The Monetary Ponzi: The Inevitable Implosion of Fiat Currencies.

May 7, 2024

Dear friends,

Allow me to share something INCREDIBLE with you.

What we are currently witnessing is much more than just a phenomenon. It’s a clear sign of the imminent collapse of the US dollar and all the fiat currencies that follow.

What you are about to read is of paramount importance.

Let me shed some light on the situation. The US Treasury, supposed pillar of financial stability, issues bonds and other investment securities, commonly referred to as “treasuries”. But here’s the catch: these treasuries are issued when the US federal government spends more than its budget, thus creating a budget deficit. The sale of these treasuries is supposed to offset this loss.

Now, here’s the problem: the US federal government has had a budget deficit for 49 out of the last 53 years, despite a single surplus year in 2001. Even that year, the surplus did not prevent the total debt from increasing. Why? Because countless previous debts came due, requiring renewals. And guess what? The government, through the Treasury, turns to new investors to finance these old loans, in an endless cycle of debt. That’s the recipe for a Ponzi scheme.

And make no mistake about the magnitude of the problem. The total US debt exceeds $34.7 trillion, a sum so astronomical that it defies imagination.

You want an example? 31 years consist of one billion seconds, taking us back to 1993. But 30,000 years contain one trillion seconds. And of course, you have to multiply that by 34.7 to even approach the conceptualization of $34.7 trillion. That’s the US debt. Feeling the sting?

And now, hold your breath: the primary buyer of this debt is the government itself. Yes, you read that right. The Treasury issues these obligations to cover excessive spending, then buys them back at a faster rate than anyone else to offset these losses. It’s a Ponzi scenario beyond comprehension.

But how do they do it? Well, they simply have a money printing press at their disposal. The debt then becomes as illusory as the dreams of a novice trader.

The US government is the Ponzi director, the old investor, and the new investor. A true masterclass.

A Ponzi scheme is a type of fraudulent financial scheme where investors’ returns are generated primarily by recruiting new investors, rather than by real profits from economic activity or productive investment. This scheme typically involves an individual or entity promising high returns or profits that are unreasonably high compared to other investments or market performance. Funds from new investors are used to pay returns to previous investors, creating the illusion of financial success. However, the scheme typically collapses when the flow of new investments slows or stops, resulting in losses for most, if not all, investors. This type of scheme is often named after Charles Ponzi, an Italian-American scam artist from the early 20th century who made this type of fraud famous.

But how do they do it? They have a money printing press. It’s as simple as that. The debt might as well not be real.

Key point: The US is not the only country following this pattern. 182 out of 222 countries in the world are running budget deficits. The Ponzi scheme is everywhere.

The US leads the modern monetary world. They are the big boss, the high priest, the big shot.

The current global financial economy is built on the shoulders of the United States.

There would be a massive problem if the US had trouble finding buyers for their debt.

But the world is beginning to wake up to what is happening, as evidenced by some recent headlines:

Recent headlines:

In short, an increasing number of investors are concerned about the US debt situation, which is diverting them from purchasing US Treasury bonds.

With lower demand, and as indicated below, the US Treasury is launching a “cash buyback operation,” with the aim, as they say, of “improving liquidity in the Treasury bond market.”

What’s really happening is that the Treasury is using its printing press to directly purchase the bonds it issues, ensuring that these low-demand bond auctions do not continue. This leads to an inflation of the money supply, which is a dangerous consequence.

Here’s where the problem lies:

The US central bank, the Federal Reserve, has set an inflation target of 2%. Inflation hasn’t been at 2% recently, and in fact, it has increased for three consecutive months.

The Federal Reserve has set high-interest rates, currently at 5.25%, as a method to discourage borrowing, spending, and to control inflation.

But it’s not working. And there’s a bigger problem.

Key point: The US federal government pays interest to investors who own Treasury bonds, and this interest is part of the budget. Higher interest payments = more federal spending = larger budget deficits = more debt issuance = higher supply of Treasury bonds = lower demand = fewer buyers = printing money = higher inflation = higher interest rates = higher interest payments.

The global financial system is on the verge of a breaking point. As the foundations of the global economy begin to falter, it’s time for us, as investors and fund managers, to take action to protect ourselves and prepare for an unprecedented period of uncertainty. Seeking alternative solutions and diversifying portfolios are essential to navigate these choppy waters and ensure the long-term preservation of capital.

Remember, the US government will never let the Treasury bond market fail, as it would automatically result in a default on the debt and an incredibly chaotic avalanche of collapses (domino effect).

They will always resort to the printing press to bail things out. The Treasury will continue to print more money to keep the system afloat, as evidenced by their upcoming “buyback operation.” But inflation is the fatal flaw.

The Ponzi scheme is in its final chapter. The denouement is here.

The inflation train has left the station, and it’s never coming back.

Covid has accelerated ruin. Inflation has escaped, now it cannot be contained. It has become a beast out of control and self-feeding, with no hope of turning back and will continue to do so, over and over, gradually, until the final collapse.

If you haven’t noticed, the US dollar has been heading toward the “worthless” direction for quite some time (losing 99% of its value since 1972).

It’s inevitable. The US dollar, and all fiat currencies, will die.

And only then will a new financial order be born.

An innovative, specifically designed, global, unprintable, unable to be manipulated, verifiable, instantaneous, digital monetary system will emerge, liberated from the grip of bankers and governments, once and for all (Bitcoin?)

And here’s the latest update: The US Treasury announces its first cash buyback operation since 2002.

The US Treasury is launching its first buyback program since 2002, scheduled to start on May 29, 2024. The program is designed to improve liquidity in the Treasury bond market and is expected to run until July 2024. During this period, the Treasury plans to conduct liquidity support buybacks every week, up to $2 billion per operation, with an allocation of up to $500 million for TIPS (Treasury Inflation-Protected Securities).

This initiative aims to ensure that the Treasury bond market remains the deepest and most liquid in the world, addressing concerns about market functioning and resilience.

In my opinion: This is a bank bailout.

Take heed…


Note: Il est important de se rappeler que le trading est une activité risquée et qu’il est important de se rappeler que les pertes sont possibles. Il est donc important de bien comprendre les risques associés au trading et de ne pas investir de l’argent qu’on ne peut se permettre de perdre. Il est aussi important de se rappeler que les performances passées ne garantissent pas les résultats futurs. Il est donc important d’avoir une stratégie de gestion de risque appropriée en place et de ne pas se fier uniquement à un seul indicateur pour prendre des décisions d’investissement.

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