They’re CONTROLLING The Government!! Know This!!

Summary

This video delves into the weaponization of government debt, suggesting it's used by elites to maintain power and prevent political change. It scrutinizes the UK's debt crisis under Liz Truss and speculates on central banks' influence over policies. The script hypothesizes that bond market volatility might be manipulated to undermine anti-establishment politicians. It also explores the resurgence of 'Bond vigilantes,' the implications for European countries using the Euro, and the potential impact on wealth, capital allocation, and the adoption of Central Bank Digital Currencies (CBDCs).

Takeaways

• 💸 Governments worldwide are deeply in debt, with a collective debt exceeding 300 trillion dollars, which many believe will eventually lead to a debt bubble burst.
• 🕊️ The elites might be using the debt bubble to maintain power and prevent political change by influencing the financial markets.
• 🇬🇧 Liz Truss's resignation as UK Prime Minister was allegedly a result of a manipulated bond market crash, orchestrated by the Bank of England and others to force her out due to her proposed spending plan.
• 📉 The Bank of England's decision to sell UK gilts (government bonds), despite the known risks, may have contributed to the market crash, raising questions about the central bank's influence on government policy.
• 🏦 Central banks, as major holders of government debt, have the power to move markets and potentially influence political outcomes.
• 🔄 The term 'Bond vigilantes' refers to bond holders who sell or threaten to sell their bonds to pressure governments or central banks, particularly on fiscal policy.
• 📈 The resurgence of inflation has led to speculation that bond vigilantes are pressuring governments and central banks to reduce spending and raise interest rates to combat inflation.
• 🌐 The European Central Bank's (ECB) lack of intervention in the bond markets of certain EU countries may indicate a political strategy to influence policy compliance within the union.
• 🗳️ Snap elections in countries like the UK and France may be a preemptive move by current governments to avoid blame for an impending debt crisis and to allow them to return to power after the dust settles.
• 📊 The restricted supply of freely tradable bonds due to central banks' quantitative easing (QE) has made bond markets more volatile and susceptible to smaller players' influence.
• 🌪️ The potential debt crisis and the central banks' response to it will likely lead to increased misallocation of capital, wealth inequality, and political polarization, with significant implications for the global economy and financial markets.

Q & A

What is the current global debt situation as mentioned in the script?

The script states that governments around the world are collectively over 300 trillion in debt, indicating a massive global debt bubble that many believe will eventually burst.

How is government debt being potentially weaponized according to the video?

The video suggests that government debt is being weaponized to prevent political change by elites who may use it to pressure opponents or keep them in check, potentially manipulating debt markets to influence political outcomes.

What was the official reason for Liz Truss's resignation as Prime Minister of the UK?

The official reason for Liz Truss's resignation was her proposed government spending plan that would cut taxes without reducing spending, which led to a collapse in the value of UK government bonds, causing a chain reaction affecting pension funds and ultimately forcing her to resign.

What alternative explanation does Liz Truss offer for her resignation in her book '10 Years to Save the West'?

In her book, Liz Truss claims that the Bank of England and others facilitated the bond market crash to force her to resign, suggesting a coordinated effort to undermine her government's spending plan.

What is the role of central banks in influencing government policy through debt?

Central banks, as some of the largest holders, buyers, and potential sellers of government debt, can influence government policy and politicians by moving markets through their actions, such as buying or selling government bonds, which can affect long-term interest rates.

What is the term 'Bond vigilantes' and how is it relevant to the discussion in the script?

The term 'Bond vigilantes' refers to bond holders who sell or threaten to sell their bonds to pressure issuers, causing interest rates to rise. The script discusses the resurgence of this phenomenon, suggesting that large bond holders, including possibly central banks, may be using this tactic to influence government spending and policy.

How did the Bank of England's actions potentially contribute to the UK bond market crash?

The Bank of England's decision to sell UK gilts, despite the known risks of causing market volatility, may have contributed to the market crash that led to Truss's resignation. The video suggests this could have been intentional or coincidental, but it raises questions about the bank's influence on government policy.

