someday.

Two federal government doctors -- Dr. Mecher, a Department of Veterans Affairs physician, and Dr. Hatchett, an oncologist turned White House adviser -- answered the President's call and proposed turning back to an approach called self-isolation, widely employed in the Middle Ages. Neither of these doctors were epidemiologists or had any previous expertise with pandemics. Dr. Mecher was contacted by Robert J. Glass, a senior scientist at Sandia National Laboratories in New Mexico, who built computer models of complex systems. Given that drugs were often useless against viral diseases, and vaccines always take too long to develop, Drs. Hatchett and Mecher were looking for other ways to combat a large-scale contagion. Glass, a medical layman, had some suggestions they liked.

The entire extent of their supporting research consisted of a computer simulation made the year before by Glass's daughter Laura, who was then 14, as a high school science project. Her computer simulation showed how people interact in social situations, such as families, students in schools, co-workers, etc. You can read about this remarkable story in the Albuquerque Journal, here.

Laura's computer model showed that school kids come in contact with about 140 people a day, more than any other group. Based on that finding, in a hypothetical town of 10,000 people, half would become infected during a pandemic if no measures were taken, but only 500 would be infected (or 1/10th as many) if the schools were closed. Laura's father, who was asked to prepare a brief for the Secretary of Homeland Security, actually based his recommendations on his daughter's school project. Mr. Glass had no medical training, much less expertise in immunology or epidemiology. Laura Glass's name appears with her father's on the foundational paper arguing for lockdowns and forced human separation, called Targeted Social Distancing Designs for Pandemic Influenza (2006). Eventually, the CDC (Centers for Disease Control and Prevention) made social distancing the official US government epidemic policy in February, 2007.

Yes, that's correct: a high school science experiment eventually became the law of the land, through a circuitous route propelled not by science but politics. The Bush administration accepted the plan that came up through the Department of Homeland Security over alternative approaches recommended by qualified doctors, simply because the DHS had more cachet within the administration. This is no conspiracy theory; you can read this history for yourself in a recent article in The New York Times. And you'll likely recall that one of the first things almost everybody did was to close all the schools, despite the fact that children were already known to be at very low risk.

The Experts Strike Back

But wait: surely somebody with actual competence in the area of epidemics must have reviewed this proposal before it got adopted? Indeed they did, and they tore it apart!

The late Dr. Donald A. Henderson, who had been the leader of the international effort to eradicate smallpox, completely rejected the whole scheme. He was convinced it made no sense to force schools to close or public gatherings to stop. The measures embraced by Drs. Mecher and Hatchett would "result in significant disruption of the social functioning of communities and result in possibly serious economic problems," Dr. Henderson wrote, responding to their ideas. The answer, he insisted, was to tough it out: Let the pandemic spread, treat people who get sick and work quickly to develop a vaccine to prevent it from coming back.

Together with three professors from John Hopkins University, including an epidemiologist and an infectious disease specialist, Dr. Henderson published a masterful paper in rebuttal, which you can read in full here. Here are a few choice quotes from what the real experts had to say about social distancing strategies:

There are no historical observations or scientific studies that support the confinement by quarantine of groups of possibly infected people for extended periods in order to slow the spread of influenza... It is difficult to identify circumstances in the past half-century when large-scale quarantine has been effectively used in the control of any disease. The negative consequences of large-scale quarantine are so extreme (forced confinement of sick people with the well; complete restriction of movement of large populations; difficulty in getting critical supplies, medicines, and food to people inside the quarantine zone) that this mitigation measure should be eliminated from serious consideration....

Travel restrictions, such as closing airports and screening travelers at borders, have historically been ineffective....

During seasonal influenza epidemics, public events with an expected large attendance have sometimes been cancelled or postponed, the rationale being to decrease the number of contacts with those who might be contagious. There are, however, no certain indications that these actions have had any definitive effect on the severity or duration of an epidemic... Thus, cancelling or postponing large meetings would not be likely to have any significant effect on the development of the epidemic... While local concerns may result in the closure of particular events for logical reasons, a policy directing communitywide closure of public events seems inadvisable.

Quarantine. As experience shows, there is no basis for recommending quarantine either of groups or individuals.

Experience has shown that communities faced with epidemics or other adverse events respond best and with the least anxiety when the normal social functioning of the community is least disrupted.

Wow! And yet, despite the strenuous reasoned objections of these seasoned professionals, the CDC nevertheless adopted social distancing and lockdowns, as recommended by complete non-experts, and without a single serious study being done, as the new official policy for dealing with epidemics.

