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Reality Exposed: Will You Take the Blue or Red Pill?37 min read

The truth is often hard to comprehend – especially when we are bombarded with such biased media influence. Here is evidence through our past writings that clearly show how what was once difficult to believe becomes reality.
The truth is often hard to comprehend – especially when we are bombarded with such biased media influence. Here is evidence through our past writings that clearly show how what was once difficult to believe becomes reality.

Dear Readers,

I’ve been called a conspiracy theorist.

I’ve been called a fear monger.

And lately, I’ve been called a capitalist pig because I have been in support of opening the economy.

But regardless of what I have been called, the most important thing for anyone reading this is to seek the truth.

The truth is often hard to comprehend – especially when we are bombarded with such biased media influence.

So today, I am simply going to show you evidence through my past writings that show how what was once difficult to believe becomes reality.

I know that most would prefer to read a headline. But please, don’t be a headline enthusiast and read this in its entirety. Only then will you see the truth.

Please share your truths at the end.

Here goes.

Begin Excerpt 1:

Why the People are Voting Trump, March 20, 2016

When I first spoke of Trump’s potential success last year (2015), people thought I was crazy. They thought Trump’s ambition of becoming President was merely a sideshow for a struggling country with numerous homegrown issues.

And at first, it was.

It gave the media something to talk about. It gave the people a distraction.

But as Trump continued his rally and gained further support from the American people, things changed.

Trump is not only a real contender but is now at the top of the polls.

You may ask, “Why are people so stupid as to vote for Trump?”

“He has no political background.”

“What does he know about running a government?”

“Have you heard the things he has said?

But none of the above matters anymore.

You see, voters aren’t simply voting for Trump; no, they are voting to fight back against the regime of corrupt politicians, greedy bankers, and manipulative oligarchs, who together represent the Establishment.

Just as Canadians voted for change when we elected Justin Trudeau as our Prime Minister, the American populace is leaning towards Trump because they too want change.

In fact, I find it quite odd how many of us Canadians laugh at America’s support for Trump.

We elected Justin Trudeau – a man without any history of hardship, leadership, or political background. I am not saying Trump is a better leader, but from the perspective of accomplishments, he has Trudeau beat.

Yet, here we are laughing at American politics.

Instead, what we should really be doing is looking at why Americans are supporting Trump.

Fighting Back

For years, I have written about how big banks gained control of society via our financial markets and the manipulation that goes on within.

I have been able to use that information to turn it into something positive by making investments based on the fundamentals of what I believe is really happening, as opposed to what the media tells us is happening.

But the majority of Americans haven’t been able to do the same.

The majority of Americans have been sitting on the sidelines, struggling to pay the bills while watching the following headlines splash across the news:

Corporate profits soar to new highs

Stock market soars to new highs

Number of millionaires in the US soar to new highs

The media hasn’t exaggerated those statements; those are all true.

The stock market is at an all-time high, and corporations are raking in the profits. And there certainly are more millionaires in the US than ever before.

But guess what? There are even more people without jobs and homes – many more.

Those without jobs and those barely making ends meet are watching the news and seeing how great things are supposed to be.

And they’ve had enough.

They’re tired of the lies the media has been spilling about the economy. They’re tired of the years of deceit.

That is why they are voting Trump.

Trump, despite some of his controversial views, represents anti-establishment.

We generally have this idea of Republicans being all for profit and capitalism that they forget the little guys. Billionaire Trump most certainly fits this character.

But people are starting to realize that Democrats are no better. In fact, since 2008, they have raised and spent more money than the Republicans by hundreds of millions.

If you take a look at the amount of money from funds, corporations, and celebrities that have gone to support Democratic campaigns, you would see that the numbers are quite high.

For example, billionaire George Soros – who is shrouded by evil conspiracies – has already given Hillary Clinton and other Democrats this election cycle more than US$13 million.

In the last mid-term elections, Liberal hedge-fund billionaire Tom Steyer poured nearly $74 million to support the Democrats.

These are the same fund managers that are the target of anti-establishment voters. And as we all know, in the world of finance, no one pours that much money without expecting a return.

Perhaps that’s why, despite less campaign spending, Trump is killing it.

The Strongest Campaign in History

Trump has capitalized on the years of anger and disillusionment of the voters to propel one of the most powerful political campaigns we have ever seen.

According to mediaQuant, and via New York Times, Trump has managed to achieve close to $2 billion worth of media attention since he began his campaign. That’s about twice the all-in price of the most expensive presidential campaigns in history. It’s also more than twice the estimated $746 million that Hillary Clinton, the next best at earning media, took in.

In February alone, Trump earned as much media as Ted Cruz and Hilary Clinton combined.

You may be thinking, “That’s because he has so much money and so many rich friends to pay for his campaign.”

Well, actually, that couldn’t be further from the truth.

Take a look at this:

bought media vs earned media

The above chart represents the amount of bought and earned media by the candidates in the 2016 election.

Trump has not only spent significantly less on media than his adversaries, but he has also gained significantly more than any of them – by a wide margin.

So much so that this week, Trump beat Rubio in his home state of Florida; thus, giving him the support of a majority of Republican primary voters nationwide.

Trump’s momentum continues, and anti-Trump Republicans are now preparing with all their might to stop his train.

But can they?

Every day, more Americans turn up to support Trump.

Americans are supporting Trump because he has been telling the truth when no one else will:

America’s economy is NOT what it appears to be.

