Elliott's Paul Singer Reveals The Thing That Scares Him Most

Tyler Durden's picture

When it comes to market experts with decades of insight, we will pick soon to be Second Admiral of his own sovereign navy (comprising of privateered Argentinian schooners, Belize catamarans, and soon, Greek Made in Germany submarines), Elliott's Paul Singer, over those of any fly by night TV talking head, or "information arbitrageur" whose only 'alpha' in the past decade was courtesy of expert networks. The same Paul Singer whose outlook on what the next crisis may look like we posted yesterday.  It is the same Paul Singer, who three weeks ago was a headline speaker at the Archstone Partnerships annual meeting, in which speech he laid out not only the biggest threat facing America - namely the arrogance of the United States "by not realizing that in today's world... you have to be attractive as a country [because] capital will go where it's welcome", but more importantly, the thing that keeps him up at night: "The thing that scares me most is significant inflation, which could destroy our society."

In other words, one of the best and brightest investors in the world, is most terrified by the one thing that every central-planning dispensing economist says will never happen: hyperinflation. Our money is certainly not on the economist theoreticians who could never foresee the second great depression their lunatic policies drove the entire developed world into.

Extracting the key parts from Singer's speech. Highlights ours

Let me make a few comments and observations on the current investment scene. I said before that every once in a while things really are “different this time,” and I thought of a metaphor earlier that might be useful to illustrate an important point. Let’s do a thought experiment: Let’s make believe we are in 1960 and sitting in Germany, and we are a group of German investors and businesspeople, about the same ages as the people here today. The group would be people who had seen the most astonishing changes in the underlying conditions of investing and growing capital—a complete evaporation of savings from 1914 to 1923; complete destruction of society; and a complete change in governance from 1943 until after the War. Keep that image in your mind when you come back to 2012 in New York City today and realize the basic terms and conditions of everybody in this room have not really changed over your entire career. There have been booms and little crashes, you’ve made money and lost money, some people were wiped out and others became wealthy, but the elections come every four years, power is transferred peacefully, and taxes go up or go down.


It concerns me that we might be entering a period—we have to think about this possibility—when the basic terms and conditions of owning capital, making a rate of return, and keeping the money you earned might be in the process of changing. Charles Krauthammer said some time ago that most of American political life is between the 40-yard lines and that this crowd, which has been elected for another four years, is kind of at the 30-yard line. I had thought about it at the 10-yard or 5-yard line, but Charles is more mature than I and I’ll accept what he said. But I’m very concerned about class warfare generated from the top, about the possibility of an extended period of lacking strong economic growth. I think economic growth could be easily achieved in the United States at greater levels, and I’m quite concerned that the current prospects, beyond the so-called “fiscal cliff” and a deal on taxes and spending cuts, will be an extended period of low growth and possibly a recession, the continued bashing of money and success and very large tax increases.


I want to call to mind a micro choice that I think is relevant. If you lived in the upper Midwest, you’d know the difference between Indiana and Illinois. You would know Indiana welcomes jobs and businesses, and finds ways to work with businesses; and Illinois is on a slide to Hades. Illinois—and I suppose Michigan, too—is doing everything possible to support unsupportable expenses, structures and make thing miserable for taxpayers.


By the same token, I think America—and this goes beyond President Obama’s administration—has been quite arrogant for a long time by not realizing that in today’s world, where many countries around the globe can turn out products and services more cheaply than America, and where America has lost so many industries and jobs to other countries, that you have to be attractive as a country. Capital will go where it’s welcome. It is subject to an understandable rule of law, regulation, fair and attractive taxation, and the quality of life. I’m afraid of that, because when you look at the sweep of the booms since the Internet boom and monetary policy, and the extremism that has become embedded in current monetary policy, the United States, Europe, the U.K. and Japan, you do see extreme monetary policy.


They say this is not massive money printing, but first they are wrong; and second, monetary authorities in the United States did not see the crash coming and the unsoundness of the financial system. In fact, right up until the crash they were saying that nothing like what happened could ever happen. So money printing and zero-percent interest rates, which have distorted the economic recovery and the landscape in the United States and Europe, have become a substitute for sound, pro-growth, fiscal regulatory tax policy. As a result, they say they are not concerned about inflation. This monetary policy, $3 trillion of bond buying in the United States, $3 trillion in Europe and another $2.5 trillion to $3 trillion in Japan, is unprecedented. It is not the case that they know the ultimate inflationary potential when this low-velocity money gets back into the system and acquires some velocity. If and when people lose confidence in paper money because of repeated bouts of quantitative easing and zero-percent interest rates—it could happen suddenly and in a ferocious manner in the commodity markets, in gold, possibly in real estate—interest rates could go up at the long end by hundreds of basis points in a very short time.