Are you mad yet? Still think that these people, who turned a manageable epidemic into a catastrophe, can find a way out from the catastrophic consequences of their own irresponsible actions? (Keep reading; we're going to show you a way to do just that for yourself!)

No Talent at This Modeling Agency

As we've just seen, the CDC used a very limited model from a high school science project as the basis for its public policy on epidemics. Incredible as that is, the story of the computer models used at Imperial College, London, is even more amazing. Professor Neil Ferguson (also known as the boffing boffin) headed a team that wrote the computer simulation which scared the UK government, as well as many other governments, into marching off the lockdown cliff like lemmings. It also overestimated projected deaths from the epidemic by more than a factor of 20!

It turns out that the code for their computer model was, in the lingo of the software trade, "sh*tcode." The source was recently posted to Github (after futile efforts by some Microsoft engineers to whip it into shape to make it look more presentable), and the code reviews by software engineers were scathing. Not only was the original version contained in one single 15,000 line source file (highly unprofessional), but it produced random outputs every time it was run using the same inputs. Imperial College dealt with this deficiency by running it multiple times and averaging the results! As if the average of random numbers magically becomes something other than another random number. You can read about this jaw-dropping story here, here, and here. One reviewer sums it up succinctly:

This Ferguson Model is such a joke it is either an outright fraud, or it is the most inept piece of programming I may have ever seen in my life. There is no valid test to warrant any funding of Imperial College for providing ANY forecast based upon this model. -- Martin Armstrong

A Divine Comedy of Errors

So what do we have so far? The world was scared into lockdowns by an incompetent university software simulation, and (at least in the USA) those lockdowns were structured according to the recommendations drawn from a high school computer science project, over the howling objections of qualified doctors. (And of course if you get your news only from mainstream media, you would know little about any of this, because they're not about to tell you!)

Do lockdowns even work? Mounting evidence says no. The former director-general of Israel's Ministry of Health says no. Many other qualified experts say no. This doctor at Stanford University says no. This famous epidemiologist says no. So does this one, who was the architect of Sweden's non-lockdown policy response. A study done by the US investment bank JP Morgan says no. Social distancing turns out to be untested snake oil, not science. Perhaps that’s why 500 doctors just wrote an open letter to President Trump warning that the lockdowns will cause more deaths than the virus.

Who Was That Masked Man?

By the way, masks are of dubious benefit too. A review of the literature in which 17 of the best studies were analyzed, concluded there is no conclusive evidence of their efficacy in controlling virus transmission. Not only do they fail to protect the healthy from getting sick, but they can also create serious health risks to the wearer. Check out this warning by Dr. Russel Blaylock, who was a practicing neurosurgeon for 26 years:

By wearing a mask, the exhaled viruses will not be able to escape and will concentrate in the nasal passages, enter the olfactory nerves and travel into the brain.

So masks, just like lockdowns and social distancing, are unnecessary, useless, and possibly even dangerous. No wonder they have to be made mandatory!

The Ultimate Inversion

The point, now, is to keep you afraid. Why? A famous American writer saw it coming 53 years ago:

[W]e are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission; which is the stage of the darkest periods of human history, the stage of rule by brute force.

-- Ayn Rand, Capitalism, The Unknown Ideal, Appendix, "The Nature of Government," 1967

The ongoing purpose of all this coronavirus tyranny is to bring about this inversion. The authorities have revealed their true nature as out-of-control control freaks, and now must keep terrorizing the public, or else they'd have to admit they were wrong and take responsibility for their actions. Specifically, for the fact that they just made the public, tax-consuming sector effectively declare war on the tax-producing private sector, destroying the livelihoods and eviscerating the civil liberties of millions upon millions of people. Because of this, advanced nations are degenerating from a freer, more energetic society to a society of broken souls dependent on government handouts. And the poorer nations are literally facing mass starvation and death. The pols' only alternative to doubling down is to end up looking like comedienne Gilda Radner's character Emily Litella on SNL back in the 1970s: “Never Mind!” [This video may not be viewable in your location.]

Since what they mainly care about is optics, the political class and its captive media will literally burn down the world before they ever allow that humiliation to happen. However the CDC (which still has a modicum of scientific responsibility left) just decided to do some CYA by producing a report that should be earth-shattering to the narrative of the political class (but don't expect it to get out to the public). It reveals the overall infection fatality rate (IFR) for Covid-19 to be a mere 0.26%! This is less than 8% of the 3.4% IFR estimated by the WHO which helped drive the panic and the lockdowns.