What is the potential impact of central banks' actions on anti-establishment politicians?

The script suggests that central banks, as large holders of government debt, could use their market influence to pressure anti-establishment politicians into compliance with the status quo or face market volatility that could undermine their policies or force them out of power.

What does the script suggest about the future of government debt and bond markets?

The script suggests a looming government debt crisis, with the potential for countries like France and the UK to be at the forefront. It implies that central banks may need to buy all government debt in circulation to control market volatility, which could lead to increased wealth inequality, political polarization, and misallocation of capital.

How might the actions of central banks and public institutions affect the political landscape in countries that use the Euro?

The script posits that public institutions like the European Central Bank could use their control over bond markets to pressure Eurozone countries into compliance with EU policies, making genuine political change difficult and potentially leading to more radical ideas on spending.

What are the potential consequences for individuals in this scenario of increasing government debt and market manipulation?

The script suggests that individuals' wealth may increasingly depend on their compliance with the demands of whoever is in power, with the potential for an enormous loss in purchasing power of fiat currencies and a push towards Central Bank Digital Currencies, while alternative technologies like cryptocurrency may offer an outlet for financial freedom.

Outlines

00:00

💥 Weaponizing Government Debt for Political Control

This paragraph discusses the global issue of government debt, which is over 300 trillion, and how it's being used as a tool by elites to manipulate political power. It highlights the case of Liz Truss, who became the UK Prime Minister and quickly resigned after proposing a spending plan that would increase government debt, leading to a collapse in UK government bond values and pressure on pension funds. The paragraph also introduces the controversial claim by Truss that the Bank of England and others orchestrated the bond market crash to force her resignation. It sets the stage for a deeper dive into how government debt can influence politics and markets.

05:01

🏦 Central Banks as Bond Vigilantes: Influence on Policy

The second paragraph delves into the concept of 'Bond vigilantes', introduced by investor Ed Yardeni, referring to bondholders who sell or threaten to sell bonds to pressure issuers, causing interest rates to rise. It provides historical context from the 1980s and 1990s, where bondholders influenced Federal Reserve policy and US government spending plans. The paragraph also discusses the role of central banks in influencing government policy through their control over government debt, suggesting that central banks, being large holders of bonds, can sway government decisions and potentially even cause the resignation of politicians whose policies they oppose.

10:03

📉 The Role of Bond Markets in Political Maneuvering

This paragraph examines the recent political events in Italy and France, suggesting that bond market volatility may be used as a tool to influence political outcomes. It discusses how the European Central Bank's actions, or lack thereof, could be seen as politically motivated, particularly in relation to Italy's Prime Minister Georgia Maloney and France's President Emanuel Macron. The paragraph suggests that public institutions like central banks may be using their influence over bond markets to ensure compliance with EU policies, effectively acting as 'Bond vigilantes' in a political context.

15:04

🗳️ Snap Elections and the Looming Debt Crisis

The fourth paragraph explores the possibility that snap elections in the UK and France were called due to the risk of defaulting on government debt, with the intention of avoiding blame for an impending debt crisis. It suggests that politicians like Rishi Sunak and Emanuel Macron may be pushing for unpopular policies to ensure they are not in power when the crisis hits, thereby avoiding responsibility. The paragraph also touches on the idea that central banks, through their actions or inactions, could be contributing to this political strategy, potentially leading to a situation where they are forced to buy all government bonds to stabilize the markets.

20:05

🌐 The Future of Government Debt and Its Impact on Markets

The final paragraph predicts a government debt crisis, with France and the UK at the forefront, and discusses the implications for markets. It suggests that central banks may need to buy all government bonds in circulation to control market volatility, but political pressures could make this difficult, especially in the EU where the ECB's actions could be influenced by political considerations. The paragraph concludes with a warning about the potential for increased wealth inequality, political polarization, and the loss of purchasing power of fiat currencies, while also highlighting the potential for alternative technologies like cryptocurrency to offer financial freedom.