I’m quite concerned as a money manager that we have to manage money, not just for the boundaries of what’s in front of our faces—maybe we’ll have a little tax increase or not, the fiscal cliff, or the stock market might go up or down 10% or 15%—but for a basic shift. The thing that scares me most is significant inflation, which could destroy our society. Frankly, in my view the recent election has diminished the probability of a strong resurgence of growth, and I’m quite concerned. Others are concerned about the course of the next 12 to 24 months in terms of growth, taxation, regulation and social unrest, a resurgence or larger version of bashing anyone who has made money or makes money and not paying their fair share.

Or, perhaps, the developments over the past several months were geared with precisely this outcome in mind: because there is nothing quite like "social unrest" to resolve decades of untenable economic and monetary imbalance build up...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Maghreb's picture

Again we have the peak oil argument. Again I will say you are using the argument of scarcity to cover for what amount to massive malinvestment and corruption. keep in mind before the Empire fell it almost collapsed due to massive wars that were sparked when the Roman's tried to enforce their currency on other nations. Read between the lines in the New Testament and the accounts by Josephus and Tacitus and you will see ever increasing economic controls causing devastating poverty, oppression and wars. The entry of  Pompeii into Jerusalem to "protect" the kingdom. The famous Census that led to Judas of Galilee revolting the same year Jesus was allegedly born. The demand that taxes be paid in Roman currency that sparked the revolt that led to a million dying in the seige of Jerusalem. There was little "Peak" anything back then but a huge amount of corruption. I would argue slavery was being used to prop up the financial system. The Roman's needed a choke hold on the various parts of the empire to hold it together. Slavery was a way of keeping Labour resources firmly in the hands of Roman's. How could you rebel when your nation was fed by grain surpluses grown by cheap slave labour abroad? Even if you tried to fix this situation, you had to pay crushing taxes to Rome. Look to Greece and you'll see the same situation playing out.

Oil scarcity is being used the same way that the Romans used slavery (Cheapest of Labour) and grain (control fo the food supply). In modern terms Oil is far better than either of these because applied in the correct sectors it does wonders for both magnifying the power of Labour and food production. Whether oil production is falling or growing is a moot point. As the U.S empire grows it will require tighter and tighter controls over more and more people. For humanity and individuals to avoid the horrors of a similar collapse both energy scarcity and imperial style corruption will need to be resolved. I think though things will fix themselves in the same catastrophic manner they did centuries ago though. No one walks away from the throne Get ready for another Quietus. 

Again I got nothing against you Peak Oil people. I'm 95% sure you are correct about growing scarcity but the central banks are not doing anything good for anyone. If this system fails a new one can take its place. Perhaps in a sudden catastrophe, perhaps in a well thought out gradual transition. Humanity has always done this. The Central banks are simply buying time and feathering their nests. Even if Oil was cheap, (I don't think it could ever be with the wars it seems to spark) we would only be in a slightly better situation and have slightly more time.


Sophist Economicus's picture

Hyperinflation of the currency DUE TO A LACK OF CONFIDENCE, NOT increased demand ALWAYS leads to a collapse (depression).


Rome had a hyperinflationary event as their currency was debased (soldiers left their posts and let the 'barbarians' in.)    The OFFICIAL roman currency was worthless,, their people starved and their economy and society collapsed.

Landotfree's picture

The roman currency was not worthless... they were not producing enough to met the needs of expansion ie interest... the silver mines were not able to produce at an exponential rate.  


centerline's picture

Coins were phsycially devalued by using less and less actual silver content.  Now done digitally.

Landotfree's picture

Actually, from what I read they started chipping the edges off the coin to make new ones.   The silver mines were not able to expand at the needed exponential rate.   If their system ran on dirt they would have eventually ran out of dirt.

akak's picture

Landotfree, you are showing your ignorance again.

Coin clipping was a method of stealing thin shavings of silver (or gold) from the unreeded coins of the pre-industrial era practiced by individuals, NOT governments, who had no need to steal shavings from their OWN coins --- they could, and did, just use proportionately less silver (or gold) in the coins in order to debase their precious metal content while trying to pass them off at their same face value.

