Jan 242018
 January 24, 2018  Posted by at 3:59 pm Finance Tagged with: , , , , , , , , , , , ,

Rembrandt van Rijn The Storm on the Sea of Galilee 1633
On March 18, 1990, the painting was stolen by thieves disguised as police officers. They broke into the Isabella Stewart Gardener Museum in Boston, MA, and stole this painting, along with 12 other works. The paintings have never been recovered, and it is considered the biggest art theft in history. The empty frames still hang in their original location.



This is an article written by Dr. D, who last month wrote a series at the Automatic Earth entitled Bitcoin Doesn’t Exist.

It shouldn’t surprise you that bitcoin plays a cameo in his Modest -but actually quite grand- Plan as well.



Dr. D: With all the talk about the bubble market, people are once again saying Donald Trump is a fool, he should never have taken credit for a Dow that’s about to collapse. In addition, how does he think he can get away with claiming we have a great economy made greater? He said in the election the economy was terrible and the Dow was a bubble, that’s why he won.

But hold on: you have to remember, they’re politicians; they may be dishonest but they’re not stupid. Let’s try a scenario to see what they’re thinking:

We have a situation in the U.S. where 100 million people are out of the workforce, the real economy is on life-support, debt is crushing, and monetary velocity is at an all-time low. The Fed’s every effort at market-rigging, lowering rates and pumping in money, bailing out the banks and giving unearned interest for Fed deposits have run up both the housing market and the stock market, neither of which is their legal mandate. If either one goes higher, they’ll pop as workers, particularly millennials, have no income to buy houses, and stocks are levitating on just 5 insider-paid FAANG stocks.

It’s untenable. However, if either falls, the collateral that upholds the whole system will fail, margins will be called, the housing market will fall, and there will be an instant Depression… You know, more than the 100 million out of work Depression we already have. A Depression that makes Congressmen and government workers lose their profits and 401k’s instead of just turning students to open prostitution, and mass opioid death, and starving people in Oklahoma – you know, a Depression that finally hurts someone who matters.

Since this is self-evident and unsustainable, isn’t Trump just stepping in it by pushing all the same policies as Obama? Not necessarily. Look at what matters to him. A tax plan, and barely, not one he liked, but look at what he settled for: return of foreign profits abroad. Why? Large as it is – and it’s already creating long-withheld bonuses – that’s not enough to turn the dial. But that’s a card he wanted. Tax policy and a high stock market. What else?

Well, we have a crippling high debt, easily 100% even 200% of GDP. With that weight, nothing can move, no way to win. Pensions also are nearly dead, along with insurance companies; the high Dow is all that’s saving them from bankruptcy. What else? Well he was interested in health reform but was willing to let it remain for now. He wrote deferrals but not pardons for 5 banks showing he’d like to keep them functioning for the moment. He wanted to increase the military.

Certainly the only other promise was to create jobs and economies again, in a way saying the few protected industries: Finance, Health Care, and Military would have to become a smaller % of GDP, so those dollars could be returned back to Main Street. But we just said those three aren’t happening.

So. What if instead of pulling money from intractable lobbying groups he got new investment money from abroad? We saw this initially with Carrier and Ford and more recently with Japan. But it’s not enough and he knows all this; they all do. How do you solve the problem? How do you get more?

Calling all 1st year econ students: how do you attract capital to your country? With higher rates. As the US 10-year breaks out above 2.6% you’d have to think that’s attractive. Attractive investing in a bankrupt nation that’s barely moving? It does if you’re a company that must maintain legal investment ratios and you’re getting 0% in Japan, and negative rates in Europe, both with economies as bad or worse.

But aren’t rising rates bad? The Fed model raises rates to clamp down on the economy. Money will leave the stock market and go to bonds. Housing prices will fall as the monthly cost increases. Cats and Dogs living together….except it isn’t true.


Let’s go down the list:


1. Trump starts with plausible seed corn, a billboard sign: a tax cut and a few trillion overseas to start economic motion.

2. If the Fed raises rates, that will draw in trillions of world capital Trump wants, enough to turn the dial and really matter.

3. Enough money flowing into the U.S. will create demand for the US$, and the US$ will rise. This part has to work. Be flashy, attract attention. Go big or go home.

4. The US$ rising will attract foreign buyers into U.S. investment and together the stock market will counterintuitively rise.

5. The Fed will detect overheating and raise rates again and again in a reinforcing cycle, drawing capital to only the U.S. and suffocating the world.

