The 'Big Reset' Is Coming: Here Is What To Do

Tyler Durden's picture

A week ago, Zero Hedge first presented the now viral presentation by Raoul Pal titled "The End Game." We dubbed the presentation scary because it was: in very frank terms it laid out the reality of the current absolutely unsustainable situation while pulling no punches. Yet some may have misread the underlying narrative: Pal did not predict armageddon. Far from it: he forecast the end of the current broken economic, monetary, and fiat system... which following its collapse will be replaced with something different, something stable. Which, incidentally, is why the presentation was called a big "reset", not the big "end." But what does that mean, and how does one protect from such an event? Luckily, we have another presentation to share with readers, this time from Eidesis Capital, given at the Grant's April 11 conference, which picks up where Pal left off. Because if the Big Reset told us what is coming, Eidesis tells us how to get from there to the other side...

First of all, what is systemic risk?

Typical Systemic Risks:

  • Wide-spread defaults, sovereign debt crises, devaluations, capital controls, bank holidays, etc.

How it usually happens:

  • No warning;
  • Emergency announcement over a weekend;
  • Drastic measures to “protect the public” against [insert suitable culprits];
  • Outcome- someone’s value gets expropriated.

Yes, it can happen here –it has in the past.

Usually, the best warning indicator of a major systemic "event" are soaring cross-asset correlations: something we are experiencing right now.

  • Crisis of 2007-2009 was a “High Correlation” disruption:
    • Multiple institutions and majority of the population were affected.
  • Reducing systemic risk called for lowering correlation, i.e. “firebreaks”, de-coupling, etc.
  • Instead, governments’actions since 2008 have been increasing correlation:
  • Fiscal Policies –sovereign debts are higher than ever and still growing fast;
    • Monetary Policies –broken price mechanism = system-wide misallocations and mispricings;
    • Too-Big-To-Fail –bigger than before the crisis;
    • Euro Zone Crisis –“solutions” keep increasing interconnectedness – a “mutual suicide” pact;
    • Financial Regulation –was supposed to reduce the risk but stalled through stiff opposition:
      • A single JP Morgan trader is reported to run $100 bln CDS book?!?!?!?!?! [ZH: now confirmed, and we all know the story since]
    • Lack of Transparency –more opacity since the crisis; mark-to-market remains suspended.

Everyone knows this but only few are willing to accept the implications; fewer still are willing to act.

What are the key systemic risks:

  • The already unfolding crises:
    • The Euro zone, Argentina.
  • Redistribution of wealth:
    • ZIRP –Taking from net savers for the benefit of net debtors.
    • Inflation targeting –Debasing debts at the expense of savers and bond holders.
    • Pending tax hikes for top earners.
  • Financial Marshall law:
    • FBAR and FATCA raise penalties and tighten reporting on all financial assets held offshore.
    • Argentina –Currency controls; “Dollar-sniffing”dogs at the airports and border crossings.
  • Governments co opt banks to police the assets within the system:
    • FATCA - all foreign financial institutions to report on all US customers or face 30% withholding.
    • Swiss banks have been firing US clients; deal on reporting is inthe works.
    • Swiss banks have agreed to report on their German and UK customers’accounts.


What to look for:

  • There are always losers and winners –many more losers than winners.
  • Majority has “normalcy bias” – tendency to underestimate risk of disaster.
  • Only a few heed the risks and make proper contingency arrangements.
  • Historically, financial disaster preparedness has enabled accelerated wealth creation.

Systemic Insurance is the only way to protect wealth from “High Correlation” events.

But more than anything, the one biggest giveaway is near endless complacency: the more the pros exhibit it, the closer we are:

  • Western economies have enjoyed V-shaped recoveries and domestic peace for over 65 years.
  • Mainstream investors have never experienced a “reset” or repression, financial or political.
  • Disdain for history and post-WWII Western exceptionalismunderpin collective hubris:
    • "There can be few fields of human endeavor in which history counts for so little as in the world of finance.Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of the those who do not have insight to appreciate the incredible wonders of the present.” - John K. Galbraith

Complacency is misplaced – despite apparent normality, the risks are high and growing.