Exponentiality had NOTHING to do with the Roman currency collapse of the 3rd century --- debasement as a direct result of chronic governmental (and societal!) overspending and indebtedness did.

Landotfree's picture

"Exponentiality had NOTHING to do with the Roman currency collapse of the 3rd century"

You call me names and you say the above.   It has everything to do with it as they were unable to exponential growth they attached interest to their medium of exchange.  Their currency did not collapse their system did.

akak's picture

Landotfree, you know, personally I like to be at least somewhat well-versed on a topic before publicly commenting or expounding on it, lest I make ignorant statements and claims that might later prove embarrassing.  But I guess that is just my own preference.

You clearly have no idea what you are blathering about here.  There was NO debt attached to Roman currency whatsoever, as there is to our fiat currencies today, as the Romans did NOT issue bonds, fiat currency, or otherwise engage in long-term governmental debt as we know it today.  Expenses in a given year had to be paid in that year, period.

Hacked Economy's picture

Go easy on Landotfree, akak. He's incorrect, but at least he appears to WANT to be informed on the subject, so let's help him out a little.

Some coin-clipping did indeed occur, and it was part of the overall process of coin debasement over a 200-or-so year period, but it alone wasn't responsible for the eventual fall of Rome.  The truth is that a number of factors led to the eventual "sacking" of Rome in the early 5th century, and I'm sure many here on ZH know what those are.  In a nutshell, the early Roman Empire (just before the time of Christ) was a true war machine in expansion, but had more or less reached its maintainable limits by the 3rd century.  The former glories of Roman conquest had faded, and the Caesars and Emperors were engaging in personal projects that required tons of money that the declining revenues (loot from conquered enemies) couldn't support anymore.  So they began raising taxes on their own people, clipping coins (to a degree), changing the metalurgical content of their coins to cheaper substances, etc.  Inflation began to creep in, and the masses eventually became angry when they realized what was happening.

To appease the masses, the rulers diverted attention from the problem(s) by providing immediate relief and entertainment for short-term political survival.  And this is where the term "bread and circuses" comes from.  Much like what's happening today (Obamaphone! DWTS!!)

As the economy became fragile and the social structure began to show signs of crumbling, many people simply left the cities and moved out beyond the Empire's borders (into the Barbarians' areas) to escape the taxes and confiscation.  Even the soldiers in some areas deserted their posts.  By the time the Visigoths ventured down into Rome in 410 a.d., the city was only a shadow of its former glory, and easily conquered.

Bread and circuses, people.  Please don't look behind the curtain...move along, move along...get your EBT card on the way out.

Captain Kurtz's picture

There sure was.  The ability to mine that silver was gained through the practice of Nexum.  Furthermore, funds used for military expansion came at a price, despite the booty which assuredly was marginally declining as enemies became smarter and ironically less abundant.  What im getting at here is basically dont be so negative towards someone trying to participate just because he or she may not abide by your textbook or interpretation of something that nobody on this blog personally witnessed (not that if they did it would change anything).

Tango in the Blight's picture

I have a Roman denarius from the reign of Emperor Trajan (who ruled from 98 to 117) which contains about 3 grams of silver. I payed 10 British pounds for it on eBay (about 16 US dollars).

About a century earlier some guy named Judas was paid 30 denarii for betraying his friend Jesus. So he was paid about 300 GBP for it. Yah right, I guess silver was worth much more in those days. I guess there wasn't a Blythius Masterius in the Roman Empire.


CPL's picture

Money then was not nearly as common as barter was.  The majority of the people around might save 4 denarius in their lifetimes.  Obviously they made it because we are here by hook or crook.

Diogenes's picture

And it was the denarius that evolved into the penny. The first pennies were made of silver, about 1.5 grams of it, worth about 1 British pound today.

Back then there were 240 pennies to the pound of silver. So, since 1300  the British government has clipped 239/240ths of the value of their currency.

And that is the lowest rate of inflation of any country. Most other places, the currency has gone to zero several times.

akak's picture

Landotfree, respectfully, you do not know what you are talking about.

The silver denarius of the Roman Empire was steadily debased (diluted with copper, to be exact) in the 2nd and 3rd centuries, as the empire faced chronic financial shortfalls due to their massive military spending and payments to India, Arabia and China for imported luxuries (hmmm, sound familiar?). 

