Rickards Exposes The Elite's Plan To Freeze The Financial System

Tyler Durden's picture

Authored by James Rickards via The Daily Reckoning,

Today’s complacent markets are faced with a number of potentially destabilizing shocks.

Any one of them could potentially lead to another financial crisis. And the next crisis could see draconian measures by governments that most people are not prepared for today.

You’ll see what I mean in a moment.

But first, what are the catalysts that possibly trigger the next financial crisis?

First off, a debt ceiling crisis is just over a month away. If the ceiling isn’t raised by Sept. 29, the federal government is likely to default on at least some of its bills.

 

If a deal isn’t reached, it could rock markets and possibly trigger a major recession.

 

Given Washington’s current political paralysis and intense partisan infighting surrounding President Trump, it’s far from certain that a deal will be reached.

 

Second, despite some official comments over the weekend downplaying the odds of a war with North Korea, a shooting war remains a very real possibility.

 

North Korea’s Kim is determined to acquire nuclear weapons that can threaten the lower 48 U.S. states, and Trump is equally determined to prevent that from happening.

 

Third, a trade war between the U.S. and China seems imminent.

 

Trump has backed off his campaign pledges to label China a currency manipulator and an unequal trading partner.

 

But Trump (and Bannon most recently) have made it clear that they are in an "economic war" against China for who will be hegemon 25 years from now.

 

China would likely retaliate, and that could ultimately result in a 10–20% “maxi-devaluation” of the yuan, perhaps by early next year.

 

That would likely cause a stock market rout. Since China devalued in August 2015, markets fell hundreds of points in single sessions. And that was a much smaller devaluation, less than 2%.

And if markets collapse from either of these scenarios — which is entirely possible — governments will move dramatically to contain the damage.

In my book The Road to Ruin, I discuss a phenomenon called “ice-nine.” The name is taken from a novel, Cat’s Cradle, by Kurt Vonnegut.

In the novel, a scientist invents a molecule he calls ice-nine, which is like water but with two differences. The melting temperature is 114.4 degrees Fahrenheit (meaning it’s frozen at room temperature), and whenever ice-nine comes in contact with water, the water turns to ice-nine and freezes.

The ice-nine is kept in three vials. The plot revolves around the potential release of ice-nine into water, which would eventually freeze the rivers and oceans and end all life on Earth. Cat’s Cradle is darkly comedic, and I highly recommend it.

I used ice-nine in my book as a metaphor for financial contagion.

If regulators freeze money market funds in a crisis, depositors will take money from banks. The regulators will then close the banks, but investors will sell stocks and force the exchanges to close and so on.

Eventually, the entire financial system will be frozen solid and investors will have no access to their money.

Some of my readers were skeptical of this scenario. But I researched it carefully and provided solid evidence that this plan is already in place — it’s just not well understood. But the ice-nine plan is now being put into practice.

Consider a recent Reuters article that admitted elites would likely shut down the entire system when the next financial crisis strikes.

The article claimed that the EU is considering actions that would temporarily prevent people from withdrawing money from banks to prevent bank runs.

“The desire is to prevent a bank run, so that when a bank is in a critical situation it is not pushed over the edge,” said one source.

Very few people are aware of these developments. They get a brief mention in the media, if they get mentioned at all. But people could be in for a shock when they try to get their money out of the bank during the next financial crisis.

Think of it as a war on currency or a war on money. Even the skeptics can see how the entire financial system will be frozen solid in the next crisis.

The only solution is to have physical gold, silver and bank notes in private storage. The sooner you put your personal ice-nine protection plan in place, the safer you’ll be.

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Bigly's picture

This is ZH. We already know this....

 

SubjectivObject's picture

then get some newbies in here

Bigly's picture

Unfortunately, I am surrounded by commies. They do not seem to be receptive to truths..

Belrev's picture

If the debt ceiling is not raised, then the folks in the establishment stop getting their payments for their over bloated governmnet contracts. Can't see that happenning.

False_Profit's picture

Let's rip this bandage off and dress this wound correctly! We owe it to our progeny!

Theosebes Goodfellow's picture

~"The only solution is to have physical gold, silver and bank notes in private storage. The sooner you put your personal ice-nine protection plan in place, the safer you’ll be."~

Why in heaven's name would you keep your money any other way? Because you trust them bankers to "treat you right" or "protect your interests"? Are you really that naive? Ever seen a Cypriot haircut?