One simple example of the true cost of systemic risks in vitro:

  • Analyze This: Crisis of September 2008 Without The Bailouts = ? $$,$$$,$$$,$$$,$$$

What's the big deal: they bailed us out before, they will do it again.

Wrong: "Due to massive new debts and politics governments’ capacity for future bailouts is limited."

Which means that systemic hedges should be used by everyone. At what cost though:

  • Price of Systemic Insurance = Probability of Disruption X Potential Loss Severity

As Eidesis notes: Insurance is cheap whenever consensus under?estimates the Probability of Disruption.

Or, worse, when the status quo is artificially keeping the price of systemic insurance low to prevent the general public from realizing just how precarious reality truly is. Remember:

  • "When it becomes serious, you have to lie" Jean-Claude Junker

So if we are handed cheap insurance options, where should we be looking? Long-time Zero Hedge readers likely already know the answer:


  • Ideal Attributes – Valuable, uniform, divisible, portable, storable.
  • No One’s Liability–Physical form, unlevered, non-financial custody; no reliance on capital markets.
  • Multiple Exit Strategies – Diversity of buyers; ability to exit via different currencies.
  • Geographic Diversification ? The only feasible way to manage sovereign risks.
  • Flexibility – Ownership arrangements must be actively managed to address evolving conditions

Exposure to Safe Haven assets via financial instruments IS NOT Systemic Insurance


  • Proven Safe Havens for preserving value through the “trough” of a crisis:
  • Real Estate – “Real” but immovable; not uniform, usually owned with leverage; easily taxable.
  • Diamonds – Valuable, portable and storable but neither uniform nor divisible.
  • Art, Antiques, Collectables – Issues with subjective valuations, authenticity and provenance.


Which leaves...

  • Precious Metals can preserve value through a crisis AND provide liquidity during a crisis:
  • Silver–“Poor Man’s Gold” but impractical for large sums.
  • Platinum –The bullion is not as readily available as gold.
  • Palladium –Somewhat esoteric.

GOLD –Always liquid, widely available, universally accepted, deepest markets, global pricing

Gold – 2,500-year unbroken track record of liquidity and “Safe Haven” performance.

But don't take our word for it... Or that of Eidesis. How about that of... the Federal Reserve:

Here is the FRBNY explaining why people own gold:

  • “For centuries, gold had a profound impact on history, as a symbol and a storehouse of wealth accepted universally around the world.“
  • “When people are worried about political instability, war or inflation, they often put their savings into gold.”
  • “Gold functions as a medium of exchange, particularly in areas where currencies are distrusted.”

Why the US government nationalized gold:

  • The 1933 prohibition against gold ownership “prevented hoarders from profiting after Congress devalued the dollar (in terms of gold)”by 41%.


What else does the Fed tell us:


  • “As of early 2008, the Fed’s vault contained roughly 216 million troy ounces of gold“–“about 22 percent of the world’s official monetary gold reserves.”
  • “The United States owns approximately 27 percentof the monetary gold”–“262 million troy ounces as of 2007.”
  • “A majority of [the U.S.] reserves is held <…> at Fort Knox, Kentucky, and West Point, New York. Most of the remainder is at the Denver and Philadelphia Mints and the San Francisco Assay Office.”


Which means that as we approach the date with the Grand Reset which Raoul Pal predicted could come as soon as the end of the year, and which Soros has as under 3 months and counting, there is only one question:


Do You Have Systemic Insurance?


Full Eidesis Presentation:


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Withdrawn Sanction's picture

The FED has been continually printing for years now. They just don't admit it, and easily deceive the sheeple. Those who don't think the FED is printing are naive.

Indeed it has been.  And naivte and deception of course are explanations for the failure to perceive the increased money supply.  An alternative explanation that is also consistent w/the facts is all that newly created money is going exactly no where.