Moreover at least half of the deaths have occurred in nursing homes (53% in the USA, 81% in Canada. A number of state and national governments (including New York and Sweden) completely failed to protect long term care facility residents, in some cases actually mandating that patients who tested positive be relocated back to care homes from hospitals! (In New York this policy was estimated to have contributed to over 5,000 additional deaths.) According to the data in the CDC's updated report, those under age 50 without comorbidities would be statistically more likely to die in a car accident. And schoolchildren would be more likely to get struck by lightning. So why is anything other than nursing homes still locked down, anywhere?

As celebrated trends forecaster Gerald Celente aptly put it in an interview last March:

We have a bunch of psychopaths, sociopaths, pathological liars, freaks, cowards, and fools running a government near you, all around the world.

Slouching Toward Depression

The good news about this pandemic situation is that eventually it will diminish. Deliverance from the coronavirus-induced government tyranny will not come about because politicians have seen the error of their ways, or decided to quit being sniveling neurotics. It will come about because the people are finally waking up, and will simply start ignoring them. But unfortunately the consequences of the lockdowns have already plunged the world into what will likely become known as the Greater Depression. Not to mention the recent protests, riots, and looting in dozens of cities in the US and around the world. Rest assured those are about rebellion, not just one more case of police brutality or minority oppression.

In truth there actually is a way to get out of the path of the storm, and even to profit enormously from it, but before we tell you about it we need to demonstrate why a profound economic collapse, including the simultaneous collapse of national fiat currencies, is already baked in the cake. This is true even if the people in charge were all benevolent geniuses, instead of the hopeless incompetents we know them to be. But of course the response of the political class as they try to clean up their own mess will be no better than their decision-making process that got us here to begin with.

In the United States alone, more than 40 million people have filed for unemployment since the crisis began. That puts the official unemployment rate at over 25%. The last time it was that high was in the depths of the Great Depression, when unemployment peaked at 24.9%. However, unemployment statistics in the 1930s didn't ignore discouraged workers as they do today. So if unemployment was calculated in the same way, today's comparable unemployment rate is actually around 39%! This is already the biggest disaster for the working class in living memory, as more than 40% of those who were earning less than $40,000 a year are now jobless. Not to mention that many who have managed to keep their jobs will now be facing pay cuts in the near future.

The situation for the middle class is no better. Not only have many lost their employment, but many are also business owners, whose businesses have been effectively seized and destroyed via lockdowns for being "non-essential." But every business is essential to its customers, or it wouldn't have any customers to begin with, and so wouldn't exist. (By this standard the only truly "non-essential" business is government, because that's the only business whose customers have to be forced to pay for its services! But of course almost all government offices and jobs have been deemed essential.) Not to mention that every job is essential for the well being of the one who holds it -- and not just for a paycheck, but for a sense of community and self-worth. Handouts can only replace the paycheck.

Also, many members of the middle and upper middle class are landlords who own rental properties. By declaring moratoriums on rent payments and eviction proceedings, governments have essentially declared war on landlords, and therefore on real estate. Real estate and small businesses are the main source of middle class wealth in many countries. A recent survey shows almost half of small business owners in the US say they expect they'll have to shut down for good.

The middle class is the main driver of consumer spending, which fuels about 70% of the economy. A large percentage of them are also 60+, and may become more cautious about things like traveling and eating out going forward. Without their spending, everything else will suffer.

This self-inflicted economic cardiac arrest will severely damage the current wealth and future income of essentially everyone who isn't part of the top 1%. Indeed, governments themselves will get caught in the conflagration as tax receipts plummet and expenditures skyrocket. The parasite is killing the host, and may eventually kill itself as well. The situation is already far beyond stupid.

Oligarchy Always Wins

The response to all of this by government can be summed up in four words: throw money at it. Take a look at this graphic showing what's happened in the United States so far:

As commentator Charles Hugh Smith notes in his accompanying article:

The Federal Reserve has created over $3 trillion out of thin air in a few months and invited all the usual parasites, predators and speculators to the orgy.... Your share of the orgy is a bowl of thin gruel: $1,200. That wasn't distributed out of kindness or generosity; like all federal giveaways, it's real purpose is to give you enough cash to make your loan payments so all the parasites and predators in the Fed's orgy won't experience the terrible suffering caused by debt-serfs defaulting.