Americans – the ones who are sitting at home watching the rich get richer while they get poorer – want the truth exposed. And they are voting for Trump because he is exposing the truth about the American economy.

Hence Trump’s slogan, “Make America Great Again.

But if Trump is indeed the anti-establishment leader he is making himself out to be, and continues to gain support, what then?

The Attack on the Establishment

For all we know, Trump, the master of the deal, may have already struck a deal with the bankers and politicians.

But as we know right now, Trump is anti-establishment and anti-globalization.

If Trump is elected under that presumption, we’re going to see the building blocks of the Establishment and globalization come under attack, and they won’t like it.

They will fight back, leading to major conflicts including riots, protests, and potentially even war and assassination attempts. It is quite possible that the Establishment might even be allowing Trump to succeed in order to cause chaos to show the people that the Establishment is a necessity once all hell breaks loose.

– End Excerpt 1 –

Back in March 2016, many thought I was nuts to say that reality TV star and billionaire Donald Trump would become the next US President. In fact, many of my colleagues laughed at me.

Yet, today, he is the President of the United States.

Then I was called a fear monger for saying that protests and riots will follow after he is elected.

Today, there are riots and protests everywhere.

Begin Excerpt 2:

Can Trump Stop the Establishment, January 29, 2017

You have no doubt heard all of the rhetoric behind Trump’s rise to power. And you’ve probably read countless streams of anti-Trump articles.

But…whether you’re a Trump supporter or not, I urge you to take a step back and view things from a different perspective: The perspective of the Establishment.

You may call them the Global Elite, the Deep State, the Shadow Government, or the Illuminati.

You may even call them bankers, politicians, and Globalists.

What you call them is not important. What’s important is that we learn to see things from “their” perspective.

Their goal is to ensure control of the world through a single directive.

In fact, most of the geopolitical antics you’ve witnessed have been engineered to elicit a specific psychological response in order to brainwash the masses into believing “they” are the saviours of the world.

Take 2008, for example. It was an event that was deliberately set to create an international financial crisis in order to make us believe that we need to be “saved.”

The bankers created a crisis, and the world panicked. Then the bankers provided a solution, and the world acted as nothing happened.

“They” create a problem (financial crisis) to elicit an emotional response (panic), and then provided a solution (debt).

Then everyone thanks “them” for saving the world.

Just ask the people at Time Inc.’s Money division:

Via Money’s “Who Really Dug Us Out of the Great Recession“:

“…If any entity deserves the biggest share of credit for avoiding another Great Depression, it’s the Fed. The Fed really turned to an extraordinary number of tools to keep money flowing in the economy, many of them made up on the fly.”

Did the Fed really save the world out of the kindness of the heart? Maybe. What we do know is that America, and more importantly Americans, now owe the Fed and the banks more money than ever.

If you think this is something new, think again.

We all know about the Great Depression, and some of you were around to experience it.

In school, we are taught that the Great Depression was created by the wild and irrational stock-market speculation that ultimately led to the Great Crash of October 1929. We are taught that greedy capitalists were to blame.

A closer look, however, reveals that the increase in money supply caused by the Fed was one of the primary drivers that fueled the stock market boom. The Fed created an unsustainable boom in the 1920s by lowering interest rates.

In fact, Murray Rothbard, a famous Austrian economist, estimated that the money supply had increased by 61.8 percent between 1921 and 1929.

And based on his formula for true money supply, we’re way above 62% now over the last eight years.

In other words, it was the Fed’s direct monetary policy that led to such irrational exuberance in the stock market. This irrational exuberance (much like today’s stock market) gave way for the Fed to decrease the money supply, prolonging the Great Depression.

This, in turn, eventually gave way to the Banking Act of 1935, which converted the autonomous regional system of reserve-holding banks into a monolithic central bank with direct and deliberate control over the U.S. monetary system.

In other words, it led to the creation of the Fed: a single banking directive in the most wealthy and most powerful country in the world, the United States of America.

Today, the same events are occurring, but this time on a global scale.

If you understand the mind of the Establishment, then you too can chart a proper course through the troubled waters we’re about to face this year.

Let’s start by going back to March of 2016 when I wrote an important Letter on “Why the People are Voting Donald Trump“.


Why the People are Voting Donald Trump

“…We generally have this idea of Republicans being all for profit and capitalism that they forget the little guys. Billionaire Trump most certainly fits this character.

But people are starting to realize that Democrats are no better. In fact, since 2008, they have raised and spent more money than the Republicans by hundreds of millions.

If you take a look at the amount of money from funds, corporations, and celebrities that have gone to support Democratic campaigns, you would see that the numbers are quite high.

For example, billionaire George Soros – who is shrouded by evil conspiracies – has already given Hillary Clinton and other Democrats this election cycle more than $13 million.

In the last mid-term elections, Liberal hedge-fund billionaire Tom Steyer poured nearly $74 million to support the Democrats.

These are the same fund managers that are the target of anti-establishment voters. And as we all know, in the world of finance, no one pours that much money without expecting a return.”


Regardless of your political views, Democrats have been the primary source of big government and the ruling class. Many within the Democrat Party have reaped the financial rewards from those who depend upon, and profit from, government largesse.

It’s no surprise that over the last few decades, the Democrats have always been able to raise more money than the GOP – spending much more than Republicans to win nominations.