French Bloke's picture

"If regulators freeze money market funds in a crisis, depositors will take money from banks. The regulators will then close the banks, but investors will sell stocks and force the exchanges to close and so on."

So why would investors sell stocks f they can't get their money from the banks?

I digress, Rickards is near the mark. If money markets are frozen, everything is kaput. Pretty basic really. But worry not, there is no way they won't raise the debt ceiling. It's just a show. And the magic of it is they'll keep us all on just enough of a lifeline that we'll have minimal subsistance so that real (sic. govt reported) inflation stats never rise, despite the reality of esserntial commodity price rises for the majority of the population. This is how it's been playing out for years and to think of not raising the debt ciling would only hurt the elites whilst raising it only hurts the rest of us. Ain't gonna happen (as they say in the US)

yvhmer's picture

It is the typical bankster money contraction scheme over and over.

I do see a few steps that might make things less apocalyptic, though.  The little guy basically lives from paycheck to paycheck.  In many European (Eu) countries,  monthly wages are paid into one's bankaccount. Most of the groceries and daily errants are paid cashless cashless, by ATM card.  The currency involved never leaves the system. 

In Greece, for Greek nationals that is, there was a limitation on how much cash they could retrieve in one week, 50 bucks or so. Taking these two together, I surmise that things will run on, and have a bit of a trouble seeing how all the shops will be closing.

What poses a danger in such a scenario is the interbank lending. Some banks may turn out less trustworthy and interbanklending starts grinding and runs on lower levels. The crisis of 08, also saw this happening.

So, I would submit, that the real effects depend on how cashless the society you live in, potentially can be, with the spread of cashless infrastructure in mind.

As for broker accounts and bank balances over 100k and stuff, yeah, a cypriotic haircut may be pack and parcel of the way forward, however, the question remains what the setting of the limits will be. Like in Cyprus, the < 100k accounts, did not see a haircut.

Bail- ins may be employed by some banks. But I am not so sure that every account will be touched, depending on the limits. As a responsible government,  meaning those in government guarding their own hide, would like to evade angry mobs out on a prowl armed with rope, tar and feathers.....

youngman's picture

I personally think there is so much anger in Washington that it will not be raised....this is were we crash...

Billy the Poet's picture

I have a paperback copy of Cat's Cradle in private storage. Will that help?

new game's picture

a sho box full of jacksons. can we do that? racist or sumtin (im doin wrong).

fuken cok suken fuk faces..

Mr 9x19's picture

i call it the funnel syndrom.

at the top, easy flow  in,  liquids go down, at the end the flow is perfectly regulated.

applied to restrictions, at the begin, you have different way to manipultate money. the more  you go down the funnel, the less liberty, less control you have, no free direction.

when you are forced in one hand to make deposits, use bank accounts, be tracable ( eventually, private life omited, still functionnal ) it is ok, but when in the other hand they tell you gonna have a possible loose of the control of your money, they would be able to take directly inside the accounts, and if the system  stops, money is frozen, you are becoming a money hostage.

the more control about money, the flow is reducing, til it only gives drops per drops, then dry out.

it is invevitable, by conception.

webmatex's picture

No money from bank - no shops open - no food to buy  - no welfare cash - death for many - civil unrest  = very good policy decisions and payrise rewards for Draghi and co.

This aint economics, this is genocide.

N2OJoe's picture

A few less libtarded Useless Eaters never hurt anyone.

Suleyman's picture

If it is not raised, it will be raised anyway ......

JRobby's picture

The newbies are life sucking trolls on an allowance

small axe's picture

OMG the end is nigh we're doomed!

Happy?

Bigly's picture

? Are you nuts?

I do not want a financial collapse but it is baked in given the govt, FED and TBTF bank actions over the last 10 years.

Timing and severity are the questions....

Proofreder's picture

Even if it's really the end of the world,

as we know it ?

peopledontwanttruth's picture

September 29, almost the same date as the Battle of Opis right before Babylon fell a month later

https://en.m.wikipedia.org/wiki/Battle_of_Opis

Time will tell

ExplodingEntropy's picture

Well there is gold down here in the mines of the comment section. 

peopledontwanttruth's picture

Time will tell

Ecclesiastes 3:15
GOD’S WORD Translation (GW)

15 Whatever has happened in the past is present now. Whatever is going to happen in the future has already happened in the past. God will call the past to account.