Keywords

💡Debt Bubble

A debt bubble refers to a situation where the total debt accumulated by governments or financial institutions reaches unsustainable levels, creating the risk of a financial crisis when it bursts. In the video, the debt bubble is central to the theme, as it discusses how over 300 trillion in government debt worldwide could lead to a crisis and the potential manipulation of this debt by elites to maintain power.

💡Government Debt

Government debt is the money that a government has borrowed to finance its spending. The video emphasizes the weaponization of government debt, suggesting that it is being used as a tool to prevent political change and manipulate economic outcomes, as seen in the case of the UK's former Prime Minister Liz Truss.

💡Bond Vigilantes

The term 'Bond vigilantes' describes investors who sell or threaten to sell government bonds to pressure issuers, typically central banks, to adopt more financially conservative policies, such as raising interest rates. The script mentions the resurgence of bond vigilantes in the context of political pressure and market manipulation.

💡Gilts

Gilts are government bonds issued by the UK government. In the video, the collapse of the gilt market is tied to the resignation of Liz Truss, illustrating how government debt instruments can impact political outcomes and policy decisions.

💡Central Banks

Central banks are institutions responsible for managing a country's monetary policy and financial stability. The video discusses how central banks, such as the Bank of England, can influence government policy and market outcomes through their actions with government debt, including selling bonds to raise long-term interest rates.

💡Interest Rates

Interest rates are the cost of borrowing money and are a critical tool used by central banks to control inflation and stabilize economies. The video explains how central banks adjust interest rates through various mechanisms, including the buying and selling of government bonds, which can have significant impacts on government debt and political scenarios.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. The script discusses the role of inflation in driving central banks' decisions to adjust interest rates and sell government bonds, which can affect the stability of government debt markets.

💡Quantitative Easing (QE)

Quantitative easing is a monetary policy in which a central bank purchases government bonds or other securities to inject money into the economy and stimulate economic activity. The video points out that QE has led to central banks becoming significant holders of government debt and has reduced the supply of freely tradable bonds, contributing to market volatility.

💡Political Polarization

Political polarization refers to the divergence of political attitudes and opinions towards opposing ends of a political spectrum. The video suggests that the manipulation of government debt and bond markets could exacerbate political polarization, as different ideologies compete for control and influence over economic policy.

💡Risk Assets

Risk assets are investments that carry a higher degree of risk, such as stocks or real estate, but also offer the potential for higher returns. The video posits that the central banks' need to buy government debt could be bullish for risk assets, as they may capture much of the liquidity in the market.

💡Central Bank Digital Currencies (CBDCs)

CBDCs are digital forms of a country's currency managed by a central bank. The script suggests that governments may promote CBDCs as a solution to financial instability, potentially imposing them to increase control over financial transactions, which could impact individual financial freedom.

Highlights

Governments worldwide are over 300 trillion in debt, with the potential for a debt bubble to burst.

The debt bubble is allegedly being weaponized by elites to prevent political opponents from gaining power.

Liz Truss's resignation as UK Prime Minister was reportedly linked to a proposed spending plan that increased government debt.

Truss claims the Bank of England facilitated the gilt market crash to force her resignation.

Central banks can influence markets and potentially government policy through their control of government debt.

The Bank of England's decision to sell UK gilts, despite known risks, raises questions about its intentions.

The concept of 'Bond vigilantes' refers to bond holders pressuring issuers by selling bonds, causing interest rates to rise.

The resurgence of inflation has led to speculation that bond vigilantes are pressuring governments to fight inflation.

Public entities like central banks, as large holders of government debt, are driven more by politics than profits.

The ECB's lack of intervention in France's bond market volatility suggests potential political motivations.

Snap elections in the UK and France may have been called due to impending debt crises and to avoid blame.

Central banks' quantitative easing has reduced the supply of freely tradable bonds, increasing market volatility.

Smaller players in the bond market can now have a significant impact on bond prices due to restricted supply.

Central banks may eventually need to buy all government bonds in circulation to control market volatility.

Political forces within the EU could pressure countries through bond market behavior, hindering genuine political change.

The central banks' actions will likely lead to increased spending, wealth inequality, and political polarization.