Do you think it’s a coincidence that many supporters of the Clinton Foundation have significantly decreased or stopped donations to the Foundation immediately after Hillary Clinton lost the election?

Take Norway, for example.

Via Hegnar (translated by Google):

“According to Finance newspaper laid the annual Norwegian contribution of NOK 40 million on average from 2007 to 2013. In 2014, the contribution more than tripled, to 129 million. And in 2015 they increased to 174 million.

… After a record contribution from Norway to the disputed Clinton Foundation before the election year, the contribution is now in free-fall. Financial newspaper can tell that next year’s contribution is down 83 per cent from the peak year of 2015.

…Norway has not entered into any new agreements with the Clinton Foundation, which means that cooperation is closing next year. Then the total Norwegian contribution to the disputed Clinton Foundation, according to Finance newspaper, have summed up to 643 million kroner.

Norway is thus the third largest contributor after Saudi Arabia and Australia, followed by a number of Arab Gulf states.”

It’s no surprise that the relationships between Saudi Arabia and many of the Arab oil states with the Clintons have been shrouded by much controversy over the past years.

I wrote about this many times before in my Letters, including The Secret Deal Between the U.S. and Saudi Arabia.

And the media tells us Trump is colluding with Russia…

Now, recall:


Why the People are Voting Trump Continued, March 20, 2016…

“…Every day, more Americans turn up to support Trump.

Americans are supporting Trump because he has been telling the truth when no one else will: America’s economy is NOT what it appears to be.

Americans – the ones who are sitting at home watching the rich get richer while they get poorer – want the truth exposed. And they are voting for Trump because he is exposing the truth about the American economy.”


Here’s the truth: closing the income gap was one of Obama’s biggest agendas for economic change.

During his first four years in office, little was done to bridge this gap. So in 2014, he promised “with or without Congress” to tackle economic inequality in his annual State of the Union address.

Unfortunately, as data from the U.S. Bureau of Labor Statistics recently revealed, not only did income inequality not decline under his reign, it actually surged to multi-decade highs.

Via Bloomberg:

“Top wage earners last year made 5.05 times what their lowest-income counterparts took home, the widest gap in data going back to 1979, according to the Labor Department. What’s worse, it shows the most recent improvement — in 2014 — was just a blip, and the trend is again moving in the wrong direction seen over almost four decades.”

Unfortunately for Obama, top economic priorities have fail miserably, but last week’s disappointing US GDP growth data may have just labeled Obama as one of the worst Presidents in history for economic growth.

Over his two terms in office, Obama averaged an annual growth rate of less than 1.5% – the weakest of any expansion since 1949.

But the real dagger is that Obama has now become the only President since Hebert Hoover to not have one year of 3% GDP growth.

Sure, we can give Obama some slack since he did take office following one of the biggest financial crises in history.

But you would think that with a rip-roaring stock market and having added almost $8 trillion to the national debt – the most in history – the American economy should have done much better.

It’s ironic because Obama and his Democratic administration promised to take care of the little guys, the lower and middle class. Yet, Americans are now in more debt than ever (which the little guys will have to pay for), and the wage gap is bigger than ever.

So regardless of your political views, can you really say that things are better for the lower and middle class?

While Trump’s critics claim that he is dividing Americans, the truth is that his policies are actually about protecting them.

Trump has talked about the widening inequality gap that only benefits the wealthy class. And while his critics, the media, and democratic opposition will always turn the tables by addressing Trump’s wealth and his capitalistic views, the reality is that under the Obama administration, things have gotten much worse.

Now before you attack me as a Trump supporter, know that I am merely painting the facts. These are precisely the facts that Trump has exposed and that the media has covered up.

The scary part is that Justin Trudeau shares many of Obama’s ideologies and policies. It’s no secret Trudeau looked up to Obama and that the two shared a bromance.

Trudeau is going to spend and put Canadians into massive debt, just as Obama has done. It remains to be seen if his massive spending spree will produce any real economic results…


Continued from Why the People are Voting Trump, March 20, 2016…

“…For all we know, Trump, the master of the deal, may have already struck a deal with the bankers and politicians.

But as we know right now, Trump is anti-establishment and anti-globalization.

If Trump is elected under that presumption, we’re going to see the building blocks of the Establishment and globalization come under attack, and they won’t like it.

They will fight back, leading to major conflicts including riots, protests, and potentially even war and assassination attempts. It is quite possible that the Establishment might even be allowing Trump to succeed in order to cause chaos to show the people that the Establishment is a necessity once all hell breaks loose.”

It would appear “they” are already fighting back. The media continues to attack Trump through protests and marches, many funded by left-wing lobbyists and the elite such as George Soros. Yes, this includes numerous members of the Women’s March.

It was recently revealed that Soros was connected to more than 50 of the groups that organized the nationwide “Women’s Marches” that saw millions of Americans take to the streets across the country.

It’s the same march where Madonna’s she said she has “thought an awful lot about blowing up the White House,” adding to the subliminal messages of an assassination attempt on Trump.

In fact, we’re witnessing assassination comments all over social media from those who have influence over our youth and the uneducated. From Rappers such as Rick Ross, who called for an assassination of Donald Trump last year, to major media outlets such as CNN, who are subliminally planting the seed to incite others to  take down Donald Trump.

With so many unstable individuals being fuelled by the media, Trump is in a very dangerous position.


“What I write may be difficult to grasp at first, but as time passes, the light will shine. Just keep in mind that throughout American history, whenever the Establishment has been challenged, it has always been followed by bear markets and economic contractions.”