Eventually, Roman silver coinage, and the money economy itself, almost ceased to exist, as the Roman state took over more and more economic power via direct control of the means of economic production and distribution, while forcing millions into servitude and outright slavery via increasing and onerous taxation (again, any of that sound familiar?).

Captain Kurtz's picture

in the 2nd and 3rd centuries, as the empire faced chronic financial shortfalls due to their massive military spending and payments to India, Arabia and China for imported luxuries (hmmm, sound familiar?)


No it doesnt sound familiar.  The dilutive effect of QE is not endogenous, it's exogenous.  Meaning as the FED buys newly printed bonds, the bonds held by the Chinese, Japanese et al. are DE-VALUED not inreasing.  Plus we're not really exapnding our empire right now...




"the Roman state took over more and more economic power via direct control of the means of economic production and distribution while forcing millions into servitude and outright slavery via increasing and onerous taxation (again, any of that sound familiar?)"


Please elaborate, the last time I checked the was a big huha about the govt taking PARTIAL ownership of GM, thats a far cry from owning means of production


Maghreb's picture

If you can legislate entire sectors of the economy out of existence by making them uncompetitive and then buy them up with tax payer/printed Fiat you can take over the entire means of production very very easily. Don't follow the legislation and you get shut down and put in prison, can't compete and you go out of buisness. The Independent existence of the private means of production is becoming more and more contingent on political institutions every day.

British East India company is a very good example. Private buisness that to remain profitable had to take over a big chunks of India. After shit got out of hand during the Sepoy Rebellion the crown effectively took over India and made subjects of hundreds of millions of people by extreme use of violence. This is why there needs to be a strong divide between private and public institutions.


centerline's picture

There were also other issues.  Religion played a role to some degree - although my memory of cause and effect as well as timing is bit rusty.  There was also an issue of social complexity... systems that became fragile as a result of this.  Quite a few parallels to modern times.

F. Bastiat's picture

And the faith and confidence in the regime of Frank Marshall Davis Jr. equates to?

Nostradamus's picture

Since context is something you seem to ignore, I'll rephrase that statement to "Hyperinflation of the U.S. dollar will collapse the economic system of the U.S. and, by extension, the entire Western world."  Continued credit expansion will eventually result in a total collapse in the purchasing power of the currency.  A total collapse in the purchasing power of the currency is currency hyperinflation.  A society in which the currency has hyperinflated will experience an abrupt and catastrophic decrease in economic activity. 

Landotfree's picture

"Continued credit expansion will eventually result in a total collapse in the purchasing power of the currency."

Without credit expansion the system will collapse as you still owe the interest for which the credit was never created.   It's a one way system.  What you are suggesting is a collapse.  

The system demands expansion, without expansion it starts to collapse... that is what happened in late 2007.   Lehman would have been allowed to BK and the ATMs would have stopped working the next day.  Of course the currency will become worthless but not for the reasons you specify, you are focused on the symptoms prior to collapse and not the problem.   The problem is simple, if you attach interest to the medium of exchange you'll be lucky to get 60-80years or a generation.  

I dare 20% of the US population go to the bank tomorrow and try and withdraw all their money, the banks will be closing the doors at 9:15am for a lack of federal reserve notes. 

LawsofPhysics's picture

"The system demands expansion, without expansion it starts to collapse... "


The corrupt man-made eCONomic system does.  Good luck with such things in the physical world.  Ask yourself, why does Nature always win and continue on?  It does so because there are real consequences for bad behavior or irresponsible choices.

Wake us, when such laws return to the bogus monetary and fiscal system we have now.  When they do, prosperity will return, not before.

Landotfree's picture

"It does so because there are real consequences for bad behavior or irresponsible choices."

I agree.

LawsofPhysics's picture

Numerous people and sites have been very concise in pointing out precisely who and what entities have profitted from the bubbles on the way up and the way down via the regulatory capture they have over the people's  "representation".  Execute these people publicaly and watch "markets" stabilize.  Unfortunately, I must use quotations since the "mark to fantasy" accounting gimmics must also be destroyed before you see the return of true price discovery.