The future may see central banks or governments imposing digital currencies in the name of financial stability.

Alternative technologies like cryptocurrency may offer financial freedom amidst growing government control.

Transcripts

[Music]

governments around the world are

collectively over 300 trillion in debt

now everyone knows it's only a matter of

time before this debt bubble bursts but

nobody wants to be blamed for it or left

holding the bag the most terrifying part

is that the elites appear to be using

this growing debt bubble as a tool to

prevent their opponents from taking

power or keeping them check on the off

chance that they do so today we're going

to explain how government debt is being

weaponized to prevent real political

change from taking place reveal who is

involved tell you what comes next and

what it means for the markets make no

mistake this is one of the most

important videos you will ever

watch in September 2022 Liz truss became

prime minister of the United Kingdom by

the end of October she'd resigned now

the official story was that she was

forced to resign after she proposed a

government spending plan that would cut

taxes without reducing spending which

would increase government debt this

caused the value of UK government bonds

AKA guilts to collapse this in turn put

pressure on UK Pension funds because

they are the largest holders of guilts

the result was that UK Pension funds

were forced to sell guilts to keep

functioning this caused guilt prices to

go lower causing more forced selling and

so on put simply truss's government

spending plan caused the UK pension

system to implode so she was forced to

resign but that's just the official

story in April of this year truss

published a book titled 10 years to save

the West wherein she claims that the

guilt market crash was facilitated by

the bank of England and others in order

to force her to resign now not

surprisingly the media has largely

dismissed this as a crackpot conspiracy

theory and even some of her own

supporters are skeptical what is

surprising though is that not only could

there be some truth to truss's claims

but that we could be seeing the same

phenomenon in other countries where

anti-establishment politicians are being

elected it boils down to who holds the

government debt because these are the

entities that can move markets now

besides Pension funds the bank of

England seems to be the largest holder

of UK guilts truss alleges that the bank

of England contributed to the guilt

market crash by announcing that it would

be selling guilts as part of its rate

hikes prior to her spending plan this is

where things get a bit complicated so

bear with me central banks change

interest rates in three ways by

adjusting the interest rate that

commercial banks used to lend to each

other overnight by buying or selling

government debt and and by announcing

that they will make changes to these two

policies in the future which causes the

markets to move in advance now whereas

adjusting overnight lending rates

changes short-term interest rates buying

or selling government debt I.E bonds

changes long-term interest rates if

central banks sell government bonds it

causes long-term interest rates to rise

and if central banks buy it causes

long-term interest rates to fall again

the mere announcement that a central

bank will do either can be enough to

move the market now here is where things

get interesting most central banks will

not sell government bonds to raise

long-term interest rates instead they

will just refuse to buy new bonds this

is precisely because selling can cause

volatility however the bank of England

made the decision to sell UK guilts

despite these known risks many macro

analysts have since acknowledged that

this was Overkill which begs the

question of whether the bank of England

contributed to the guilt market crash

that resulted in truss's resignation the

answer could be that it was just a

coincidence they were just fighting

inflation when the spending plan was

released so yes but it wasn't the only

Factor at play and there's no way to

prove that it was intentional even so

this begs a much bigger question if

central banks are some of the biggest

holders buyers and potential s sellers

of government dead does this mean that

they can influence government policy and

politicians well the short answer is yes

to understand why though we must go back

in time to the 1980s but before we hop

in the time machine if you're enjoying

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much and now back to you guy now after

