The World Economic Forum has held its annual meeting in Davos, Switzerland. As a young economist, I used to skip university (graduate student) or office hours (PhD student) to watch interviews of the industrial, political and economic leaders from Davos. I rarely do that now, and if I do, my motives are completely different than before.
I used to watch the interviews to understand, where we are, but now I am watching them to see, where we are likely to head. I have to admit that the “Corona times” completely changed my view on how the world and our economies work.
Like I have mentioned before, I am a history 'geek’, which arises mostly from the fact that I was grown in a home “infested” with historical knowledge (my mother is a retired lecturer of history). I consider this to be one of the greatest blessings I received growing up.
I vividly remember one of my mother’s quotes from maybe 10 years ago. She stated that “There have always been conspiracies. Now we just need to know, in which one we currently are.” That stuck, and during the past three years I’ve been returning to that line over and over again.
During the summer of 2021 we, as a firm, became convinced that the Great Reset -agenda, driven by the WEF, needed investigating. In December 2021, we published a special report entitled: Into the global dystopia? (Please note that our homepage is currently down due to a cyberattack.)
That report may turn out to be the most important single analysis, we have conducted, thus far. Our analysis showed, based on publicly available data, that the aim of the Great Reset (from now on GR) is to transfer power from democratically elected governments to supranational entities (corporations and organizations).
This all has been said and written publicly (and I don’t mean the “you own nothing and be happy” -paraphrase) , but getting into bottom of it required some economic and political analysis. It profoundly changed our thinking and nowadays we always include the Great Reset “angle” to our scenarios. As an informed forecaster, you simply cannot bypass the GR -agenda, as it can have a dominant role dictating our future path.
When I wrote our scenario forecasts concerning the GR, a thought of the possibly sinister aims of the current elite, haunted my thinking. The analyses of our firm have always been rooted in rigorous and unyielding analyses of different data. We never conclude anything that cannot be supported by (drawn from) analysis of historical and/or current developments. Yet, the Dystopia -scenario was rather speculative.
I currently feel the urge to write a bit more on this worst-case scenario. This is because, if such a malevolent scenario is at play, by the global ‘elite’, it will lead to dramatic actions taken by governments causing major changes in our economies. One could argue that reliable forecasts cannot be currently done without speculating on the possibility that such a path exists.
The (short) history of malevolent conspiracies
History has a massive pool of conspiracies ranging from coups to assassinations. This is why I consider it to be rather fathomable how so many people, especially academics, outrightly rule out all malevolent conspiracies in our time. This simply is not supported by historical evidence.
I personally consider that conspiracy of the German elite to support Adolf Hitler and Nazis, and the funding of global bankers to Lenin to support the revolution in Russia, to be the most heinous ones currently documented in historical research. We explained the first of these in our Great Reset -special report:1
In Weimar Germany, in the early 1920s, the elites in the army, the bureaucracy, the judiciary, academia and business wanted to engineer a return to an elite-controlled authoritarian society. The reason? Fear of landowners of losing their lands and the political ‘marginalization’ of the elite through democratization of the German society. This produced ‘tacit’ support by the German elite for the Nazi party leading to one of the most oppressive and destructive regimes the world has ever seen.
The second one, that is, the funding of the Communist revolution in Russia is a more contested one. However, many historical accounts indicate that the global financial community, at least, welcomed the change of regime. Some researchers assert direct financial support to Trotski and Lenin from both Wall Street and Germany.
The motive of the (speculated) German support for the revolution was obvious: to seriously hamper Russian war efforts in WWI. The motive of the (possible) financial support to Bolsheviks from global bankers is somewhat more ambiguous. If true, it may have arisen from the fact that the rule of Nicholas II was failing and there was a major sovereign default looming.2 The other, much more sinister motive of the (possible) support of the bankers, or the 'elite', would have been the aim to create an early version of a state controlled society. This is naturally pure speculation.
The root of conspiracies: control
Freedom has been the most-rare “currency” of humanity since our inception. The German elite conspired, against the German populace, in the late 1920s to regain the control they lost. In their search for control, they created an uncontrollable monster. The possible funding of the Bolsheviks, by global financiers, could have sprung out of the idea to both experiment and control the (geographically) biggest nation of the world.
In the above-mentioned report, we speculated on the aims of the current global elite, drawing from the example of Germany in the 1920s:
Why would the global elite (“globalists”) not dream of such a future for themselves? Why would they not want to rise to control the world, and reclaim it for themselves, as was the case before the rise of the middle-class in the latter stages of the third wave of industrial revolution from the 1990s onwards?
The aims or objectives of such a ‘global coup’ could include:
1) Total control of economies and societies to impose various political agendas.
2) Full media control and a police state to control public opinion and keep dissidents in check.
This is, at least, in the realms of possibility considering the recent past and ongoing developments.
What if?
By observing the response and timing of global events, which have unfolded during the past three years, we can assert the possibility that we are drawn towards the Dystopia -scenario. The total societal control can be asserted by instating a power structure that has minimal democratic control and an economic structure that allows for maximal control of financial transactions.
These two can be accomplished through:
Creating supra-national, government-like entities that are run by the selected few.
Creating a government controlled system for monetary transactions.
In Europe, the former can be established by greatly enforcing the role of the EU, especially European Commission on national and European-wide decision making. Globally, this can be done by subjecting jurisdiction to the United Nations and, for example, World Health Organization. The World Economic Forum can be seen as a private entity affecting governments and corporations, alike.