In other words,  excessive money creation and rising prices are supposed to go hand in hand (acc. to the hydraulic version of the quantity theory of money), and yet price increases have not been in proportion to money increases.  Part of this lack of correspondence of course is duplicitous calculation of price measures like the CPI (see John Williams for more on this).  But an important part also is plunging velocity; i.e., the willingness of people to spend the money they have.

Remember too that a critical component that is overlooked in the  standard QTM is the mechanism by which prices rise.  I am referring here to the bank lending channel (or credit/money/deposit multiplier).  Since a good portion of spending rests  on credit availability, the lack of credit will depress spending, which brings us to the key point:  Despite trillions in bailouts, special lending facilities, and suspension of mark to market rules, banks still refuse to lend.  Less lending, less spending.

I am not suggesting that slowing velocity and tighter lending by banks is not the right approach.  In fact, policies designed to stimulate lending/borrowing are counterproductive.  Im simply trying to explain why despite monumental Fed printing, we're still stuck in financial quicksand.  Quite simply, the system needs to be purged of bad debts and criminals need to go to jail.  Cleansing and retribution (which is redundant, I realize).

Seer's picture

ALL fiat collapses.  As has been repeatedly pointed out here, gold NEVER goes to zero.  So... what's at a crossroads is not gold, but fiat (and history tells us which road it will take).

dbomb12's picture

Really now, when the USD is on par or less than the ZWD then which will they take, Mabye not a sliver of gold but defintily a silver dime quarter or half dollar which is still an accepted currency

Teabunny's picture

that only works on gold, soft metal...imprints. silver is by taste...pearls by how rough they are when slid over teeth enamel (oyster tears do not form a uniform surface) 

Dr. Sandi's picture

Damn, now there's a 3 course meal I could enjoy!


Uber Vandal's picture

Have you also tried to pay for your goods at Wal-Mart with shares of AAPL, PCLN, NFLX, GRPN, or FB?

There is way too much stock focus outside of here.

EvlTheCat's picture

Haters going to hate, no matter what.  Could care less.  I probably have more gold at the bottom of an untold lake then most here, but when you see a speed bump article, call it for what it is.

Let's start talking about how to apply gold/silver as fucking money and then these goose egg articles will start meaning something.  See Max Keiser for a reference Tyler.... At least he doesn't hide behind a pseudonym and actually tries to get the ball rolling!


Al Gorerhythm's picture

 At least he doesn't hide behind a pseudonym and actually tries to get the ball rolling!

The irony. The irony.

Vendetta's picture

Offer some gold to a rancher for a steer and I'll bet he would consider it fair trade and be happy to do it.  Difference between a rancher and walmart clerk I would guess.

Calmyourself's picture

Good point CIO, I for one am long liquorice, yep , red and black..   You seen the size of them Walmart clerks?  Shiiiit you offer em liquorice you get what you need, know what i'm saying??

Umm, CIO perhaps he meant you know post teotawaki not next week in Peoria...

Go Tribe's picture

Good point. I would wager that items in dwindling supply that appeal to the vices will be worth far more than gold in a collapse. Cigarettes, sweets, liquor for sure, books and board games for the bored who can't access electrical devices like this computer.

Herd Redirection Committee's picture

Moonshine will be very widely available within 6 weeks of a collapse, so good luck thinking the price of alcohol goes through the roof.  Of course it will still be valuable! But as valuable as something that can't be concocted in a bath tub?  No chance.

Disenchanted's picture



Most (sh)eople in today's society have no clue about gold or silver, their idea of precious metal is a friggin platinum credit card.

I have trouble with the concept that actual gold or siver will be widely spendable...

not to mention that the same crew that controls fiat currencies/fractional reserve banking worldwide also control the precious metal markets(supply and price).


Just like the value of diamonds is artificially propped up, I suspect the same might be true of PMs.

Looking at it from a historical perspective that is. Read David Astle's The Babylonian Woe which is a history on PMs, their use as money, and who was behind it from the beginning.


