(Mises)—Suppose you bring a fur coat to a dry cleaner and later discover that the owner allowed his wife to wear it before cleaning it (an episode from Seinfeld). Or suppose you gave your car keys to a hotel valet and was told he lent your car to teenagers who took it for a joyride while you were sleeping at the hotel. You would not be too happy and for good reason. When you surrendered your clothes or your car keys, it was a bailment. You retained ownership and gave the clothes or car keys for safekeeping. In no shape or form did you surrender ownership of the items or lend out your property.
Suppose you lived in the eighteenth century and had a hundred ounces of gold. It’s heavy, and you do not live in a safe neighborhood, so you decide to bring it to a goldsmith for safekeeping. In exchange for this gold, the goldsmith gives you ten tickets on which are clearly marked as claims against a total of ten ounces. Now, gold is heavy and burdensome to carry, so in a short period of time, those claims will start circulating in place of gold. This is the creation of near monies. This doesn’t mean you have given up your ownership claims on gold but have instead used a simpler way of transferring ownership on this gold.
Of course, the gold now just sits in the vault, and no one usually comes to get some of it or even checks that it is still there. Quickly, the goldsmith realizes there is an easy, fraudulent way to get rich: just lend out the gold to someone else by creating another ten tickets. Since the tickets are rarely redeemed for actual gold, the goldsmith figures he can run this scam for a very long time. Of course, it is not his gold, but since it is in his vault, he can act as though it is his money to use.
This is fractional reserve banking with a reserve of 50 percent. This is also how the banking system can create money out of thin air, or basically counterfeit money, and steal the purchasing power from others without having to produce real goods and services. On March 26, 2020, the United States central bank reduced reserve requirements for US banks to 0 percent from 10 percent in reaction to the economic effects of the covid pandemic.
Now the goldsmith, or what we will now call a bank, is limited in the amount of fraud or counterfeiting it can commit. There is a hundred ounces of gold and claims on two hundred ounces of gold. The bank must keep a certain amount of gold in its vaults since depositors on occasion will exchange tickets for gold. Another constraint is that depositors, if they get suspicious that there are more claims than available gold, may run to the bank demanding to redeem their “on demand” claims into gold.
This run, really, only reflects the totally fraudulent nature of banking. Banking holidays, which were implemented in the ’30s, or capital controls, which were implemented recently in Cyprus, are actions to benefit the fraudster (the banks) instead of the victim (the depositors). Of course, the European Central Bank supported these actions by Cyprus. The world has been turned on its head.
Suppose you are the goldsmith, and your rich uncle promises to lend you as much gold as you need if you happen to run out (the lender of last resort function of the central bank). Are you likely to commit more fraud? Suppose this rich uncle tells you that if things go bad, he will make sure everyone gets their gold back (deposit insurance). Again, are you likely to commit fraud? Since you have no skin in the game, are you likely to take even more risks, for higher returns, in your lending activities?
Austrian economists have a hard time explaining why fractional reserve banking is fraudulent. The standard response from the average Joe is that “everyone knows that the bank loans out your money.” Or they will say that “all banks in the US include a clause in the depositor’s contract that specifically says that the relationship between the depositor and the bank is exclusively one of creditor and debtor.”
Suppose the bank takes your money and loses it all. How does the bank satisfy your expectation that the money is there on demand to pay your rent and electricity bills? It’s simple. They take the money from someone else. If the bank had told you that the money is unfortunately lost, there would be no fraud (if you had signed a clear statement on the use of your funds). The fraud occurs the minute the bank takes someone else’s money. The victims of the fraud are the other depositors.
The bank essentially runs a Ponzi-like scheme (a fraudulent activity) that can continue for a very, very long time, but it is no less a fraudulent activity and should be treated as such. Although you and the bank may be aware of what is going on, it still should be treated as fraud. The fact that you are aware, or even unaware, of the Ponzi-like scheme does not diminish the fraud. Government deposit insurance just shifts the ultimate cost of the fraud to other depositors, taxpayers, or anyone using currency to conduct transactions.