6. The massive investment re-industrializes the U.S. to some extent while the high US$ gives some relief to Main Street.

7. Foreign buying, better jobs, and low exchange rates hold off the housing collapse, while all the mortgage bonds are also sold overseas.

8. Emerging markets are hammered by the high US$ and fail, driving ever-more capital to safe havens like the US.

9. Ultimately, the U.S. does what all reserve currencies do and fails LAST.


See why they think they can get away with this? The U.S. can still ravage the world, and Trump can, in fact, call it his “success.” …Just like all the Presidents since Nixon.

But this is history, and it never ends there.


10. The whole world, strangled by the US and its dollar have no choice but to reject the US system entirely in private contracts and move to an alternative.

11. We now have at least three alternatives: the CIPS/Yuan banking bloc, gold, and cryptocurrencies. They aren’t exclusive: the most likely outcome is a gold-backed trading note priced in Yuan on a blockchain, perhaps in the Shanghai Exchange.

12. Being entirely too high the US$ ultimately cripples the U.S. as well, but the alternative currency the world creates becomes the lifeboat to escape. Let’s be simple and say it’s Bitcoin (it won’t be): Bitcoin hits John McAfee’s $1 million. What do you call it when a currency rapidly becomes worth 1/10th, 1/100th, 1/1,000,000th of the standard? Isn’t that hyperinflation?

13. The U.S., like every nation since Adam Smith, defaults on its $20T in $ debt – and all its internal consumer, corporate, and pension debt – using “hyperinflation” of the dollar. New twist is that, instead of gold, it hyperinflates vs. cryptos or the new world exchange standard as planned in 1971 and publicized in 1988.

14. The reset occurs, no one dies (in the U.S.), supply chains are maintained, oil flows, and the economy stops being a feral, diabolical means of theft and control and returns to being a fair, voluntary exchange. For now.


That’s not to say they’ll succeed, but this is why they think they can go this way and win at it. What does the Trump world look like?


1. Stock market rose, like he said.

2. Manufacturing returns, reindustrializing a hollow nation and allowing the country to catch up to the stock prices, like he said.

3. Unemployment drops, like he said.

4. Crime is reduced and the cities are improved, like he said.

5. This helps win the black vote, snatching the rest of the Democratic base and locking them out for years, like Bannon said.

6. Economic growth normalizes the banking/medical oversize, like he wanted.

7. Free, untracked money for bribes and illegal cover end and law and order returns with fair exchange, like he said.

8. The U.S. is unwelcome overseas, and the breaking of bonds re-sets the multipolar world, where the U.S. is just one trading nation among many, like he said.

9. Without the money of empire the military returns home, like he said.

10. The world is pretty mad at us and that renewed military came in handy. That’s okay, they’ll be consoled that the economy now works and the U.S. can no longer start wars and act terribly.


What does the world look like after? A lot more like it was before 1945. You know, back when we were great and before we got terrible.

Again, not to say this WILL happen, but you can see that it CAN happen, and they are now in control of most of the levers required. From their rhetoric, you can see the glass darkly that this is what they find a priority, a possibility, and therefore a doorway out. In addition, downsizing and re-establishing honesty will not allow their opponents to wiggle out and reverse it.

Why wasn’t this done before? My guess is that a) previous planners thought with a little more effort they could take over the world, as seen in the Arab Spring plan that would culminate in the capture of Iran, the only remaining oilfields on the planet, and b) given the world’s first entirely fiat financial system, it was too complex and disruptive to return to a gold standard.

Without a lighting fast crypto base, banking and trade would fail and millions would die. Only when the one was burned out and the other made available could this move be attempted. Watch and see.



Home Forums A Modest Plan

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    Rembrandt van Rijn The Storm on the Sea of Galilee 1633 On March 18, 1990, the painting was stolen by thieves disguised as police officers. They broke
    [See the full post at: A Modest Plan]

    Ken Barrows

    That might work, except the biggest beneficiaries of said tax cut just want to buy back stock. We will know soon enough.

    V. Arnold

    With the recent pronouncement of the Mattis Doctrine; war must be factored into any view of our future.
    North Korea and Iran figure heavily in the near future, IMO. Both have the potential to go global, and quickly.
    Economically speaking; we seem to be trapped in a casino with no exits…

    Dr. D

    Not to press quick enough: Mnuchin makes his public announcement of their official US$ plans. “Lower” but apparently only a little.