SubjectivObject's picture

translation:  humaniacs in, humaniacs out

justa little bit of history repeating

https://www.youtube.com/watch?v=yzLT6_TQmq8

peopledontwanttruth's picture

Funny how people will quote man that history either repeats itself or at least rhymes, but when it comes to God saying it because He can actually make it happen they are insulted or mock???

"One can deny the truth but the truth will not deny you"!

 

detached.amusement's picture

Translation: Chosenites move to fulfill their own prophecies

Golden Showers's picture

That's right: This is ZeroHebes god dammit!

Um, er, wait: I was talking about Hebbian theory... Honest Engine.

https://en.wikipedia.org/wiki/Hebbian_theory

Hedge: Zero. Hedge. Ok. Back to reality.

ReasonForLife's picture

He forgot to mention Cryptocurrencies as a safe haven, can't freeze that either.

syzygysus's picture

Wait, who controls the dns servers and has an Internet kill switch? You don’t think that’ll get managed just a little bit? If you can’t route by name or IP what kind of safe haven do you have...

Oh a frozen one...

DC Beastie Boy's picture

Bitcoin and all the altcoins will save you.  Most reailers now take crypto!!!!

SILVERGEDDON's picture

Fonestar's illegitimate child, the dour fuck face tmosley will be by any minute now. 

tmosley's picture

>He said, more than an hour after tmosley started posting in theis thread

Forever behind the times. I'm sure you'll sell your silver at the bottom and buy crypto at the top.

zipit's picture

Wha he means is, "Bitcoin, Bitchez!"

tmosley's picture

Peanutz had best stock up on crypto, and retailers had best order crypto-compatable POS systems.

FreeShitter's picture

BCH comin on like a boss

tmosley's picture

Yeah, what's up with that? Haven't seen any news or even any discussion about it.

Guess I'm glas I held on to mine.

BadLibertarian's picture

>Yeah, what's up with that? 

Hard to know for sure, but there is a difficuly reset coming up that will make mining the chain more profitable (at least for a while) plus recent continued spam choking the 1mb BTC chain.

MANvsMACHINE's picture

It was evident at $320 this morning. BCH was stuck at $300, like ETH, for over a week now. Once a real move was detected, it was time to buy.

I thought about selling mine last night to add to my NEO position but refrained. Thank god. $550 now.

OpenThePodBayDoorHAL's picture

Wait, what? There's more than one Bitcoin?

LOL

Wait until Bitcoin #2001 comes out, yeah that'll be worth alot I'm sure.

Wake me up when they fork the periodic table of elements, I'll take element number 79X

3LockBox's picture

Yeah because they don't have a plan for cryptos or it is the plan.

And before you say it...yeah sure they have plans for the metals.

But you don't need to put your fingerprints all over the internet and 40 oz of Au can be placed outside the system very well.

tmosley's picture

Everybody has a plan until they get punched in the mouth with a $4000+ bitcoin price.

3LockBox's picture

Yeah I can see you bumping around after the collapse with your useless trezor in your hand.

"Can I pay with some digits?

They will be worth so much when everything gets restored!"

In the meantime the metals will be proven once again to be the most superior form of money.

Thousands of years seems to build up a pretty nice reputation.

Good luck.

tmosley's picture

Hahaha, I can see you whining as life goes on "Why didn't the world fall apart!!!?? The world was supposed to fall apart!!!!!!!!"

Death worshippers get cucked 100.00000000% of the time. Enjoy the doomboners while they last.

ReturnOfDaMac's picture

Where's the kaboom? There was supposed to be an earth shattering kaboom ... the illudium Q36 explosive space modulator, that creature has stolen it!

https://www.youtube.com/watch?v=3fcaXmpZydI

Jimbeau's picture

I was gonna upvote you, but you had to wreck it with the link...

ReturnOfDaMac's picture

Thanks anyway, I loved Marvin as a kid!

BadLibertarian's picture

I'd stay away from the Trezor. If someone gets physical access to it, it's not secure. Bad design.

Father ¢hristmas's picture

Surely the gubmint will not impose draconian regulations on Cryptos in the event of the implosion of the dollar.

If there is one thing history has taught us about gubmint, it is that they treat crises and "unforseen" events as completely isolated incidents without ever considering they may be opportunities to restrict freedumbs.