And Trump is directly attacking the Establishment.

In his inauguration speech, he directly focused on bringing the power back to the people; directly attacking and calling out the Establishment:

“For too long, a small group in our nation’s capital has reaped the rewards of government while the people have borne the cost. Washington flourished, but the people did not share in its wealth. Politicians prospered, but the jobs left and the factories closed.

The establishment protected itself, but not the citizens of our country. Their victories have not been your victories. Their triumphs have not been your triumphs. And while they celebrated in our nation’s capital, there was little to celebrate for struggling families all across our land.

… For many decades, we’ve enriched foreign industry at the expense of American industry; subsidized the armies of other countries, while allowing for the very sad depletion of our military. We’ve defended other nations’ borders while refusing to defend our own

…And spent trillions and trillions of dollars overseas while America’s infrastructure has fallen into disrepair and decay. We’ve made other countries rich, while the wealth, strength and confidence of our country have dissipated over the horizon.

One by one, the factories shuttered and left our shores, with not even a thought about the millions and millions of American workers that were left behind. The wealth of our middle class has been ripped from their homes and then redistributed all across the world.”

Backing his words with action, Trump has already signed a whole range of executive orders that challenges the very essence of the Establishment.

He’s already made an executive action to withdraw the United States from the Trans-Pacific Partnership – a partnership often viewed as a globalist policy. He’s frozen the hiring of new Federal employees in attempts to control Big Government. He’s done a lot in just a week.

And according to the New York Times, Trump is about to attack the Establishment head-on:

“The Trump administration is preparing executive orders that would clear the way to drastically reduce the United States’ role in the United Nations and other international organizations, as well as begin a process to review and potentially abrogate certain forms of multilateral treaties.

The first of the two draft orders, titled “Auditing and Reducing U.S. Funding of International Organizations” and obtained by The New York Times, calls for terminating funding for any United Nations agency or other international body that meets any one of several criteria.

Those criteria include organizations that give full membership to the Palestinian Authority or Palestine Liberation Organization, or support programs that fund abortion or any activity that circumvents sanctions against Iran or North Korea.

…The draft order also calls for terminating funding for any organization that “is controlled or substantially influenced by any state that sponsors terrorism” or is blamed for the persecution of marginalized groups or any other systematic violation of human rights.

…The second executive order, “Moratorium on New Multilateral Treaties,” calls for a review of all current and pending treaties with more than one other nation. It asks for recommendations on which negotiations or treaties the United States should leave.

The order says this review applies only to multilateral treaties that are not “directly related to national security, extradition or international trade,” but it is unclear what falls outside these restrictions.

For example, the Paris climate agreement (Globalist policy) or other environmental treaties deal with trade issues but could potentially fall under this order.”

Trump is cleaning house, and he has already purged the State Department. Many believe the CIA is next.

And it’s no secret that the CIA has attacked Trump leading up to his inauguration.

Just remember this: the last U.S. President to challenge the Establishment, the Shadow Government, and even the CIA, was the beloved John F. Kennedy.

President Kennedy did many of the things Trump is attempting to do today: Expose the shadow government, eliminate the CIA, ordered a complete withdrawal from Vietnam (Trump has boldly announced that he will bring back troops and not interfere with other nations’ internal affairs), and signed Executive Order 11110 – one that would return the responsibility of the money supply back over to the U.S and out of the Fed.

And we all know what happened to JFK following his actions…

…With Trump in power, the short-term success of America will be apparent.

However, the success of his policies means a gradual rise in inflation, and thus, interest rates.

Like the events leading up to the Great Depression, we have been exposed to a prolonged all-time low level of interest rates. This has led to irrational exuberance in the stock market, which could lead to a dramatic depression when the bubble pops.

We have been so accustomed to low-interest rates that when interest rates tighten, it could spell doom for many Americans who are already stifled with debt. It could also spell doom for many emerging markets whose debt is mainly comprised of dollar-denominated assets.

And believe me, interest rates will rise in 2017.

Now that Trump is in power, he could become the fall guy for the Establishment’s policies.

In fact, half of America has already been set up to blame Trump for every negative event that will happen over the next four years.

They will blame Trump for a stock market crash (if one were to occur, which I believe it will), and not for the irrational exuberance brought on by low-interest rates and the loose monetary policies of the last decade – the same policies that led the U.S. to the Great Depression.

As Trump’s policies begin to see success, the Fed will likely raise rates and contract the money supply. They will need an excuse to do it, and what better excuse than a rise in inflation caused by Trump policies…

– End Excerpt 2 –

Prior to the COVID-19 pandemic, Trump’s policies were, in fact, successful; job numbers were getting better, and the stock market continued to soar.  Did interest rates rise in 2017, and did the Fed begin to contract the money supply?

Take a look at the Fed Funds rate:

Right on cue, in 2017, the Fed began to raise rates.

And what about the money supply?

In 2018, the Fed did just that.

Via Wikipedia:

“In 2018, the Fed began retiring some of the debt on their balance sheet, beginning quantitative tightening.”

What about the CIA? Is Trump going after them?