IMO a store of many practical items for barter would be more useful than PMs in today's world.

RockyRacoon's picture

"I have trouble with the concept that actual gold or silver will be widely spendable..."

You might want to work on the flexibility of your own imagination.  It would make a good start.

EvlTheCat's picture

Note to self:  Don't get drunk, and rattle the cage at the monkey house. Occupants will bite!

aerojet's picture

I never take advice from anyone who refers to martial law  as "Marshall" Law.  The Marshall has nothing to do with it!

Saucy-Jack's picture

Fucktards don't know the difference between a Marshall Plan and martial law?

A Lunatic's picture


hedgeless_horseman's picture



Mrs. Horseman sometimes threatens me with marital law.

Tyler Durden's picture

We are fairly confident that Larry Summers scored a perfect 800 on the verbal portion of his SAT (of course he said many other things about the SAT too). Perhaps you will be more comfortable taking advice from him?

post turtle saver's picture

We're fairly certain that people who sleep with their gold are fucking idiots. If TSHTF it's gonna come down to this...


The preacher man says it’s the end of time
And the Mississippi River she’s a goin’ dry
The interest is up and the Stock Markets down
And you only get mugged
If you go down town

I live back in the woods, you see
A woman and the kids, and the dogs and me
I got a shotgun rifle and a 4-wheel drive
And a country boy can survive
Country folks can survive

I can plow a field all day long
I can catch catfish from dusk till dawn
We make our own whiskey and our own smoke too
Ain’t too many things these ole boys can’t do
We grow good ole tomatoes and homemade wine
And a country boy can survive
Country folks can survive

Because you can’t starve us out
And you cant makes us run
Cuz we're them old boys raised on shotgun
And we say grace and we say Ma’am
And if you ain’t into that we don’t give a damn

We came from the West Virginia coalmines
And the Rocky Mountains and the western skies
And we can skin a buck; we can run a trout line
And a country boy can survive
Country folks can survive

I had a good friend in New York City
He never called me by my name, just hillbilly
My grandpa taught me how to live off the land
And his taught him to be a businessman
He used to send me pictures of the Broadway nights
And I’d send him some homemade wine

But he was killed by a man with a switchblade knife
For 43 dollars my friend lost his life
Id love to spit some beechnut in that dudes eyes
And shoot him with my old 45
Cause a country boy can survive
Country folks can survive

Cause you can’t starve us out and you can’t make us run
Cuz we're them old boys raised on shotgun
And we say grace and we say Ma’am
And if you ain’t into that we don’t give a damn

We’re from North California and south Alabam
And little towns all around this land
And we can skin a buck; we can run a trout line
And a country boy can survive
Country folks can survive


God Bless Hank Jr. for calling it right and God Bless the USA.

The Navigator's picture

And a country boy can survive - Country folks can survive

If you don't have a boat load of silver or gold, you better go live with a country cousin and learn some skills (hunting, fishing, skining, and tanning, farming, animal husbandry) - there may come a time when your present skills prove useless and if you're alone you'll die, if in a community you might get KP duty.

I always admired the numerous skills of my country cousins who could fish and hunt and bring home something to eat with the backyard still hootch. And they knew how to milk the cow and goats, feed the chicks, and how to fix a broken Ford truck or tractor. Most call 'em hillbillies, but those are country boys that can do most anything.

Hope you all got some country cousins of your own, or a boat nearby with a sextant.........oh, you forgot to take celestial navigation classes and get charts to your destination? Good luck when stuxnet or an EMP makes your maritme GPS a paperweight.

Take heed of the message of this article, prepare if you can. Ignore it at your own peril. 'Cus shit happens.

And a country boy can survive.

post turtle saver's picture

... and as I suspected, here comes the idiot brigade with their downvotes. Most of you assholes couldn't find your way out of a greenhouse if I gave you an axe and a shotgun but lawdy lawd you got GOLD... oh yeah, that'll save ya. IDIOTS.