    I should have added, “Is this how it will go? Probably not. But the point is that these guys are planners. They execute plans when they’re in office, and make plans and white papers when they’re out of office. Because their life revolves around controlling everything and telling everyone what to do. It doesn’t even take Trump to have a plan; he doesn’t need one. A Presidency isn’t one man but a collective. His team will have plans, his generals have plans, the Fed has plans, everybody has plans and agitates and negotiates for things they wish they could do.

    The problem is that no plan survives contact with the enemy.”

    You know, something like that. But I’m guessing from the rhetoric and the pension catastrophe that the one solid point is “hyperinflating” the stock market, and there’ve been some big inside voices saying the same. Eras don’t end with a whimper but a bang. ’01 or ’08 might have been spike enough, but if you get out of that, as they have, you’ll need a blowoff top for the ages.
    Problem is, “spike” vs what? US$? Gold? Oil? Aluminum? LTC? Wheat? When a system ends, the anchor points are changed. That’s how we know it’s something new.

    Oh well, like it or not, we’re all tied to the mast now.

    V. Arnold

    Oops, my bad: With the recent pronouncement of the Mattis Doctrine; war must be factored into any view of our future.
    Make that Rex Tillerson.


    Two thoughts: 1) of mice and men, 2) social mood–which just peaked at century-long scale–trumps all.

    Chris M

    So, is this the same Dr. D that posts in the comments section?

    And…does this Dr. D have a blog or website..or contact information? 🙂


    Dr D,

    I found your analysis very interesting. I think it is a mistake to underestimate Trump. He thinks strategically and most people assume that he is only thinking about his next Tweet.

    My best example is how he has totally caved in to the Neocons when it comes to the Middle East. He has surrounded himself with these ignorant, narcissistic and racist people and allowed them to run the show. The net result is actually going to be the return of the Jews to Europe. By trying, and succeeding, to destroy or damage all other countries in that neighbourhood they have ensured that these self-same neighbours learn all about the arts of war and politics. In 1948, Palestine had been occupied by the British or Turks for over 600 years. The Palestinians were in no way prepared to see off an invasion of Europeans who had learned their skills in WW2. Today, the situation has entirely changed.

    First, the Jews (let’s call them by their proper name) started faring badly in their wars in Lebanon and were forced out after making a truce.

    Next, they got the Americans and NATO to do their dirty work for them – Iraq and Libya – but that did not work out so well for the Americans.

    Lastly, they and their allies (Saudi Arabia, Kuwait, Qatar and the UAE have always been allied to Israel) resorted to using proxies with exotic names (ISIS/ISIS, FSA, Al-Nusra, Ahrar ash-Sham, Asala wa-al-Tanmiya, Sham Legion, Jaysh al-Islam etc.). The states financing and supporting logistically each of these armies may be different, but the mercenaries working in them are the same. The mercenaries switch allegiances at the drop of a hat – following orders or simply to get better wages or to avoid getting killed.

    Now that these proxy armies are in the process of being eliminated, the Jews who control the media and the US congress have gone full circle and are back at trying to get the US military directly involved – hence the presence of American occupation troops in Syria. Strategically, it makes absolutely no sense for the USA to try and maintain their isolated fortresses in these places. They can only be supplied by air and it would only take a few batteries of missiles to stop that. Alternatively, they can be bombed by surface-to-surface missiles and drones. The only reason that has not happened is that the Iranians and Russians are playing the long game. They could always do the last option and claim it is remnants of the terrorists.

    I hope you can see what I am getting at: Trump is no idiot. Those who think they are controlling him are the real idiots.

    I have a financial concept that I would like to share with Dr D. I would very much appreciate an opinion by a person who has no axe to grind. My email is anassim at gmail dot com



    The dollar will not be revalued against bitcoin. It will be revalued against the only non-fiat asset on central bank balance sheets — and we all know what that is.

    When that happens, the only way the military industrial complex will survive without downsizing will be to use its war toys to steal the shiny rocks from countries that cannot defend themselves.

    Dr. D

    What people don’t realize is he controls nothing. The government is so infested with the one-party he can’t even pick his own cabinet. He’s running like 5%, or by now, maybe 10% of the machine, as best seen in the FBI which simply refuses to present evidence and appear for subpoenas for Congress and the President. Luckily, the part he controls apparently includes the U.S. Marines, (or rather, they control HIM) and **some** of the Pentagon. Not all. As we can see, the CIA is fighting the Pentagon (as we saw with actual U.S. forces shooting each other in Syria reported by the L.A. Times, i.e. a peculiar type of civil war overseas) but also certain parts of the Pentagon fighting itself. It’s pretty bad and they’re trying to keep it in-house and not break into an open shooting civil war, but that leaves other problems, like how they can’t just openly arrest or eliminate their opposition. Leads to a bizarre spy-vs-spy game that makes literally no sense in the nightly news.