Way back in 1911 an author named Robert Michels published a book entitled Political Parties. In it he developed the “Iron Law of Oligarchy.” It says that in any democratic organization, rule by an oligarchy is inevitable. This is because the fundamental asset controlled by the state is the power to coerce. Therefore, any group that can control how this power gets used can profit. Large firms and the billionaires who control them have high benefits from mobilizing, can lobby efficiently, and easily coordinate their efforts. Small firms and consumers generally don't organize because of their high coordination costs for collective action, which would generally be higher than their benefits. Therefore: big guys win, and little guys lose. The inevitable result is a system that's designed to enrich a few and enslave the many. Representative democracy is merely a facade legitimizing the rule of a particular elite.

Sadly, the past 100 years have proven Michels 100% correct.

The Oligarchy's Secret Weapon: Debt-based Money

We're getting very close to the big reveal on the nature of the escape hatch from all of this. But before we arrive we still need to take a look at the nature of national fiat money, how it brought us here, and what's going to happen with it in the near future.

Most people don't understand what money is or how it comes into existence. This isn't because it's too complicated (it isn't), but because it's so counter-intuitive that the mind rebels from understanding it. Here it is: every dollar, euro, yen, pound, peso, etc. in the world was borrowed into existence. That is to say that every dollar you have represents somebody else's liability. Here's how it works.

A borrower goes to a bank, say for a mortgage loan or a credit card line. The bank has them sign a promissory note. In a debt-based monetary system, a signed promise to pay is currency, by definition. The bank deposits the promissory note into an undisclosed demand (checking) account. This checking account is then debited to provide the loan proceeds! The money does not come from the bank, or from any other depositor's account. Effectively, an IOU of the borrower is converted into the IOUs of a private banking cartel. (In the USA, the borrower's promissory note becomes Federal Reserve Note dollars.) The bank pretends this was a loan from itself, and demands interest on it. While this is obviously fraudulent, it's a legal fraud every commercial bank has a regulatory permission slip to practice, known as a banking charter.

When the borrower makes a loan payment, the portion that goes to interest is income to the bank (or whomever ends up owning the note), while the portion that goes to principal extinguishes an equal quantity of created money from circulation. If the borrower defaults, the bank has to take a charge for the unpaid principal against its own capital. But that's seldom a problem for the banks, because if it happens too often, there will undoubtedly be a bailout. This is how profits are privatized and losses are socialized. Bailout isn't a malfunction; it's the name of the game. This system is openly explained in the Federal Reserve's own publications, such as Modern Money Mechanics. You can find this online in PDF form, or listen to the excellent explanation of it given in this video.

Why is all this important? Apart from the fact that debt-based money is the linchpin supporting a system of legalized exploitation, in the context of the Greater Depression the significance is this: that you cannot possibly reflate an economic bubble fueled by expanding debt when you're fresh out of credit-worthy borrowers! With so many looming defaults and bankruptcies and destroyed credit ratings, banks will naturally tighten their lending standards. (Remember while the bank gets interest on a loan it didn't technically make, it does still take a hit if the borrower defaults.)

In this kind of climate, the government becomes forced either to guarantee all consumer loans, or do most of the borrowing itself. This latter practice is commonly referred to as "printing money," where the sovereign sells bonds to its central bank in exchange for newly created money in the bank, which it then distributes to others. Which is why this interesting pronouncement got made the other day:

The Fed has lending powers, not spending powers.

Jerome Powell, Fed Chairman

Powell was also heard to say that "now is not the time to prioritize" concerns about inflation.

Have Fun at the Stag-flation Party

A term was coined back in the1970s to describe a situation where unemployment was high but prices were also rising: stagflation. A repeat of this scenario is now at hand. In the short run we will see cascading defaults throughout the supply chain, massive numbers of foreclosures, a banking crisis with bailouts, and perhaps even falling prices due to a temporary collapse of demand. Certain assets may decline in value as well.

Take vacation real estate for example. Or luxury boats, art, collectibles, vintage cars, and the like. Very few people own these types of assets, really just the top 5-10% of the wealth pyramid. Many of these folks will be losing their businesses, or their high-paying jobs, due to the depression. And since prices are always set at the margin, a narrow market with only a small pool of buyers can crash rapidly if any meaningful percentage of those buyers stop buying, or (worse) are forced to sell to cover losses elsewhere. The high-priced assets owned by the top 10% will be the assets least in demand due to their high cost and potential for enormous losses. This generates a kind of "reverse wealth effect."