Teabunny's picture

let 'em'll be fun watching them beg for food. ya can't eat gold...or paper. (hey ya think we should make 'em do a bojangles thing, then tell them "sorry, no extra food for you" when they finish begging?)

Dr. Sandi's picture

There's always somebody who's more equal than the rest of us. He's just waiting to trade that missing food for your gold. Find him and do business.

Gold is money. If you need to buy a horse or an anvil, maybe you need to know more than where the Wal-Mart is.

In an emergency, it's not gold that saves your ass. It's using your brain and figuring out how to use your wealth that saves your ass. 

I guarantee that no matter how BAAAAD things get, there's always some asshole (with many tough friends) who can get his hands on stuff nobody else can 'acquire.' And he is suddenly your new local Wal-Mart.


Clashfan's picture

Sorry, Turtle. Played football in hs w/a bunch of rednecks who made the underclassmen listen to that effing song every day while we dressed and undressed in the stinkiest clothes in the world. Hard to appreciate it now.

Freddie's picture

Sure beats that fake punk shit that The Clash spewed out.  Joe Strummer was a cluless busker hippy when he saw the Sex Pistols, jumped on  the bandwagon and copied the real article.  Mick Jones even said so.

Strummer and Mick Jones are tribe members who were the sons of diplomats and were not even working class.  The Clash were nig fu**ing phonies.  Lydon, Jones, Cook and Matlock were the real article.  I would also take Hank Williams over those frauds in The Clash with their faux leftist BS.  Their only good song was Janie Jones. Still not in the same league as The Pistols. Not even in Generation X's league.

putaipan's picture

fuck you and your musical opinion freddie. ask pete townshend if the clash were real. and l.c. ... i feel your flashback pain. they used to play chuck berry, and i'd hide in my headphones and get psyched up to the mahavishnu orchestra. probably resort to them again when TSHTF.

Cosimo de Medici's picture

So this is a glimpse of the post-Apocalypse paradise! All those who escaped with their guns and their gold, and who will be trying to trade in a community of like-minded souls loaded to the gills with both and needing little, are going to slaughter each other over their differing musical tastes.

Anybody who was fucked up and an outlier in this society is going to bag his hate, anger and intolerance right next to his buck knife and take it with him to the new beginning.

You folks actually think Brandon Smith of Alt Market and those of his type are going to play second fiddle to you when you meet up on the other side? You think they’ll embrace equality and give every man and woman equal say? How quaint! Meet the new boss, to quote your Peter Townshend.

Brave New World, indeed.

the tower's picture

Sex Pistols were contrived by Malcolm McLaren for his BOY fashion brand.

They were the first commercial punk boy band.

You don't know shit.


Raymond Reason's picture

Oh boy here we go with another narcissistic cowboy song.  Pride goes before the fall.  Don't count your chickens, cowboy, because your an've never been sifted like wheat. 

AetosAeros's picture

Look, your half right, but mostly wrong in both your approach and your demeanor.


So your a country boy/girl, well Hooah for You! What YOU fail to realize is what most of us like to call 'reality'.

Case in Point-

Stackers of PM who sound off on this venue don't just maintain PM's, they also keep well stocked food storage, and some even have secondary and tertiary places set up in the EVENT the SHTF and they have time and ability to relocate. Some of us, who don't have access to land, might just have enough things set aside to get out to some distant areas to work some land while we/they use our food stores sparingly until we can pull in a crop large enough to use and trade.

But as with this current economic issue, and historically, that too will come to an end, unless we are prepared for the historical precedents that come next, meaning- utter fucking chaos. People will kill for food over gold/silver and people who never once thought beyond today will be the first to be willing to trade ANYTHING for some of it. The smart prepper has 'tradeable' food just for this occassion. Usually to use to get from primary to secondary to tertiary as the situation calls for it.

Thing is, in today's society, there are other things people will trade for faster and with complete abandon, even if they have to steal from others to pay for it: Drugs, alcohol, and any other vice or life saving requirement. The absolute prepper has something for everyone, or enough of something to at least be able to keep from getting killed if they know how to use it.