    Anyway, having no control, what can he do? Well, places he wants things to collapse he keeps the incompetent people in there pushing their embarrassing, incompetent plans. Nikki Haley comes to mind. He can change his mind in Iran, shoot useless missiles in Syria, or make trade and peace treaties impossible to negotiate. The result: the world learns to go around the United States, that we won’t be there in any competent way, and to solve it themselves without us or our military. They dump the U.S. dollar and ring-fence the power structure in Wall St. He does that by feeding the bad guys rope to proceed with bad plans they don’t have the forces to accomplish. It’s not what one might want to do, but it’s what he can do given the limitations.

    That ends up reading like incompetence or schizophrenia, but the stakes are so high the good guys can’t afford to care — at all — about their public image. You have to read them from their actions only, not their words.

    Example? Americans just lit up at Sessions who, while these 10,000 felonies are still unprosecuted, decided instead to call off the truce and enforce marijuana laws when 1/3 of states have legalized in some way and like +65% are in favor of decriminalizing. “How can he do this!?! Doesn’t he know the whole nation is against it? Now we’re probably going to have to go up there and repeal the law in Congress, and we’ve got the votes to do it, by God!” Ding! So Sessions, whose JOB is to ENFORCE LAWS of Congress, is supposed to NOT enforce this unpopular law while you lazy-bones don’t bother to repeal it? Isn’t that how we got into this mess? And then his enforcing the law inspires you to — finally!! — fix a law long since discredited that nobody likes? Gosh, that does sound stupid of him to force you to do your civic duty. How tone deaf. /sarc

    You see this all day long, but only if you understand the field and the context, which no one’s reporting on. They’re happy to let everyone think they’re stupid, incompetent, crazy, whatever it takes to prevent shooting and mass death until they can get enough edge up to wrest control back into the civilian, visible government again. It’s been a long time.


    >>But hold on: you have to remember, they’re politicians; they may be dishonest but they’re not stupid. Let’s try a scenario to see what they’re thinking:<<
    Let me point out the ELEPHANT In the middle of the room that everyone likes to pretend doesn’t exist.

    Why would Trump tie himself to something he already publicly admitted was a BUBBLE in 2016?



    The Don made a DEAL, not with the little people, BUT WITH THE MONEY POWER.

    This is 2+2=4 in Money Power politics.


    Nassim, I would like to try to stretch your imagination just a bit.
    The wars in the Middle are not Israeli state wars. Let that sink in. I know that’s the Money Power financed narrative, which is why everyone ought to consider how it might be completely wrong.

    Review the history of modern warfare in the contest of BIS controlled central banks – a near perfect trend develops rather quickly.

    The people of the nation state called Israel are under Debt-Money Tyranny, just like the rest of us. They are being systematically asset stripped and impoverished like the rest of us.

    The Money Power is supranational and they are waging war against ALL ORDINARY PEOPLE ACROSS THE GLOBE.

    Their goal is to have “the little people” blame anyone (Trump) or anything (the entire state of Israel, or even just its government) INSTEAD OF THE BLAME LANDING ON THEMSELVES, THE HIDDEN FINANCING POWER IN CONTROL OF BOTH TRUMP AND THE STATE OF ISRAEL (AND EVERYTHING ELSE BIG IN THE WESTERN WORLD).


    “The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.”
    ~Lord Acton

    “When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”
    ~Napoleon Bonaparte

    “Let the American people go into their debt-funding schemes and banking systems, and from that hour their boasted independence will be a mere phantom.”
    ~William Pitt, (referring to the inauguration of the first National Bank in the United States under Alexander Hamilton).

    How To Be a Crook

    Poverty – Debt Is Not a Choice

    Renaissance 2.0 The Rise of [Debt-Money Monopolist] Financial Empire

    Debunking Money

    Krugman (and each MIT economist professor – THEY KNOW AND THEY OCCULT!) is a Goebbelsian propagandist as he covers the crimes of wolves with his fake sheep suit and lisp.

    Krugman to Lietaer: “Never touch the money system!”

    And It’s Gone

    “The brave man inattentive to his duty, is worth little more to his country, than the coward who deserts her in the hour of danger.”
    ~Andrew Jackson

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