Nationally, and also globally the latter can be created through the issuance of (retail) central bank digital currencies, or CBDC’s. We have explained the ‘gimmicks’ of CBDC’s in the GnS Economics Newsletter. Essentially, in a retail CBDC, everyone will have an account in the central bank. During a banking crisis, central bank may (is likely) to rise to dominate the banking industry, if CBDC has been instated. In the worst case, it may even become the only bank of a country. This would make it possible to employ arbitraty withdraw limitations, to set interest rates at will (like to -10%) and to direct the funds (also deposits and loans) to “suitable” political projects, creating an out-right economic dystopia.
How to get there?
It has been known at least since the Roman times that people will not relinquish their freedoms easily. What one needed for it, is fear. When people are fearful, they relinquish their freedoms more easily and can be pushed further beyond their ‘comfort zone’ than otherwise possible.
For example, I never thought we would see the Nazi oppression of the Jews, of 1933-1938, replayed in Europe again, until I experienced it myself as a non-vaccinated citizen of Finland in 2021. It should be noted that citizens of some other countries experienced it more brutally that we in Finland did. This was achieved by touting the danger of the virus and demonizing us un-vaxed. The propaganda operation was worryingly succesful.
However, the Corona policies were global with few exceptions. Moreover, one leading Finnish civil servant disclosed to me, privatively, that all major decisions concerning Covid (lockdowns, etc.) were being instructed from a source(s) outside Finland. The civil servant went as far as accusing our PM, Sanna Marin, of a high treason. These got me thinking that something is not right here.
Now, as normality has somewhat returned to western countries, another shock would be required to push through the Dystopian GR agenda. It needs to be large enough to strike deep fear into the heart of citizens, again. Nothing can probably establish it better than a war.
Alas, while this may sound crazy, the next step in the plan of the global ‘elite’ could be escalating the Russo-Ukrainian war to the point, where Russia would become a direct threat to European security. Essentially this would imply a near-full or full Russian invasion of Ukraine. This would establish three “goals” for the Dystopian agenda.
European citizens would demand for rearmament.
The only entity with the financial leeway for this in Europe, is the EU.
‘Militarizing’ the economy would stave off the financial collapse threatening especially western economies.
The fear of further Russian aggression would most likely lead to calls for a stronger European defence structure. The EU would then be likely to ‘step to the plate’ with an offer of a Defence Fund to shore up mutual defence. This would create an European Defence Union effectively establishing a Federal European Union.
Moreover, we wrote in our Into the hellfire -scenario:
This would mean that all efforts would be made to increase military spending and, likely also energy independence. We would probably see a massive government issued spending spree. Fiscal (budget) rules would be dismantled and central banks would be subjected to support fiscal spending. This would imply scrabbing of the inflation targets and restarting QE -programs.
The massive fiscal spending and re-starting of QE:s would essentially flood the economy and markets with liquidity (money). Recession would end and asset markets would rise probably entering a volatile, war-time ‘bull market’.
The EU -fund, likely in the size of several billion euros, would create a massive government-run stimulus program through ‘militarization’ of the European economy. The effect of such a scheme would, naturally, be reactive, with the shock of a Russian invasion reverberating through the global financial architecture.
Short-term economic implications
While the financial markets have been lifted, by the re-surgence of U.S. dollar liquidity and the better-than-anticipated economic figures due to the stimulus of China, ‘jitters’ have re-surfaced, as of late. They have been mostly caused by a resurfaced fears of a recession (more on the economic situation next week). Alas, any major shock could not come at a worst time.
Now, if Russia launches a major offensive, possibly supported by Belarus, and if Ukrainian lines will be breached or especially if they are over-run, jitters in the financial markets would be likely to turn into a rout. This could reach similar proportions, like during the Corona-shock of February/March 2020.
Hence, the question would become, could and would central banks pivot in a such a situation?
It’s my take that they would first keep a ‘poker face’ for inflation, but eventually some emergency operations would be launched to stem the panic. This is because if everything crashes, central banks would lose trust and their statue, which are already dwindling. Thus, it’s likely that they will be forced to pivot at some point to “save face”.
Another factor that could affect to this, is the Dystopian scenario. If it applies, central banks and CBDC’s are crucial for its implementation, which means that financial crisis would be used to push through the ever-greater role of central banks. It could actually be presented as a solution for the crisis, which would also imply an eventual pivot.
Thus, what comes to (every form) of investing, I would keep my eyes tightly on developments in Ukraine. Escalation on both sides seems to be underway with Russia launching new attacks and European nations drafting plans of sending tanks and other (heavier) military equipment into Ukraine.
Lessons of European history seem not to be heeded and this, unfortunately, lays the path towards the Dystopian scenario and WWIII. We have to hope that cool heads and reason prevails, and keep preparing.
Disclaimer:
The information contained herein is current as at the date of this entry. The information presented here is considered reliable, but its accuracy is not guaranteed. Changes may occur in the circumstances after the date of this entry and the information contained in this post may not hold true in the future.
No information contained in this entry should be construed as investment advice. Readers should always consult their own personal financial or investment advisor before making any investment decision, and readers using this post do so solely at their own risk.
Readers must make an independent assessment of the risks involved and of the legal, tax, business, financial or other consequences of their actions. GnS Economics nor Tuomas Malinen cannot be held i) responsible for any decision taken, act or omission; or ii) liable for damages caused by such measures.
See, Acemoglu and Robinson (2020, p. 400-401). The Narrow Corridor: How Nations Struggle for Liberty.
Note that Bolshevik Russia did default to foreign liabilities, eventually.
I'm reading Peter Zeihans' "The End of The World Is Just The Beginning". Mapping the Collapse of Globalization. It goes deep into the pending, and non-stoppable, collapse of the world while laying our the whys and how's throughout mankind's history.
In wartime economy GR/DS is mandatory to some extent and Europe is forced to introduce wartime economy in IHF/WW3. In the USA there is high probability of Monroe Doctrine winning the 2024 elections. BR JKi