the UK guilt Market collapsed there were

many headlines declaring that the

so-called Bond vigilantes had returned

Bond vigilante is a term coined by an

investor named ed yini and it's used to

describe holders of bonds that will sell

or threaten to sell their bonds to

pressure their issuers again this is

because selling bonds causes interest

rates to rise which makes debts more

expensive Ed coined the term in 1980

when large holders of US government

bonds started selling in order to

pressure the Federal Reserve to raise

interest rates more aggressively for

context there was surging inflation in

the 1970s and 1980s then fed chairman

Paul vulker eventually raised interest

rates into the double digits in order to

fight it the more relevant instance of

bond vigilante activity though comes

from the 1990s when large holders of US

government bonds started selling to

protest against then President Bill

Clinton's government spending plan

long-term interest rates Rose from 5% to

8% and the spending plan was

subsequently scaled back now the Bond

vigilantes basically disappeared in the

2000s and 2010s this was mainly because

central banks were actively buying

government debt during this time namely

after the dot bubble burst in 2001 and

after the 2008 financial crisis the

Practical effect of this so-called QE

was that kept bond prices high for

reference buying government bonds

doesn't just cause long-term interest

rates to fall it also causes the price

of these government bonds to rise

logically the Bond vigilantes weren't

too upset about the constant QE as the

whole purpose of their bond investing

activities is to make a profit at least

on paper in practice this all depends on

who the Bond vigilantes are if they're

private entities such as Pension funds

then then yes it's in their interest to

maximize profits in real terms this

means ensuring that they're being paid

back with an interest rate that

compensates them for inflation over the

duration of the bond obviously then the

Resurgence of inflation since the start

of the decade has led to speculation

that the Bond vigilantes are back with a

vengeance in other words large holders

of government bonds are pressuring

governments and central banks to fight

inflation by reducing spend ending and

raising rates again this is because a

failure to control inflation would mean

losses for Bond holders in real terms

the thing is that the largest holders of

government bonds are no longer private

entities that are profit orientated the

consequence of all the QE we've seen

since the early 2000s is that public

entities such as central banks are now

some of the largest holders of

government debt in many countries like

the UK whereas private entities like

Pension funds are incentivized to

maximize returns public entities like

central banks are effectively

incentivized to maximize Politics as

they are effectively a part of the

government and this is where things get

seriously scary particularly for

anti-establishment

politicians take a second to consider

that there are 10 times more Democrats

than Republicans working at the Federal

Reserve now suppos that an anti

anti-establishment Republican politician

is elected president later this year

then imagine that there is significant

bond market volatility after they

propose a government spending plan at

first glance it would look like the Bond

vigilantes are back again selling their

Bonds in protest upon closer inspection

however things could look very different

If the Fed is still running down its

balance sheet or even outright selling

bonds a case could be made that it's

contributing to the market volatility in

fact one could argue that it's the fed's

job to intervene when there's bond

market volatility a mere lack of

intervention from the FED could

therefore be seen as an overtly

political act letting the bond market

crash in order to pressure a Republican

president into resigning but the FED

could claim it's just staying in its

Lane now this might sound crazy but it

looks like it's happening in the EU and

it could happen again in the UK let's

rewind to the Autumn of 2022 shortly

before Liz truss resigned as prime

minister of the UK Georgia Maloney was

elected prime minister of Italy like

truss Maloney had promised to make a lot

of changes if she took charge unlike

truss Maloney has failed to follow

through on most of her policy promises

so far now most assume this is because

she's just another career politician

another puppet of the world economic

Forum that's meant to give the illusion

of a new populist Uprising but deliver

more of the status quo however there's

evidence to suggest that the Bond

vigilantes have been pulling her strings

Maloney reportedly decided to tone down

her rhetoric after seeing what had

happened to truss as you might have

guessed Italy is in a similar position

to the UK the European Central Bank is

one of the largest holders of Italy's

government debt notably it's apparently

been the biggest buyer in recent years

this makes the ECB an entity that's

capable of being a bond vigilante for

Italy as we just discussed public Bond

investors are driven by politics not

profits in this case the political

imperative for the ECB is a continuation

of the EU as an institution as a

right-wing populist Maloney is a threat

to this continuity of course it could be

a coincidence that Italian bonds have

become less volatile as Maloney has

fallen into line with the eu's attitudes

towards things like immigration and the