F. Bastiat's picture

The "Gods of the Copybook Headings" can only be denied for so long.

dmger14's picture

True.  The catalyst will be loss of confidence, leading to velocity as foreigners and US citizens alike spend money to get something real for it before it's purchasing power diminishes further, leading to more inflation and a self-reinforcing collapse in value/rise in general price level.  If you cut workers' pay by 10%, they'll throw bricks through your window.  But inflate the money supply 10%, and most won't even know what happened.  That monetary inflation, chosen as the path of least resistance and the way to keep things "normal" as long as possible, will lead to foreigners kickstarting the velocity as they spend dollars back into the US, which will awaken the sheeple here and be hard to dial back.  With constant debt to be issued and rolled over, the Volcker bullet to control inflation no longer exists.

LawsofPhysics's picture

History shows that you are correct over and over. When supply lines break, shit gets real, not before.  Yes please, go ahead, rise rates, I double dog dare you motherfuckers.  

Hacked Economy's picture

Yeah, that's what concerns me.  Not a comet or some zombie-virus, but something as realistic and probable as a supply-line breakdown.  Remember when fuel prices skyrocketed back in 2007 and diesel in Europe reached the equivalent of US$ 11.00 per gallon?  Truckers went on strike all over the map and simply refused to deliver goods until the .gov would step in to (artificially and stupidly) bring prices back down.  The movement of distributed goods slowed down and consumers grumbled.

We've all said it before, but it bears repeating:  When people will trample each other (or shout death threats like the "I'll stab you" idiot this year) for some made-in-China junk they don't need, imagine what'll happen when there's a serious economic rumble and just 10% (!!!) of the trucks shut down.

Calmyourself's picture

Exactly, supply chains, if you want a sign, a signal to batten down the hatches make friends with a truck driver.  When the supply chain gets sticky, habitually late deliveries, no loads for trucks or no trucks for load you should get concerned.  Hyperinflation is simply a psychological phenomenon in which ordinary people realize their money is fiat and panic and will exchange more than normal in a bidding type process.   Governments choices are limited by that point.  The current administration will eventually realize their war on the productive of any income level will backfire. Timeline, your guess is as good as mine...

cranky-old-geezer's picture



(sigh) How many times do I have to explain this?

Inflation and deflation are monetary terms, not economic terms.

If the economy is expanding, that's the correct term, expanding, not "inflating".

If the economy is contracting, that's the correct term, contracting, not "deflating". 

Using inflation and deflation when describing the economy just confuses people. 

Don't feel bad though, PhD economists use those terms incorrectly.

The housing market isn't deflating, it's contracting.  Falling home prices isn't deflation, it's just falling prices.  "Collapsing" might be appropriate in places like Detroit.

Bonds losing value isn't deflation, it's losing value, or "collapsing" if value is falling fast ...what happened in '08 incidentally.  MBS started collapsing in value, not "deflating".

If a stock drops in price, nobody says the stock is deflating, they say the stock (price) is falling.

Severe economic slowdown isn't deflation, it's depression. 

What we have now is inflationary depression.  Inflation (currency) during an economic depression.  Wild out-of-control currency printing (and debasement) creating artificial buyers (the Fed) trying to keep the bond market from collapsing, while the underlying economy IS collapsing, ok, just shrinking (not "deflating").

Yes we can see hyperinflation during an economic depression.  That's what happened in Wiemar Germany ...and Zimbabwe too.  Massive currency printing trying to make up for falling economic activity.   Well, not actually, more like massive currency printing to fund rapidly escalating debt, which grew more rapidly as the currency lost value, a vicious escalating cycle that goes parabolic.


akak's picture

Thanks, Cranky, for your lucid and on-point post.  I too get riled up every time I hear or read some moron glibly misuse, misunderstand, and muddle the terms "inflation" and "deflation".

cranky-old-geezer's picture



Thanks akak. 

Gosh, that handle reminds me of "Mars Attacks" :)


akak's picture


The first time I ever saw anyone actually shoot food from their nose while laughing was during the movie "Mars Attacks".

Ack ACK ack ack, ack ack ack ACK ACK!

johnQpublic's picture

what scares me is that no one with the ability to actually do ANYTHING, actually will

and once everything is completely broken, in attempting to patch it up, will somehow manage to make it worse


and at some point during all of this underwear theft in attempt to prop up the system which has always been broken, will manage somehow to institute ever greater theft from the common man, and ultimately totalitarianism

thats what the fuck i'm worried about


steal underwear--->totalitarian state...ftmfw

Umh's picture

That is why I retired. I don't know about Galt, but if all hell is going to break loose why be shoveling coal into the engine of destruction.

alangreedspank's picture

Of course CBs want you to hear about inflation when they are busy coming up with all these inflation calculations that ignore actual inflation.