Stocks, on the other hand, are being buoyed by all the central bank money printing. Traders (the "financial parasites and predators" Smith mentioned) are using money borrowed at near zero interest to buy up equities, probably in anticipation that the Fed will itself start buying stocks in the near future. (Legally, the Fed can only buy US Treasury bills and bonds, so this would have to be done by making loans to an intermediary firm such as BlackRock, which is already out buying corporate bonds on the Fed's behalf.) That's some small crumb of comfort for the top 10%, anyhow. But at the same time, a financial system unable to let its stock market fall is obviously too fragile to survive. Put another way, the Fed can print money, but not jobs or products. Real wealth is only created by increases in the productivity of labor and capital; everything else is phantom wealth. The stock market is now pure phantom wealth wholly disconnected from reality.

The supporting truss that will ultimately "break" is faith in the currency itself, as prices begin to edge upwards. While bailouts aren't inherently inflationary (because one debt merely replaces another which defaulted), money loaned into the system that actually does go into circulation in the economy is indeed inflationary. This is the case with stimulus payments, unemployment benefits, salaries and pensions for government employees, loans to businesses for payroll, etc. Meanwhile the quantity of goods being produced is actually lower, because all those unemployed people and shuttered businesses are no longer producing any goods or services. Stimulus creates a class of people who are consumers without being producers. But consumption depends on production, just as production depends on consumption. More money chasing a smaller quantity of economic goods always forces prices to rise.

The risk at that point is that the "time preference" of consumers begins to shift. Normally people will defer purchases they don't need right now, especially when times are tough and uncertain. But once they get the idea that their money is steadily losing purchasing power, they begin to think: "I'd better buy everything I might need someday right now, before it costs more tomorrow." At that point the velocity of money leaps up to match the increase in the quantity of money, and we move into the endgame:

Hyperinflationary Depression

The incompetent, knee-jerk response of government to economic downturns has been stimulus, ever since the late 1980s when Fed Chairman Alan Greenspan established the "Greenspan put" following the stock market crash of 1987. Prior to that (like in1980-82), corrections were allowed to happen. So for nearly 30 years now the can has been kicked down the road, and the can is now a 55-gallon drum filled with cement. So when the crash comes, it's going to be the MOAC, the Mother of All Crashes.

As retail prices soar, so will interest rates, since no one will make a loan in the face of high inflation without big interest. That means all the existing bonds with much lower interest rates will crash in price, many to zero. Once central banks have lost control of interest rates, we'll see unlimited money printing in a trousers-soiling panic, and currencies subsequently crashing to their intrinsic value of ZERO.

The world has of course seen many currencies fail over time. In fact about 40 years is the average lifespan for unbacked fiat monies. (Note the USD has been fully unbacked since 1971.) But here's what's different this time: in most past hyperinflations, there was usually some alternate currency to facilitate trade. Weimar Germans in 1923 still had some gold coins salted away. In Russia in the late '90s they simply used dollars, and later euros. In Argentina, Serbia, Zimbabwe, Venezuela, again they used dollars, at least unofficially. But if every country's currency crashes at about the same time, including the US dollar, what will people use?

And that finally brings us to the answer we promised at the start. The escape hatch leads into privately issued, asset-backed monies, by:

Separating Money and State

Centuries ago the western world separated church from state. The state was plainly not qualified to meddle in religious matters, and when it did so it typically utilized religion to further tyrannical objectives (as when Henry VIII made himself head of the Church of England). When the church meddles in affairs of state the results are no better (as in theocracies). The 20th and early 21st centuries have taught the modern world that money is simply too important to the economy to entrust its issuance and regulation to the state. And just like with a theocracy, the rule by an elite monetary priesthood has proven a disaster, for the common people, for freedom, and productive values. Nobel laureate economist Friedrich Hayek wrote a seminal book about separating money and state in 1978, The Denationalization of Money, discussed here.

Today the state has become, as Frederic Bastiat warned in 1850, "the great fictitious entity by which everyone expects to live at the expense of everyone else," through legal plunder. Indeed the cult of the omnipotent state has morphed into a quasi-religion itself, in which the state is seen as God and is assumed to have all the powers of a deity to alter reality at will. This magical thinking explains the many failures of the war on poverty, the war on drugs, the war on terror, and now, the war on Covid.

What we are about to see is the phenomenon of a massive flight of purchasing power into private, digital money. This will be one of the leading trends of the next decade, bigger than the introduction of the PC in the '80s, or the internet in the '90s, or the smartphone in the 2010s. Even bigger because since this trend involves money itself, it will literally change the way the whole world does business! How can we be so certain? Because almost all the monies the world uses today are going to collapse. This will provide the impetus for the migration. One is reminded of the answer a formerly rich man gave when asked how he went broke. His quip in reply: "Slowly at first, then suddenly."