Via New York Times, Feb 13, 2020:

Justice Dept. Is Investigating C.I.A. Resistance to Sharing Russia Secrets

Trump administration officials investigating the government’s response to Russia’s election interference in 2016 appear to be hunting for a basis to accuse Obama-era intelligence officials of hiding evidence or manipulating analysis about Moscow’s covert operation, according to people familiar with aspects of the inquiry…

…Mr. Trump has targeted all three former top officials as he has sought to foster a narrative that it was illegitimate for government investigators to scrutinize links between his campaign, Russia and WikiLeaks and that he was the victim of a “deep state” conspiracy to sabotage him for political reasons — a push that led to the Durham inquiry.”

What about Canada, where I said, “Trudeau is going to spend and put Canadians into massive debt, just as Obama has done.” I know many Trudeau supporters will say he had to deal with the COVID-19 pandemic, so let’s look at what Trudeau has done prior to COVID-19.

On Feb 4, 2020, the Fraser Institute wrote:

“Prime Minister Justin Trudeau is projected to be the largest accumulator of federal debt per person (5.6 percent) among prime ministers who did not fight a world war or experience an economic downturn during their tenure.”

Remember, debt has to be repaid; if not in your lifetime, your children’s. We, and they, will be taxed so much that we’ll never be able to afford anything or get ahead. Property taxes will go up. Income tax will go up. And there will be tax on top of tax, just as there already is in British Columbia. Meanwhile, Trudeau and his family will get richer – from school teacher to multi-millionaire. Just like Obama…

Via Factcheck.org:

“For Barack and Michelle Obama, $15.6 million of the $20.5 million that they earned between 2005 and 2016 came from books written by the former president, according to a 2017 Forbes analysis. Two of the books, “The Audacity of Hope” and “Dreams from My Father,” were published before he became president, and a third book for children was published in 2010. Just over $3 million came from the presidential salary for eight years.

Since leaving the White House, Barack and Michelle Obama have signed onto high-profile deals, including one reportedly worth $60 million for a pair of memoirs. The first, written by Michelle Obama, was released in November 2018 and became the best-selling book that year. The couple also signed a television series and movie production deal with Netflix, but the amount they’ll make from it isn’t clear. One early report described it as a “high 8-figure deal.”

It’s easy to tell people to stay home, lose their jobs, and take on debt, when you’re worth tens of millions of dollars…

I bet that Trudeau, outside of his multi-million-dollar family legacy money, will make tens of millions after he leaves office also.

I hope you’re still following because the next part is even eerier than the last.

– Begin Excerpt 3 –

Six Events Will Determine Our Future, August 20, 2017

I have made many attempts to paint the true story of what’s really going on in both the markets and the economy.

Much of what I wrote in past Letters – including predicting a Trump victory a year before he was even elected – has come true.

Today, I am going to simplify my prediction.

And while you shouldn’t take it as gospel, you should certainly be aware that the scenarios I paint – however extreme – have a strong possibility of happening.

In fact, it would be rather unwise to believe that extremes cannot happen – especially when “extreme” is what one might label our current financial and political situations:

  • An extremely divided housing-to-wage ratio (think inequality)
  • Extreme levels of debt that continue to climb with no regard on how it will be serviced in the future
  • Stock market setting record new highs despite fundamentals
  • An extremely divided government under President Trump
  • An extremely divided America
  • An extremely divided World

When we reach the near extremities of modern civilization, the ultimate consequence is a complete reset of the financial system – a complete reset of government.

I am not saying that this will happen soon, if at all. I am just saying that it’s the inevitable outcome when reaching the peak of society.

Last month, I talked about how the world revolves around the Fed and its inflate/deflate cycles.

If you haven’t read that Letter, you can read it by CLICKING HERE.

I suggested that the Fed has already gone through the “inflate cycle” and is in the midst of preparing for the deflationary cycle that always follows. How quickly this occurs is unknown at this point, but if the Fed deflates too quickly, we will witness an extreme global economic and financial reset.

The question is: Are we at the peak of this era?

Today, I want to paint our current picture to give you a bird’s eye view.

It plays out like this (with many of these points overlapping one another):

  1. Inflate: Make people feel good by giving them cheap money through Quantitative Easing (QE) and low-interest rates – increase the money supply.
  2. Deflate: Take the good feeling away by taking away cheap money through Quantitative Tightening (QT) and higher rates – decrease the money supply.
  3. Control: Subdue the population by taking their focus away from the real situation. Think media control; think the increase of opioid usage and the legalization of marijuana; think President Trump; think billionaire-funded protests.
  4. Divide: Segregate society by inducing riots and hate crimes.
  5. War: Mask the international financial and economic crisis through the rhetoric of war, or even war itself.
  6. Reset: Global economic reset will be blamed on war, not the monetary actions of the powerful elite.

1. Inflation: The Give

Since the Fed increased the money supply with global Quantitative Easing, there is now over US$15 trillion of sovereign debt and equities in central bank balance sheets.

Furthermore, over $5 trillion of investment-grade bonds trade at negative interest rates, while US equities – the biggest equities market in the world – has inflated to new record highs.

Housing is also on the rise, and the costs of living have skyrocketed everywhere.

In fact, if you live in the US and make minimum wage, you can’t even afford a 2-bedroom apartment in any of the US states:

Think that’s bad?

Just 0.1% of US minimum wage workers can afford a 1-bedroom apartment without being what the government calls “burdened.”

Take a look at how many hours a minimum wage worker has to work in order to afford a 1-bedroom apartment:

So how are people getting by?

Through more debt.

It’s precisely why household debt continues to reach new highs.