Then comes the rebuilding. If you think for half a second that any banker, financial agent, or other PTB doesn't have their body weight in PM's squirraled away somewhere, then you sir are a danger to yourself, your family, and your families future. Because they do. At the end of fiscal turmoil, trade begins somewhere. Whether you, I, or they are still around, something will be used as a basis for some form of barter after all the shooting stops, crops have been harvested and stored, and local forms of self rule have been imposed. THAT is what stackers and preppers are waiting for. Rebuilding. With something. All FRN and GLD/SLV isn't going to 'magically' be reimposed as worth something. Company stocks aren't going to suddenly start paying dividends in the new currency, and banks (or whatever they get called) aren't going to take apples or carrots as a deposit source for the capital needed to keep your family and future sound. 

The ones with the PM's will have an edge. Like those dicks who printed all the fiat so they could purchase their bodyweights (as mentioned) and land and everything they needed to rebuild while they laughed at the sheeple who believed that SLV and GLD were as good as gold, or that FRN's would last 500 years as a staple of the world economy. Only those things that have lasted 2500-5000 years are as good as gold, because they ARE gold, and silver.

You don't have to sleep with it, and your assumption that everyone who has more than a few coins does goes to prove both your ignorance and your lack of faith in any type of rebuilding, all while you reference Hank Sr. who was telling you that Country FOLK know how to survive, but they don't do it alone. And being from the country myself, I can trade silver or gold to about a dozen farmers and ranchers for anything they grow or raise, and they wouldn't gripe one bit if the price went down this week or up next. They'd just say 'Thank You Sir, do you want help loading that?'.

So you sir, are the idiot, and you probably aren't 'real' country, just another Garth Brooks starter-kit wearing, shiny-pickemup-truck driving shill.

The Monkey's picture

Ironically, this song was written in 1982, the year nominal interest rates peaked with Volker at the helm. The birth of the giant credit bubble.

SubjectivObject's picture

It severely depresses me to understand that whenever the reset occurs, the extinction of [what, 60-70%] large animal species all over planet earth is almost certain. 

Good to see the country boys got high morale.  It should come in useful when millions of the most cunning animals ever to live on earth come looking for what they have, every 60/24/7/52.

Your most recent precedents are Yugoslavia and Argentina.  Reflect on these for the case when there is no surrounding soveriegn stability.

Snidley Whipsnae's picture

A country boy song writer that don't know the difference between a 'trout line' and a trot line?

... and, a real country boy would know that cat fish trot lines are run during the night, not from 'daylight till dawn'...

You modern country boys don't know shit about nothin'... You should have paid more attention to your fathers and grandfathers...

Your concept of country living consists of making rotten sugar whiskey and mind altering substances in a trailer in the woods. What you don't know would fill another Wiki... LMAO

New_Meat's picture


"We are fairly confident that Larry Summers scored a perfect 800 on the verbal portion of his SAT ..."

I'm sure that he did, although the various interpretations of "hysterical" were evidently not in the question pool that year.

- Ned

Vendetta's picture

As you are likely aware, intelligence has no bearing on corruptibility or brainwashability (new word... yea) ... character is the difference and Larry left his in a dark alley long ago.

Dr. Sandi's picture

He didn't actually leave his character in a dark alley. He traded it for something actual value.


NewThor's picture a Judas handful of silver?


Calmyourself's picture

C'mon Tyler, Larry Summers and Little timmy can both spell perfectly and their grammar oh, to die for even Ms. Wintour is late for their grammar..

Richard Head's picture

You'll be marshalled into the FEMA camps. Good enough for you?

Alpo for Granny's picture

I hope I can marshall enough strength to lift all this lead and phyzz when I bug the fuck out of Dodge before martial law is enacted.

New_Meat's picture

dihydro-monoxide at 3+l/day/buggie, etc ...


then ya gotta land and ???

- Ned