As wealth floods into assets for protection against debasement, national stock market indexes explode to ATHs
-Zimbabwe Industrial Index
-Merval Buenos Aires Index
-Caracas Stock Market Index (IBVC)
-German Stock Market (1920-1924)
What about the price of gold when denominated in national currencies?
-Zimbabwe Dollar
-Argentine Peso
-Venezuela Bolivar (‘VES’ est. 2018)
-Weimar Marks
Three of these examples are taking place before our eyes. Large discrepancies between ‘official’ rates and actual rates are common as governments will use this spread to sustain their operations.
Current ‘official’ Interest Rates of Venezuela, Zimbabwe & Argentina
Luckily for us we have a tool that reveals such manipulation..
*Zimbabwe relaunched a new sovereign Dollar (ZWL) in 2019, pegged to the USD. Its previous currency was scrapped in 2009 due to its last hyperinflation.
Some lesser known inflation crises:
Israel, 1983
The four largest banks had been engaged in buybacks to support their stock prices. When they ran out of capital the share prices collapsed. The banks were then nationalized.
-Israel All Share Index
-CPI
-USD exchange rate
American Civil War, 1861
-Inflation Rate for the Confederate States
-Lerner Commodity Price Index (Eastern Confederate cities)
-Price of a pair of shoes (North vs. South)
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When Ray Dalio uttered the words “cash is trash!" on CNBC in early 2020, he seemingly broke the fourth wall.
For someone of his stature and influence within the political machine to acknowledge the chronic and unavoidable debasement of fiat currency was a clear turning point.
While he did temporarily reverse his position, his general view remains unchanged.
The perverse incentives of the fiat system—siphoning value from savers to fund deficits—can only lead to more of the same.