Why is counterfeiting illegal? The counterfeiter is happy since he gets real goods and services, and the store owner is happy since he made a sale and can also get more real goods and services if he spends the money quickly before prices go up. So where is the problem? The transaction has been beneficial to both. It is illegal because of third-party effects.
The counterfeiter takes from the economic pie but does not contribute to the economic pie. He has basically stolen real goods and services by reducing the purchasing power of the money in everyone else’s pockets. When the fractional reserve banking system creates money out of thin air, it is also a form of counterfeiting and has undesirable third-party effects. Economists know that it is the rapid expansion of money and credit, unjustified by the growth of slow-moving savings, that has created the booms and busts of the last two centuries, and the hardships that have gone along with them.
Eliminate fractional reserve banking and you eliminate booms and busts. Unable to create money out of thin air, banking would now just be another sector without the ability to sink the entire world economy.
We need to start a serious discussion about ending fractional reserve banking, and central banking at the same time. Our current banking system is not free market capitalism. Banking in its current form should be outlawed because it is both fraud and theft.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
Did the Rothschilds create it? Or the Medicis of Renaissance Italy?! The 1400s was the era the Italian monks were supposed to have created double–entry bookkeeping —— also the time the Dutch created the STICHTING (Dutch for “foundation”), the all–encompassing financial magic allowing for the 2018 “news” reported by NPR that a billionaire “donated $1 billion to charity” — his tax attorneys moved his $1 billion in assets, stocks and bonds on his personal financial statement, to a newly created foundation he controls, so they removed $1 billion he could be directly taxed for to a legal entity (stichting) he still controls — a tax dodge making his stocks invulnerable to any hostile takeover!
Double–entry bookkeeping plus the stichting —— a killer combination! (The congressional populist, Wright Patman, did most of the government studies into foundations & trusts, while Ferdinand Lundberg explained them in his classics, “The Rich and Super—Rich” and “The Rockefeller Syndrome”! Highly recommend all books by Dimitri Chorafas as well. A most remarkable financial guy and financial history scholar!)
Credit deratives are the ultra–extension of the fractional reserve system; while rendered seemingly hyper–complex, they are really quite simple: the layered fractionalization of the fractionalization of the fractionalization –ad infinitum – of the fractional reserve system, hence so many classes and categories of credit derivatives, quite the shell game of Deep Finance! (So instead of $8 loaned for every $1 on deposit — the classic example of the fractional reserve system — that $1 on deposit yields $1 million or $100 million with excessive credit derivatives –– but since such isn’t on hand, government [central banks and central bankers] must remonetize with neverending BAILOUTS! So to speak!?)
(Cap–and–trade, carbon permits, etc. are a small subset of the extension of the fractional reserve system, yet another financial scam!)
https : //rumble [dot] com/v4kr9i6-g.-edward-griffin-one-world-government-exposed-what-now [dot] html
https : //www [dot] jonesday [dot] com/-/media/files/publications/2016/02/shedding-light-on-the-dutch-istichtingi-the-origin/files/shedding-light-on-the-dutch-stichtingpdf/fileattachment/shedding-light-on-the-dutch-stichting.pdf
The national debt can be easily explained by one simple example: when hedge fund “genius” (super crook) John Paulson got together with Goldman Sachs in the early 2000s and created trash CDOs pumped out by them, they then purchased “unregulated insurance” called CDSes, or Credit Default Swaps: spending $1.4 million per CDS, with payouts of $100 million for each CDS when those trash CDOs were officially designated as worthless, having “no valuation”!
Who ultimately paid for that? The American tax base! Thefts from the tax base! There’s a one–to–one correlation between the rise in American billionaires and the rise in the national debt ——— NO COINCIDENCE!
So when BILL GATES’ Gates Foundation makes a “donation” (actually tax–subsidized investment) to a corporation which has declared some process they are involved in as “charitable in nature” — his investment is subsidized, or paid for, by the American tax base –double profit at the expense of the national debt!
Why the Gates Foundation is in actuality the largest biopharmaceutical corporation in existence, although “officially” the #1 is Pfizer, the Gates Foundation is around 100 times Pfizer’s size!
The GATES FOUNDATION is PHARMA!