war in Ukraine but it's possible there a

direct outcome of her compliance comply

and the ECB will keep your bond market

stable additional evidence for this can

be seen in France where bond market

volatility spiked after president

Emanuel macron called a snap election

for those who don't know the right-wing

National rally party led by Marine Le

Pen recently won France's EU elections

foreshadowing a win in the snap election

as with the UK and Italy mainstream

media Outlets reported that the bond

market Vigilantes started dumping French

Bonds in protest at Le Pen's populist

economic policies after a week of record

volatility the national rally abandoned

many of its key proposals including

political and geopolitical ones as many

have pointed out this much Bond

volatility would typically justify ECB

intervention yet the ECB hasn't lifted a

finger at the time of shooting whereas

the bank of England's actions could be

explained by its inflation fight the

ecb's lack of action with France seems

to be inconsistent with its easing cycle

to clarify the ECB recently began

cutting rates and signaled more rate

Cuts were coming this would

theoretically make the Central Bank more

willing to intervene in EU Bond markets

with QE Bond buying this fact is a bit

harder to write off as a coincidence but

it's impossible to prove that the ecb's

refusal to stabilize France's bond

market is due to fears of a far-right

government in France as with our

hypothetical example involving

Republicans and the fed the ECB can

claim it's just staying in its Lane

funly enough that's essentially what the

ECB recently said when asked about the

French bond market not only that but

France's bond market remains incredibly

volatile while this could be explained

by the continually High spending of the

macron government the fact that

Financial media Outlets have continued

to scream about a Leen government being

bad for bonds suggests politics are the

cause further evidence for this comes

from a recent Bond sale by the macron

government the fact that this Bond sale

went smoothly despite bond market

volatility suggests the volatility is

political not economic although the eccb

isn't nearly as involved in French bonds

public institutions are still very large

holders the caveat is that the politics

at play in France could be radically

different from what's happening in Italy

and what happened in the UK and they

could be identical to what's about to

happen in the UK and here is where the

real craziness begins UK prime minister

Rishi sunak and French president Emanuel

macron recently called elections that

caught most people off guard at first

glance it's not clear why either of them

did this given that they're both

projected to lose upon closer inspection

however it appears they know what's

about to happen to their bond markets

the day before sunak called the UK's

election the IMF warned that the UK

government needed 30 billion to

stabilize its debt burden two weeks

before macron called France's snap

election its debt was downgraded meaning

Bond investors are slightly less certain

the country can pay its debts with that

in mind it starts to look like elections

were called in the UK and France because

both countries are at risk of defaulting

on their debts and the parties in power

can do nothing to stop it now this could

once again be a coincidence but it's

evidently a much better explanation than

what's been given and it would explain

why both sunak and macron have been

pushing for objectively unpopular

policies think about it by calling an

election when they're down in the polls

and pushing for policies that push them

lower sunak and macron have guaranteed

that their political parties will not be

blamed for any upcoming debt crisis in

their respective countries their

opponents will be left holding the bag

now this is exactly what Steve Bannon

Trump's former Chief strategist believes

is happening in the UK he believes that

the conservative government called an

early election so that the labor party

will win then the guilt Market will

implode labor will be blamed step down

and the conservatives will return to

clear up the mess in bannon's own words

it's going to be Liz truss times 10

oddly enough though Bannon doesn't

believe that the bank of England was

behind truss's outing and he might be

right you see QE by central banks hasn't

just made them big enough to be Bond

vigilantes it's also reduced the supply

of freely tradable bonds this is

something macro analyst Western Nakamura

has been shouting from the rooftops for

years part of the reason why Bond

markets are becoming so volatile is

because their circulating Supply is

becoming increasingly restricted as

central banks buy up more and more bonds

this is extremely important what it

means is that you don't NE necessarily

have to be a big Bond holder to be a

bond vigilante in plain English you

don't need to be a central bank or a

large pension fund to move bond prices

anymore the restricted Supply makes it

possible for smaller players like hedge

funds and the like to move the markets

in turn this means that the supposed

Bond vigilante activity coming from

central banks and other public

institutions could actually be regular

Bond holders knowingly or unknowingly

playing the role of bond Vig Atlantic it

could actually be regular billionaires

like Bill Gates changing policy and

pressuring politicians by the same token

however the low circulating supply of