Total mortgage debt outstanding at the end of the first quarter this year sits at over US$14.4 trillion – around $300 billion shy of the record-high set in the second quarter of 2008 of nearly $14.8 trillion.

Now consider this: Overall mortgage debt is rising by over $100 billion every quarter, with every quarter rising faster than the last. If this trend continues, we’ll breach the 2008 record by the end of this year.

Actually, we could reach it even sooner.

Why?

Recall my June Edition of the Equedia Letter, “What Happens When the Financial Bubble Pops“:

“…Starting in just a few weeks, millions of Americans are about to receive an artificial boost in their credit scores.

… a simple change from the credit bureaus – and not borrower habits – will boost the credit scores of 12 million Americans overnight.

The effects of this boost are already taking place and is about to set off a new wave of consumer credit.”

That might not sound like much, but let me show you how damaging that can be.

If every one of those 12 million Americans is allowed to borrow just US$1 because of better credit scores, that’s $12 million of new debt.

If they borrow $10 each, it’s $120 million.

If they borrow $100 each, it’s $1.2 billion.

If they borrow $1,000 each, it’s $12 billion.

If they borrow $10,000 each, it’s $120 billion.

If they borrow $100,000 each (say on a mortgage), it’s $1.2 trillion.

Meanwhile, corporate debt continues to hit new record highs.

All of this debt is being issued through low-interest rates.

But while both corporate and consumer debt balloons, the Fed is expected to make all of this money more expensive…

2. Deflate: The Takeaway

In June, the Fed announced that it would slowly increase rates and slowly reduce the money supply. Simply put, it’s on the path to deflating.

And again, recall from my June Letter that when the Fed deflates, it has historically triggered a recession:

“History shows us when the Fed lowers interest rates and increases the money supply, the economy booms; when the Fed raises interest rates and decreases the money supply, the economy shrinks.”

As Bill Gross, one of the most prominent bond managers, recently put it:

“Most destructive leverage – as witnessed with the pre-Lehman subprime mortgages – occurs at the short end of the yield curve as the cost of monthly interest payments increase significantly to debt holders.

While governments and the U.S. Treasury can afford the additional expense, levered corporations and individuals in many cases cannot.

Such was the case during each of the three recessions…But since the Great Recession, more highly levered corporations, and in many cases, indebted individuals with floating rate student loans now exceeding $1 trillion, cannot cover the increased expense, resulting in reduced investment, consumption, and ultimate default.

Commonsensically, a more highly levered economy is more growth sensitive to using short term interest rates and a flat yield curve, which historically has coincided with the onset of a recession.

If the Fed does indeed pull more money out of the system in the coming months and years and “normalize” rates, I have no doubt that it will trigger a recession. Much of our current debt, especially consumer debt, has ballooned as a result of low rates and easy lending.

What happens when rates rise and the cost to service that debt becomes too great?

Just think of all of the people who took out massive mortgages in the last five years at low-interest rates. A small increase in interest rates could significantly increase their mortgage payments.

Furthermore, when the Fed raises rates and reduces the money supply, it reduces consumption, which leads to unemployment. How will the unemployed pay for the massive mortgage they took out?

This is an issue that has been lingering for years. I know it. You know it. Yet people continue to financially overextend themselves.

How is that possible?

3. Control: Look Over There, Instead

The trick to blindfolding society against the true economic and financial disasters about to take place is to subdue the people within it.

During the Roman era, the rulers did this through Gladiators.

Today, the rulers do it through sex-filled media, alcohol, and drugs. They take the focus away from the real economic dangers by giving us other things to talk about: fake news, marijuana legalization*, and the allowance of drugs into our nations.

Consider some of the most read news stories in 2016 by some of America’s top news publications:

USA Today: Alligator kills toddler at Disney

NY Times: Why You Will Marry the Wrong Person

And the most-watched video in 2016? Adele’s Carpool with James Corden.

The political realm is no different – focusing on everything but politics.

Lastly, as I mentioned before in a previous issue, America is in the middle of a massive opioid crisis. But we should ask ourselves: Are drug problems the result of a strong, booming economy, or the opposite?

Opioids are the strongest kinds of painkillers. And when do we take painkillers?

When we’re in pain…

4. Panic: Divide and Conquer

When the rich grow richer, and the poor get poorer, riots, protests and the alike ensue.

Three years ago, I wrote a very important Letter regarding the growing tensions in the US and how racial and prejudice tensions were being ignited to distract us from the real problem at hand:

“Do we all need a reminder that during the financial crisis, politicians socialized losses, while allowing banks to privatize profits?

Do we need to be reminded that our rulers the government extended historic amounts of money to the banks who were the cause of the financial crisis, but did little to help the people who lost their jobs, homes, and families?

This is exactly what “they” want. They want us to be blind to the real problems in our society. And they do this by pitting us against each other; by using race as the focus of inequality, rather than economic inequality itself.

That’s because racial inequality pits one group against another, whereas economic inequality pits citizens against the rulers of an empire.

The more focused we are on racial inequalities via the Donald Sterling or Ferguson events, the less focused we are on the real inequalities separating America.”

Unfortunately, these types of hate-filled segregation scenarios, pitting Americans against each other, are getting worse.

Via Reuters:

” Hundreds of white marchers with blazing torches clashed briefly with counter-protesters on the Charlottesville campus of the University of Virginia on Friday, the eve of a rally planned by thousands of white nationalists, media said.”