Hacked Economy's picture

I have no idea what you wrote in your comment, and I have no interest in even looking.  I simply saw your animated avatar and busted out laughing.  I get an image in my mind (a rather unpleasant one, but hey) of you doing the same thing naked at your keyboard while reading everyone's posts here.


ZeroAvatar's picture

LOL, alangreedspank, I just saw the 'Johnson' for the first time...............

LostAtSea's picture

Yea, who would ever question the worthiness of a single plantinum coin, with $1 TRILLION stamped on it. It's worth that....right? right???


Umh's picture

It's like that heavy pocketful of gold Matt Nesto spoke of in his dreams.

Seer's picture

1) All fiat dies;

2) There will always be something else that people find as an alternative (as long as they are alive);

3) Growth WILL end (well, it has already ended, what hasn't yet occurred is people understanding this fact).

I think that people KNOW what matters.  We ought to stop pretending that we can avoid the realities and get on with taking care of business (and I'm really hoping that we move forward with the clear understanding that perpetual growth on a finite planet is a BAD idea/system).

johnQpublic's picture

infinite growth

finite planet


+1 seer

dougngen's picture

the solution to your math problem

infinite growth +finite planet/wholesale destruction and death=

more infinite growth

Diogenes's picture

finite planet + human inventiveness => doing more with less => progress => growth without limit NOT infinite growth.

Compare 1912 Model T, cost $850 or one year's pay for a working man, 4 passenger car, top speed 40 MPH, cruising speed 25, 17 MPG. Usually worn out after 5 years or 20,000 miles.To modern economy car, $15000   4 passenger, top speed 110, cruising speed 70, 40 MPG. Usually worn out after 20 years or 200,000 miles. Also infinitely safer, more comfortable, etc etc.

It should be possible to live  better than we did 100 years ago while consuming less than 1/2 the energy.

Peter Pan's picture

The fuel for hyperinflation is money printing on a large scale but the spark that ignites that fuel is a widespread and sudden loss of confidence in paper currency.

People are simply not aware of the massive amounts of debt out there that do not attach to anything of real value or which attach to assets of severely diminished value.

Thank God the masses are concentrating on short term survival and entertainment because if they ever woke up to what the long term outlook is like there would be bedlam.

Walter_Sobchak's picture

tout va bien aujourd'hui que c'est notre illusion

cranky-old-geezer's picture



sudden loss of confidence in paper currency.

It can be sudden, but it can be slow loss of confidence too, sorta like what's happening now.

Yea I suspect the Fed will drag this out long as possible.  A slow disgusting slide, currency slowly losing value, till it goes parabolic right at the end, and that's when you know it's the end.

People are simply not aware of the massive amounts of debt out there

They don't need to be aware of it.  They're well aware of (rising) prices at the grocery store.  That's what really matters.

They may not know what "inflation" means.  But they're experiencing inflation as we speak. 

They may not know what "hyperinflation" means.   But they'll experience it eventually.


hoos bin pharteen's picture

The "alternative" people would turn to, even in a one-fiat currency world, would be hard goods.

cranky-old-geezer's picture



Yes, it reverts back to barter with hard goods, and governments hate barter because they can't track it and tax it ...why I believe a cashless society is coming ...which still won't stop barter, it'll increase barter actually ...and they'll try to criminalize it of course.

It just hit me.  That's where this is all heading.  Some sort of worldwide SDR system after USD collapses, likely blamed on counterfeiting (when the Fed is doing all the counterfeiting).  

There's no SDR paper currency nor coins, it's all electronic. 

Damn, that's gotta be where this is all heading.

It explains why big banks are selling all the trash paper to the Fed they can, filling up those reserve accounts with dollars.   There's gonna be a currency exchange at some point, dollars for SDRs (or whatever the new cashless currency is).  That's what those trillions of dollars sitting idle in those reserve accounts is for.

Damn, I just figured it out. 

And anyone who doesn't have a million dollars to exchange a thousand to one for the new cashless currency is gonna be SOL.

Yep, the Fed will end alright, dollars will disappear from the scene, but we'll all be paupers instantly when it happens.  Poof, just like that.