Simulating a Collapse of the Global Financial System

Good Morning Everyone,

It was reported recently that a group of 10 Nations, The World Bank, Bank of International Settlements and the IMF ran what they called a “War game” to simulate a “cyber attack” on the global financial system.

“Israel on Thursday led a 10-country simulation of a major cyberattack on the global financial system in an attempt to increase cooperation that could help to minimise any potential damage to financial markets and banks.”

There is not much information given about what a cyber attack means specifically, other than saying it’s likely caused by “sophisticated” players where by sensitive data is leaked on to the dark web.

Clearly these pseudo-elites are not running this so called war game for fun - they must have some very real concerns that something is likely to happen to the legacy banking system, but beyond a run on the banks, it’s not clear to me exactly what.

Using terms like “dark web” simply adds to my suspicion, as anyone that can use a web browser can access this clearly evil and highly frowned upon section of what was intended to be a completely free and open internet until governments realised the re-distribution of power that was happening as a result of this society altering transformation in communication capabilities, they have undertaken a narrative attack to try and steer their highly obedient subjects in the opposite direction.

Surprise surprise, as a part of the simulation, and so called “solution” to protect the financial system, more liquidity is required to be pumped into the system to patch over the holes.

"The banks are appealing for emergency liquidity assistance in a multitude of currencies to put a halt to the chaos as counter-parties withdraw their funds and limit access to liquidity, leaving the banks in disarray and ruin," the narrator said.

The article goes on to say:

“The participants discussed multilateral policies to respond to the crisis, including a coordinated bank holiday, debt repayment grace periods, SWAP/REPO agreements and coordinated delinking from major currencies.”

As if the crisis of 2008 didn’t make the issues obvious enough, it’s an absolute certainty that while the system continues to operate, albeit in this hamstrung fashion, it will not be the last crisis. And with each crisis the outcomes become more and more catastrophic requiring greater and greater levels of intervention to keep the system from ultimate failure.

Whats really fascinating is despite the impact of 08 and 2020, most still have no idea what is going on here. It would appear that a large majority of the worlds population still do not even realise why bank holidays even exist - which is to prevent citizens being able to access their capital when there is a run on the banks.

A run on the banks is only an issue because banks operate fractional reserves - you can see for yourself what the US Federal reserve contains here - predominantly gold stock and government debt. Even more interesting, the Fed used to track and publish their gold holdings, but as you can see here - this information has not been published since 1949.

If every dollar that they claim to hold is requested, there would be a societal level break down in trust. As former fed chair, Paul Volcker explains here - The only thing currently backing the Global Reserve currency, the US Dollar, is confidence, he says.

“What backs the dollar today is confidence - that we will maintain reasonable stability in its purchasing power over a period of time. Nothing more than that. It’s confidence.. and not just in the federal reserve and in government, in society.. And we’d better maintain that confidence. There are a lot of things going on that raise too many doubts.”

Why do banks choose to do this then? Because this current system, or better described as a monetary experiment, is designed in such a way that never ending growth or credit creation is required for the system to continue to function. Which would seem to be an obviously absurd notion, but is simply the reality. Most likely they just had no better solutions at the time for this system, so this was the path of least resistance.

This seems utterly insane to me.

We have a system completely manipulated by central banks and governments, that is in complete opposition to the rights and best interest of the worlds population. Whereby if everyone actually decides they wanted to stress test this system, and remove their capital, the system would completely collapse.

It is as fragile as a plate in a china store, and the only way it is maintained is by limiting access to your property - something that is rightfully yours - creating more pretend monopoly money, changing of debt repayment agreements and contracts all the while trying to persuade you into believing that it is for your own good, and under the guise of a “public holiday” which is at the expense of businesses. Madness.

If a monetary system is not capable of supporting an individuals property rights, requires never ending manipulation and intervention and requires government to essentially gas light their populations in believing false truths, it is a broken system in need of a replacement. This is clearly the case. However there are many rent seeking pseudo-elites that continue to benefit massively from this broken system at the expense of many many people. Hence they want to keep the game going for as long as possible, and appear to have little regard for the consequences this poses to others.

Bitcoin clearly is this better system. The degree to which it is superior is indisputable. Our current system incentives pseudo-elites to benefit at the expense of the many. To operate in secret in a closed way and where by the rules can change without any knowledge to the public. This is a system that incentives dishonesty and deceit to exist at the absolute base layer of our society.

Compare this with a system that is completely global by design. Open, public and borderless. Where no central authority can change the rules to benefit themselves and in-fact it is in contrary to the incentives to even try, and the path of least resistance is to support the system as this in your best interest economically speaking.

Even if a network actor could afford to try to attack the system, the incentive structure is such that it is economically prohibitive to do so, and you would be wiser to simply deploy your resources to support the system, by adding hash rate, further securing the network, and you would benefit far greater economically by doing so.

While central banks and governments work to plan how they will try to manipulate their monetary systems and the people of their respective countries, an ever growing group consisting of some of the most incredible minds on the planet are working tirelessly to build out an alternate system built upon win/win incentives in a completely open, decentralized, bottom-up manner that anyone can access from anywhere in the world and no centralized group or entity can control.

It should be expected for most parties concerned to continue to follow the incentives of the current system, the path of least resistance, but its only a matter of time until sanity is reinstated and we collectively acknowledge reality and stop trying to cling to the past by embracing this new system that will empower a level of global inclusion and innovation like nothing we have seen before.

Bring it on. I cannot wait.

I anticipate it will continue to be a bumpy road as many will resist change, but as we have seen, the resistance is futile over time and the transition is already well under way.

Hope you have a great day, and look forward to speaking with you tomorrow.

AK

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