Via NY Times:

“Violence erupted on Saturday as hundreds of white nationalists had gathered here for a rally and clashed with counter-protesters, resulting in at least one death and prompting the governor to declare a state of emergency.”

And it’s not just Black vs. White. Protests are spreading everywhere in America.

According to the Washington Post, more people protested in June than any other month since January.

It’s no different here in Canada. Just take a look at the recent Vancouver protest.

Via Trudeau-funded CBC:

“…Plans for the far-right demonstration began circulating on social media earlier in the week, not long after a deadly white nationalist march in Charlottesville, Va.

…According to a Facebook page for the event, the rally is protesting Islam and the Canadian government’s immigration policies. The page is no longer live, but the demonstration was expected to begin around 2 p.m. PT.

By 3 p.m., a handful of far-right protesters appeared to have gathered. They held confederate flags and the “alt-right” symbols for Pepe and Kekistan. One wore a shirt in support of U.S. President Donald Trump.

…Counter-protesters…streamed into the city hall area – as well as the nearby SkyTrain station and surrounding streets – around 12:45 p.m. PT.”

I write this because it shows how easy it is for someone (anyone) to spread negativity and stir the pot. It shows how easy it is to influence the crowd.

I am not saying that these types of protests were staged, but I am saying that we should be aware that many of the protests in America have been funded by billionaires and other wealthy groups.

Why?

Racial inequality pits one group against another, whereas economic inequality pits citizens against the rulers of an empire.

It turns out, most of those protesting might not even really know why they’re protesting.

As Tina Lovgreen tweeted it best when she said, “Sounds like more of a party than a protest. Listen:

All the while, geopolitical tensions grow increasingly worse.

5. War: The Ultimate Bait and Switch

In 2013, I warned in my Letter, “A Nuclear Threat,” that the N. Korea threat was real.

More importantly, I warned of N. Korea’s involvement with Iran:

“…While you may have heard about North Korea’s threats, the media hasn’t told you the scariest part: Iran’s involvement.

Open Source Intelligence (OSINT) is now suggesting that as many as 100 Iranian nuclear weapons technicians and scientists are now in North Korea after an agreement was signed last year between the two countries that focused on scientific and technological cooperation. This comes on the heels that news of last month’s rocket launch was assisted by Iran.”

Then in 2015, I warned in my Letter, Nuclear Arms Race Threatens the World, of N. Korea’s ability to deliver an intercontinental ballistic missile capable of delivering a nuclear warhead, all with the help of Iran:

“…While officials and analysts in the U.S. and South Korea continue to downplay how close North Korea has come to acquiring a nuclear weapon small enough to be put on a missile or even its ability to deliver a nuclear warhead on an intercontinental ballistic missile, there’s something they haven’t mentioned: North Korea has help.

…Iran and North Korea have been working together on numerous ballistic missile programs, going back to the eighties.

So while North Korea may not have the resources or the know-how to create a nuclear weapon, Iran certainly does.

Here’s the scary part: Iran has already been working on atomic weapons and advanced implosion technology that’s small enough weapon to fit on – you guessed it – North Korean-supplied ballistic missiles.”

Fast forward a few years later, and the media is finally catching on.

Via CNBC:

“…Iran’s official IRNA news agency reported Kim Yong Nam, head of North Korea’s parliament, arrived Thursday for the weekend inauguration of Iranian President Hassan Rouhani.

…But given he is expected to stay 10 days, the trip is being seen as a front for Pyongyang to perhaps increase military cooperation with Tehran and to boost the hard currency for the dynastic regime led by Kim Jong Un.”

While the focus is on N. Korea, let’s not forget that Iran is also a major threat. If Iran can give N. Korea nuclear capabilities, then surely N. Korea could just as easily give Iran intercontinental ballistic missiles.

How will the U.S. deal with an attack coming from both N. Korea and Iran at the same time?

And while that is going on, the U.S. continues to advance in the South China Sea, where US$5 trillion worth of cargo cross every year, aggravating China in the process.

Just last week, Reuters reported that a U.S. Navy destroyer carried out a “freedom of navigation operation,” coming within 12 nautical miles of an artificial island built up by China in the South China Sea.

It was the third “freedom of navigation operation” during Trump’s presidency.

The tensions are growing, and I don’t see any of these countries backing down.

Which means the reset is already in motion…

6. Reset: Already in Motion

Nothing goes up forever; not stocks, not the economy, not civilization.

I believe the next stage – although the exact time has yet to be determined – is a prolonged period of stagnation, recession, or depression.

Anytime society goes through such drastic changes – war included – people begin to accept different forms of political policies.

During the Great Depression, we saw the New Deal by President Franklin Roosevelt.

These included drastic changes, including Roosevelt’s Emergency Banking Act, which reorganized the banks and closed the ones that were insolvent.

It also included the end of prohibition – which, some may argue, that marijuana legalization* is part of our modern-day New Deal.

I have given you many reasons why I expect a reset – a New Deal – to happen. I have even talked about the idea of free money, dubbed basic income, many years ago before governments of the world announced it would be testing such theories.

But if you aren’t convinced, consider the following:

In 2009, the Trustees Report indicated that the value shortfall, or unfunded obligation, for the Old-Age and Survivors Insurance and Disability (OASDI) Trust Fund program was about $15.1 trillion.

Today, the latest report shows that value has risen to $34.2 trillion – more than double the amount less than eight years ago.

