New World Order: Till Kingdom Come

The Morgan Report June Edition

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New World Order: Till Kingdom Come

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Currencies all over the world are collapsing, even the majors, and this is a very big deal. For instance, Japan just deployed $55 billion on defense, which, at best, slows the collapse. The Japanese yen has declined by approximately 12-13% versus the US dollar so far in 2024, as part of a longer-term collapse that has seen it lose over 33% of its value against the greenback since early 2021.

This tactic of slowing collapses is something interventionists are extremely enchanted by, which, like Keynesian economics, they believe is a form of magic. It’s a kind of magic that gives central planners the insurance and hubris to financially engineer and orchestrate the rest of the ‘wartime economy,’ serving as an allegory for you to see the ultimate illusion in real-time.

As readers may know, the central planners’ potion of choice is nefarious money printing. Yet what we don’t discuss much is their manipulation of time, such as slowing the decline of the yen as a result of money printing. Note that time is arguably the most important financial and economic metric, as most variables are examined throughout a time series and are elongated by central bankers worldwide. The elongation of debt from money printing is more jarring when analyzed on logarithmic scales. Yet we, as humans, find it more comfortable and are linked to solar cycles and their roots in time, which works in favor of centralization. When we examine U.S. national debt on a log scale, we see that national debt approximately doubles every eight years, which coincides with business or economic cycles since the inception of the Federal Reserve.

Central Banks the Masters of Time

You may ask, “Hey, Einstein, how is the magic of manipulating time even possible?”

Well, we literally have Albert Einstein to thank for that. For instance, Einstein pointed out the relativity of space and time. He also noted that ‘compounding interest’ is one of the most powerful forces in the universe. Meanwhile, it was John Harrison who built the world’s first chronometer, a precision timepiece that enabled the British Empire to safely navigate longitude, which eventually led to the creation of global time zones. Effectively, we began to harness space and time the world over, and all these 20th-century advancements would eventually influence modern 21st-century economic theory.

Therefore, I propose that the crux of modern economic theory functions as such: if ‘time is money’ and both time and money are made fiat and relative, central banks can ‘buy time.’ When they buy time through money printing, they are also deflating all government liabilities and the effects of compounding interest on their debt—at the same time. This magic works to prop up the zombie-like economy akin to propped-up heads of state that supposedly represent us.

One World Government

Remember that saying about making it to the ‘top’?

“Getting to the top is one thing, but staying there is quite another. That’s the difficult bit.”

So these central planners keep themselves on top and avert economic downfall, revolt, and revolution through the melt-up of debt, as mentioned last month by the central limit theorem. With historical precedents showing that most currencies last no longer than the average of approximately 80 years, they have every incentive to turn back the ‘doomsday’ clock and avert financial calamity and social unrest. When they prop up the economy unnaturally, there may still be bystanders. In the case of financial institutions, if they are unable to avert doom, they will simply amalgamate the institutions through roll-ups and bad banks. In your country and all over the world, financial institutions keep shrinking to levels seen in modern-day China and Russia.

In 1920, Japan had 1,400 banks, and post-WWII it had 64. The US had over 20,000 banks in 1920 but now has around 4,500. Banks are the last stand to the central bank, but the central bank has new tools in their arsenal with the optionality to globally centralize and consolidate into bigger governments akin to trade unions, the EU, UN, and the IMF, a byproduct of this iteration of globalization, otherwise known in Japan as the Washington Consensus. All this consolidation into the new world order requires the ‘great melt-up,’ which I referred to in last month’s publication as the personification of the ‘central limit theorem’ in both the market and the economy.

In the new world order, the acceleration of buying time through money printing propels the decoupling of the financial economy from the real economy. With the impact of the marginal productivity of debt becoming gradually eroded with the sheer acceleration of credit, the economy becomes more detached from physical reality and enters the malleable, fluid, inverted financialized reality of the centralists, ensuring they stay on top of the hierarchy.

The longer the new world order is on top of the kingdom, the more you can develop and envelop a complete decoupling of a country’s natural and human resources for the ruling elite. This is why bureaucrats are getting richer and richer. As the economy becomes more undemocratized and centralized, the easier it is to extort this wealth. This is also why government and big industry debt-to-GDP is a good measure of the encroachment on individual liberties, inevitably touching more and more facets of our everyday lives. These measurements can also be used to hedge ourselves for these socially engineered environments.

Seven years ago, I revealed the secret blueprint for global investors who are seeking profit and want to understand economic booms and busts. As a veteran who has lived and invested in Asian markets for over twenty years, I’ve strived to crystallize all my experience into a simple model, something easy to understand and implement, called the Asia Capital Development model (ACD). This model reflects developmental shifts in the economy from the foundation of ‘wartime economies’ the world over.

Effectively, it treats all the pillars of the economy like the military-industrial complex, such as those mentioned in my contribution to last month’s The Morgan Report—‘Big Banks,’ ‘Big Tech,’ ‘Big Pharma,’ ‘Big Oil,’ etc.—with the goal of stimulating the top parts of each value chain within critical parts of the economy and excreting to push the new sectors, industries, and agenda of the central planners. This insight served as an investment compass, informing global investors of the region’s mechanics and changes.

Consider the following: despite the Japanese yen being in free fall, the Nikkei 225 index reached new all-time highs, surpassing its 1989 peak. This rise is driven by strong corporate earnings, especially in the semiconductor sector, and significant foreign investment inflows. So far this year, the Nikkei 225 has increased by about 14.21%, showing strong market performance.

ACD would indicate that Nikkei 225 companies saw an increase in new debt issuances in recent years, taking advantage of low domestic interest rates in Japan, with technocratic leadership from the semiconductor sector in Japan, which is up significantly higher than the precious metals in Japan.

I use ACD to examine aggregate gold miners throughout the world and check their balance sheets to explain the underperformance of the sector overall (below). While my colleague in Japan indicated to me that many investors sought to buy metals directly or indirectly linked to assay by Japan’s bullion associations, which I cautioned as less liquid from an international perspective (maple leafs and gold eagles) relative to the interim to developments in the Nikkei 225.

Let this be a case example to those disheartened by the system. Since you may be inundated with a series of economic indicators or policies that appear to be the only focus on the bullish case for hard asset prices or hard asset stocks, we can be blinded by the hyperrealism of the ‘real’ and discount all that is transpiring in the financialized world. Since many readers despise the system, and rightfully so, they block themselves from capturing the opportunities to protect themselves.