We're not alone in making this prediction. Charles Hugh Smith, whose annotated diagram appears above, recently wrote:

A host of decentralized, transparently priced non-state currencies will compete on the open market, just like goods, services, and commodities. The Fed's essential role -- serving the few at the expense of the many, under the cover of creating money out of thin air -- will be repudiated by the implosion of the economy as all the Fed's phantom "wealth" evaporates.

Another famed author and investment newsletter writer, Porter Stansberry, has written:

Governments will discover, in only a few years, that the majority of the world's economic power has fled to digital money -- a new form of money that can't be seized, can't be taken by force, and that only retains its value where property and privacy are respected.

Alasdair Macleod, a respected economist and widely read market analyst, said recently:

The poor will starve and many of those who became rich through financial asset inflation will eventually join them. For the latter class, there will come a point where they abandon the failing dollar-based inflation scheme to save what they can from the financial wreckage.

And that's the goal of this article: we're going to show you a comprehensive, well thought-out plan for saving what you can by getting some of your money out of Dodge and into private currency before the financial train wreck unfolds, and doing it with leverage, privacy, and strong profit potential!

The Great Monetary Pivot

The old existing monetary system has these characteristics:

  • State-run, monopolistic
  • Top-down
  • Debt-based
  • Compulsory use (legal tender laws)
  • Highly regulated
  • Low privacy
  • Crony capitalist (iron law of oligarchy)

The new developing monetary system has these characteristics, almost entirely opposite:

  • Private, competitive
  • Bottom-up
  • Asset-based
  • Voluntary use
  • Free market
  • Maximum privacy
  • Entrepreneurial capitalist

In both systems, something called the Cantillon Effect applies. An Irish banker and economist in 18th century France, Richard Cantillon, observed that new money drove up prices as it was spent. He also noticed that the creation of new money wasn't neutral. That is, those closest to the creation of the new money got the most benefit from it.

In the old state system, those closest are banks, governments, megacorps, and the very wealthy. Everyone further away sees only the higher prices. Thus wealth inequality increases over time.

We're shortly going to show you a private cryptocurrency that harnesses the Cantillon Effect in reverse, building wealth for its holders from the bottom up, instead of trickling down from the top!

The Peaceful Revolution

But before we do, we'd like to deal with some objections to the idea that replacing the monetary system is the only effective way out of our global predicament. For example, why can't we simply vote all the bums out at the next election, and change course? We think it's already too late for that kind of change to make any difference, but even supposing it could, please reflect on these ideas:

  • Voting for a new lord and master will never set you free.
  • Turning to the other wing of the boot-on-your-neck party will not get the boot off your neck.
  • Trying to curb the abuse of political power through politics is like trying to eradicate cannibals by eating them.
  • Politicians are violence brokers, who decide where the guns of government will get aimed.

The real solution of course is to stop expecting to make any kind of positive change at gunpoint. The very nature of government makes positive changes through political means all but impossible.

Government is simply the mafia doing business in the daylight, with flags in front of its offices, in an aura of undeserved legitimacy.

Harry Browne, Why Government Doesn’t Work (1996)

Governments are essentially highly organized crime syndicates, whose specialty is breaking people's legs and then handing out crutches, saying: "Aren't you glad we're here to take care of you?"

Governments need misery, which they create in abundance, to justify their existence. Government is a disease masquerading as its own cure.

L. Neil Smith, The Probability Broach (1980)

The entire coronavirus lockdown sequence of events illustrates Smith's point beautifully, and so will its sequel in the Greater Depression now underway. From the government's perspective, the coronavirus is like a gift that just keeps on giving. First, an excuse to grab all sorts of new powers, and abolish pesky rights that have stood in its way for centuries, like freedom of assembly, religious worship, and free speech. Then, an excuse to ride to the rescue with endless money and programs to alleviate the suffering caused by its own power grabs. Which will ultimately be paid for by the victims of course.

But the solution to the violent disease of government is emphatically not more and better violence. Riots and gangs of looters only give the state an excuse to ratchet up the violence. And any cabal capable of organizing violence better than the state is almost certain to be worse than the state. This is how revolutions depose a King Louis XVI and end up with Emperor Napoleon Bonaparte. Or swap Czar Nickolas II for Stalin, or exchange mass murderer Chang Kai Shek for a much bigger mass murderer in Mao Zedong. Too often what you get is merely the shadow that displaced the darkness. The American Revolution, which left in charge a group of men who, while far from perfect, at least didn't want the powers of royalty, was a huge aberration. We should not count on being so lucky again. Any leader riding in on a white horse is a potential tyrant, at best.