Just how are Social Security and Medicare mostly financed? Payroll taxes on earnings paid by employees and their employers and income from investments. These investments are comprised of U.S. government bonds, which are directly affected by interest rates.

In other words, the only way to service Social Security is to have higher taxes and higher interest rates.

Meanwhile, there is around US$1.4 trillion in US student loans, and nearly 40% of borrowers are either in default or more than 90 days past due.

As Trump has already alluded: it’s time to renegotiate debt.

Or, rather, it’s time to reset.

– End Excerpt 3 –

In the above 2017 letter, I highlighted the following progression of events:

  1. Inflate: Make people feel good by giving them cheap money through Quantitative Easing (QE) and low-interest rates – increase the money supply.
  2. Deflate: Take the good feeling away by taking away cheap money through Quantitative Tightening (QT) and higher rates – decrease the money supply.
  3. Control: Subdue the population by taking their focus away from the real situation. Think media control; think the increase of opioid usage and the legalization of marijuana; think President Trump; think billionaire-funded protests.
  4. Divide: Segregate society by inducing riots and hate crimes.
  5. War: Mask the international financial and economic crisis through the rhetoric of war, or even war itself.
  6. Reset: Global economic reset will be blamed on war; not the monetary actions of the powerful elite.

I believe we are at stage 3-4. Many of the current protests have been organized by very well-funded groups (ex. ANTIFA and Black Lives Matter) whose origins can be traced back to billionaires that have been notorious for doing this around the world. Society is more segregated than ever, and riots and hate crimes are happening everywhere.

Stage 1 through 4 has happened. The only thing that has changed is the COVID-19 pandemic, which reversed QT and higher rates. But the virus did allow countries around the world, including Canada, to directly inject “free money” into people’s bank accounts – just as I said would happen many years ago.

In Canada, they called it the Canada Emergency Response Benefit, where citizens would receive $2000 every four weeks for 16 weeks. The crazy part? A Canadian who only made $5000 last year, could get $8000 this year – for free!

In the US, they called it the Coronavirus Aid, Relief, and Economic Security (CARES) Act, where 80 million Americans will have $1,200 directly deposited to their bank accounts – for free!

Remember: the less people work and the more free money the government gives them, the wider the income equality gap will get – especially when taxes have to climb to pay for all of this. In other words, what people believe is free money is simply a deferral – debt.

Which leads to the next stage of the cycle: War.

Given how the COVID-19 pandemic has played out, war could be replaced by an economic war through the spread of a virus that seemingly appears when convenient.

What do I mean?

With all of these mass protests around the world, the spread of COVID-19 and COVID-19 tested deaths should be staggering. We’ll have to see where the numbers are in a week to see what happens, but so far, the numbers are still dropping.

But my previous prediction on COVID-19 remains.

It goes like this..

– Begin Excerpt 4 –

How to Invest in the Coronavirus Pandemic, March 15, 2020

I have no doubt that the spread of the COVID-19 disease will dwindle in the coming months. Like most outbreaks, it will plateau – especially given the extreme measures the world is taking in unison.

Combine that with the warmer months ahead, and we should see a dramatic decline in the disease.

But in the meantime, the world will lose a quarter of GDP growth – effectively equalling a global recession. Meanwhile, credit markets are on the brink of failure.

As a result, we’re already seeing massive rate cuts around the world and creative stimulus across many nations.

President Trump has already announced a payroll tax cut that could be worth over US$1 trillion – that’s already more than the bailout of 2008. Meanwhile, the Fed has already begun a repo program worth $1.5 trillion, with an additional $500 billion every week for the next month.

Combined, that’s already a whopping $5 trillion worth of monetary injections.

And I bet there’s more coming.

If the spread of COVID-19 subsides in the coming months, which I suspect it will, and provided that credit markets don’t completely collapse, we’re going to see stocks rebound and strong asset classes such as gold climb.

The summer could be a boon for those willing to take risks by investing in stocks and gold-related assets.

But as the summer fades away and fall comes, the weather will get colder – making it easier for the COVID-19-causing virus to come back for another round.

(In fact, most outbreaks often plateau, subside and come back for another round.)

By that time, we would have learned much about the virus, and a vaccine may even be close.

However, that won’t stop the volatility of the stock from coming back.

Why?

Because Trump will be defending his title. And the Democrats will throw everything, including the kitchen sink and COVID-19, to dethrone him.

In short:

Buy when the weather gets hot. Sell before the weather gets cold.

– End Excerpt 4 –

As predicted, GDP growth has stalled, while COVID-19 has subsided, despite the mass protests around the world.

And if you would have bought stocks shortly after I wrote that, you’re likely up a pretty penny.

If you bought gold, you’re up as well.

While I know that hindsight is 20/20, I hope that after reading all of this, you may begin to see the bigger picture. What may seem like a conspiracy at first, may not be as hard to believe once it plays out.

I urge everyone to start reading news from all sources – not just the ones you’re used to.

Follow those on Twitter you disagree with.

Read news from sources you feel are biased against your beliefs.

Forget Left vs Right, Democrats vs Republicans, or Liberals vs. Conservatives.

Only then will you see the bigger picture – but only if you choose to.

Will you take the blue or red pill?

Elon Musk took the red pill…

As always, seek the truth,

Ivan Lo

Equedia
The Equedia Letter is Canada’s fastest growing and largest investment newsletter dedicated to revealing the truths about the stock market.