bonds means that central banks and other

public institutions could also be

playing the role of Bond vigilantes with

the smallest of changes even the

smallest action or smallest inaction

could be enough to move Bond markets

which is truly wild if this is indeed

the case though then it will inevitably

result in central banks having to buy up

all the government bonds in circulation

as that will be the only way to control

bond market volatility in fact they

could be forced to do so precisely

because if they don't then they will be

accused of being political put

differently central banks will

eventually have to comply with the

politics of whoever is in power because

if they don't the politicians in power

will claim the central banks are being

political and force them to comply which

will paradoxically make them political a

self-fulfilling prophecy come to think

of it the fact that central banks may

only intervene in bond markets once

they've been forced to by the political

party they're potentially protesting

against could cause a delay in the

initial response so this brings me to

the big question of what comes next and

what this means for the markets well in

case it wasn't clear enough it seems

that what comes next is a government

debt crisis of some kind with France and

the UK potentially leading the pack

Canada could also be on the list if it

gets a snap election too FYI Canadian

government debt is also at risk of being

downgraded if that happens and we see a

snap election in Canada that will be

further evidence that snap elections are

being held so that existing politicians

Dodge the debt bubble bullet and

potentially weave their way back into

Power after the shootout this ties in to

what it means for the markets and if

you've been paying attention you'll

already know the answer the only way to

contain bond market volatility at this

point in time is for central banks to

buy more and more of the government

bonds in circulation but it looks like

not all of them will comply for those

unfamiliar central banks are supposed to

be apolitical they're supposed to act

independently of the government as I

mentioned a few moments ago politicians

will eventually have to force central

banks to do whatever is needed to ensure

the government remains funded if they

don't do it voluntarily this will be

easy to do in countries that have their

own central banks like the US and the UK

but it will be very difficult to do in

countries that have shared central banks

like France and Italy that's because it

will be hard for one EU country to force

the ECB to comply with its demands given

that there are other member countries

what this means is that the political

forces in the EU could work the other

way around in the bond markets public

institutions like the ECB could be in a

position to put pressure on Euro

countries by engaging in the bond

vigilante type Behavior it already seems

to be exhibiting with France and Italy

in turn this means that it will be very

difficult to have genuine political

change in European countries that use

the euro the ECB will just refuse to

provide the BuyBacks required to keep

Bond volatility low in the countries

that refuse to comply with the EU again

it will appear apolitical but it will be

very political the only way out for such

countries could be for them to go off

the Euro and launch their own currencies

but that would cause even more

volatility and risk a total breakdown in

Social cohesion alternatively these

countries could adopt other currencies

that give them more fiscal Freedom

regardless of the path however the

destination is the same central banks

will need to buy all the government debt

because at the end of the day it doesn't

matter who is in power the governments

will spend and the promises being made

by politicians to buy votes means

spending will keep increasing the good

news is that this will be very bullish

for risk assets and stores of value

which will capture most of the liquidity

the bad news is that this is going to

result in misallocation of capital

unlike anything we've ever seen

right-wing and left-wing politicians

will spend trillions in the name of

their ideologies all this will do is

increase wealth inequality and political

polarization which will result in even

more radical ideas on how the infinite

trillions printed by the central banks

should be spent the result will be an

enormous loss in purchasing power of

Fiat currencies and people being

desperate for alternatives governments

will present their Central Bank digital

currencies as the solution and many will

probably try to impose them in the name

of the greater good with a bit of luck

however alternative Technologies like

cryptocurrency will be developed enough

to provide an outlet for those looking

for Financial Freedom for everyone else

their wealth will depend on how much

they comply with the demands of whoever

is in power as is currently the case in

places like Russia and China buckle up

because the trend is heading west and

some would argue it's already here so

let's hope we find an alternative

ASAP and that's all for today's video so

if you learn something new be sure to

hammer that like button if you want to

keep learning subscribe to the channel

and ping that notification Bell and if

you want to help others learn about the

growing government debt bubble and how

it will burst be sure to share this

video with them as always thank you for

watching and I'll see you in the next

one this is guy signing off

[Music]