So if we want to shed our chains, how do we do it? First, we must recognize this profound truth:

Long Live the King

Martin Luther King, Jr. recognized this truth. He understood that for decades, black people had complained about Jim Crow laws that institutionalized discrimination. Many whites were sympathetic to these complaints. But as long as everyone complained but continued to obey the laws, nothing changed.

The fundamental political question is why do people obey a government. The answer is that they tend to enslave themselves, to let themselves be governed by tyrants. Freedom from servitude comes not from violent action, but from the refusal to serve. Tyrants fall when the people withdraw their support.

-- Etienne De La Boetie, The Politics of Obedience

King's genius was to unite disobedience with goodness. Normally disobedience is seen as wrong. But when the law itself is wrong, disobedience becomes right and good. Adopting this strategy of righteous civil disobedience changed individuals, and eventually the laws as well. In King's own words:

Non-cooperation with evil is as much a moral obligation as is cooperation with good.

Cowardice asks the question: is it safe? Expediency asks the question: is it politic? Vanity asks the question: is it popular? But conscience asks the question: is it right? And there comes a time when one must take a position that is neither safe, nor politic, nor popular -- but one must take it simply because it is right.

Thomas Jefferson, with his monumental talent for conciseness, put it even more simply: "Rebellion to tyrants is obedience to God." No vibrant society can exist in a state of slavish obedience.

The truth is we can end the senseless and immoral lockdowns whenever we choose. The method was known nearly 500 years ago:

Resolve to serve no more, and you are at once freed. I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break into pieces.

-- Etienne De La Boetie, "The Discourse of Voluntary Servitude" (c. 1552)

We can likewise end the state's currency monopoly -- which has fostered the growth of an unjustly enriched oligarchy, global war, and the withering of human liberty -- any time we choose. We do it by voting with our feet and our money, far more than at the ballot box. We must embrace the voluntary migration from the old monetary system to the new. By doing this, like Prometheus we'll steal fire from the oligarchs.

Introducing Lyra!

Lyra is a second generation cryptocurrency issued by the Ascension Foundation. Second generation means it builds on top of the characteristics of first generation cryptos such as Bitcoin. Lyra has these main characteristics which exemplify the pivot to the new monetary system discussed above:

  • Absolute privacy! No records of transactions except receipts for the payer and payee, which they can delete permanently at any time. No identity associated with wallets. True digital cash, every bit as private and invisible as physical cash.
  • Fractionally asset-backed (by bitcoin) so the value will never fall to zero.
  • Payments go through in seconds, using a scalable clearing mechanism.
  • Lyra can be deposited into staking programs that earn more Lyra. This harnesses the Cantillon Effect in reverse from the bottom up, and rewards Lyra's holders instead of its issuers.
  • The unique Tier system under which Lyra is sold provides scarcity at each price level, but leaves the number of Tiers (and thus the total issuance) uncapped and determined by the market.
  • An optional business program exists which allows you to sell or resell Lyra to other people.
  • Ascension's wallet tech allows bitcoin and litecoin to circulate privately off-chain alongside Lyra, with a completely private, escrow-backed asset exchange built right into the wallet.

This short list of features is enough to support the development of a whole new free market economy! This new economy supports the peaceful economic exchange of goods and services outside the state's control. This is sometimes called a "counter-economy," embodying the philosophy of agorism. Through agorism we can, as Gandhi urged, "be the change we want to see in the world."

In order to end this totalitarian nightmare we must be able to buy and sell products and services while ignoring the state's laws, regulations, and restrictions on commerce. We must buy and sell what we want, how we want, with whomever we want, anytime we want, without government approval.

And without anyone needing to go into debt in order for money to exist.

This is the only way the world can get out from under the oppressive control of oligarchs and incompetents. Keep the debt-based money and you must also retain the economic and political system built on top of it.

As their "mainstream" system implodes, the way civilization will survive is through alternative markets in the counter-economy. We're fast approaching the reality of the former Soviet Union, where the official economy was a joke ("we pretend to work and they pretend to pay us") and everyone actually produced and traded most of the necessities of life in black and grey markets. Eventually the official system collapsed entirely -- but the people survived.

Our challenge right now as informed individuals is to get out in front of that trend.

The architecture of Lyra as a currency gives it a unique ability to act as a hedge against the collapse of national economies and currencies, plus the utility to play a role in the decentralized, competitive world of private currencies in the agorist economy of the future.

