Are we on all roads to totalitarianism, a system where everything is centrally controlled, where there are no free markets or price discovery, and where there is extreme regulation, and control over capital, information and even your movements?
“One of Karl Marx’s ten planks in his Communist Manifesto to seize power is the centralization of credit in the hands of the state, through a national bank with state capital and an exclusive monopoly,” I wrote in a piece entitled Central Planners, in March 2023.
When academics and intellectuals talk about the failing of free market capitalism and the need to replace the system with something better it is false
A capitalist system never advocated having a centralized entity to issue currency, which is one of Karl Marx’s planks for a communist manifesto.
The vicious cycle of the monetary system today could be the road to totalitarianism
The public deficit of the group of seven advanced largest democracies is a near-record high. Moreover, this trajectory shows no signs of falling, bearing in mind the demographic time bomb and the need to pay for unfunded entitlements for an ageing population.
So the government deficit is likely to keep growing but with inflation remaining a fixture on the landscape investor demand for sovereign bonds is likely to fall.
The only likely buyers of these sovereign bonds are the central banks, the buyers of last resort. Bond buying by the ECB, BOJ, FED, and BOE is likely to continue as it finances state capitalism, a type of totalitarianism administered by technocrats in a pseudo-democracy.
Here is the zinger; as central banks create more currency inflation rate keeps rising, investors will eventually figure this out, and demand for bonds will continue to fall.
Central banks then create more currency, and the vicious cycle of money printing, and inflation continues.
Moreover, as interest rates head higher, consumption falters, and unemployment rises. The state then plays an ever-increasing role in providing necessities for the growing masses of the desperate, hungry, and homeless citizenry.
The above is the road map to totalitarianism and neo-serfdom under the watchful eye of a severance state
It is how the chosen few will control the many in a high-tech digital prison with invisible bars.
Disobedience will be starved, with a keyboard stroke, in a cryptic message payment declined.
Automation and AI will accelerate the road to totalitarianism as 90 per cent of jobs become replaced with intelligent machines.
No income tax means no need for democracy, as the populous will be at the mercy of the state.
The road to totalitarianism will be met with no resistance, bearing in mind the lockdowns of the 20s showed that the majority will self-incarcerate when given free money and even mediate when told to do so.
Investing in totalitarianism will be precarious. Fallout with the state for whatever reason and assets can be frozen or confiscated.
Price discovery will not exist, and fundamentals will be irrelevant. Everything will be centrally planned and policy-driven, where the state decides the winners and losers of companies.