Lyra's early adopters have the opportunity not only to benefit from the transition but also to earn by helping the transition along!

Why Not Just Use Gold, Silver, or Bitcoin?

We love gold and silver. In fact the earliest designs for what became the Ascension wallet transaction system were intended as a next-generation censorship-resistant digital gold system, after the first generation digital gold currencies (e-gold etc.) got shut down by the state, for the sin of competing too well with their fiat debt tokens.

But the fact is that while precious metals can be digitized and made censorship-proof (e.g. by putting them on a decentralized blockchain), the reserves required to back a digital gold currency cannot be. Most of the world's investment gold is in the form of 1 kilo or 400 oz. bars, and is stored in bonded warehouses in known locations in financial centers. During the last Great Depression, gold was confiscated. (It was illegal for US citizens to own gold from 1933 to 1974; although of course many did so anyway, which is where all those collectible coins came from.) It's entirely possible that gold will again be seized during today's Greater Depression. Also, large amounts of gold are basically unobtainable at this point, especially by smaller players.

Silver is simply too bulky and expensive to transport and store, for its value. In coin form it's hard to use except locally, it's available only in fixed weights, and needs to be protected against theft.

Bitcoin of course is purely digital, and so, much harder to seize. It would be prohibitively difficult to shut down the global blockchain network. Moreover bitcoin can be stored in "cold wallets" not even connected to the internet (thus hack-proof), or in multi-signature wallets requiring more than one individual's authorization to spend (what one might call "thumbscrew-proof").

Which is precisely why Ascension chose bitcoin as the best asset backing for Lyra, even over gold. What bitcoin does not have is two things: privacy and growth.

The transaction rate for Bitcoin is too limited for it to serve as a retail currency. Bitcoin blockchain transactions are not private, and the record is permanent. Thus if a wallet address is ever de-anonymized, now or in the future, it can be forever linked to the parties involved. Professional tracers like Chainalysis who work for governments boast that they have de-anonymized up to two-thirds of all bitcoin addresses to date. This is why bitcoin should only be spent, when possible, off-chain.

Ascension's tech provides this additional privacy feature for bitcoin, while Lyra has it innately.

Because Lyra is fractionally backed (always <50%) it will not be seen simply as a proxy for bitcoin. This feature allows Lyra to pay its holders with new mintage of Lyra, utilizing the Cantillon Effect as a positive force that will help propel flight capital into Lyra more easily.

At the same time, since Lyra's supply is ultimately uncapped, it will not get hoarded the way bitcoin will due to its permanently fixed supply. This means Lyra can also function as a transactional money (a "medium of exchange"), not merely as a store of value.

The bottom-line is that holders of Lyra gain leverage versus holders of bitcoin. Bitcoin may rise significantly in price (extremely likely in our view!), but bitcoin doesn't generate more coins for its buyers. Nor does it pay anyone for promoting it. Lyra does both.

Plus bitcoin hasn't been available at $1 per coin for about 10 years!

Notice too that the sooner you obtain Lyra, the longer you'll have the Cantillon Effect working on your behalf. Not to mention getting a lower purchase price by buying in the earlier Tiers.


The government-caused economic devastation due to panic and overreach over Covid-19 (nevermind the riots, by far the biggest looters are the policiticans!) has catapulted the world into very hard times indeed, a burgeoning Greater Depression. Worse, many authorities are proving unwilling to admit their errors, which will continue to inflict ongoing damage. For example, most restaurants will go out of business if restricted to operating at 50% capacity. They will have to double their meal prices, and likely end up with many empty tables. The carnage will be blamed on the virus, but it wasn't a virus that made millions of people unable to work or do business.

There is no hope for system reform or political solutions. If you want to peacefully protest or vote, fine. (Although voting on a jury to acquit someone charged with violating a lockdown order trying to earn a living might be a more effective vote.) Secession could be worth pursuing. But don't expect many meaningful results. If voting could actually change anything at this point, doubtless voting would swiftly be outlawed.

Here is the strategy that can work to foment real change: opt out. Evacuate wealth into new debt-free monies that will protect property and privacy, and so foster the development of a better, fairer, more positive social order. The Ascension Foundation has designed Lyra to be just such a currency. We believe its unique qualities make it one of the most competitive contenders.

And that's really the point: competition improves other things to the benefit of the consumer. It's time to introduce free market competition in money. We hope you'll join us and help separate State and Money!

Note: Lyra is sold through, but you must be referred by an existing member. Please use the sponsor link provided by the person who sent you to this page, or ask them for one.

This is the blog of the Ascension cryptocurrency project.

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