“I drew down and fired straight at it. Capped off two hundred rounds in the minigun, full pack. Nothing… nothing on this Earth could have lived. Not at that range.”

— Bill Duke as Mac in Predator (1987)

Dear Reader,

Some internet denizen has put together a perfect illustration of the global economic response to Covid — using a scene from the 1987 action flick, Predator.

The movie has Arnold Schwarzenegger leading a team of mercenaries through a jungle, where they encounter a killer alien who can become invisible. During their first encounter with the beast, the soldiers fire their heavy weapons indiscriminately for a full minute — laying waste to the foliage while the Predator successfully escapes.

In the edited version, the translucent alien gets labelled Covid. The heroes are subtitled with the names of the world’s central banks, and their weapons are compared to things like printing presses, bond purchases and quantitative easing (QE). The damage they cause is identified as bond markets, value investors, stable prices and more.

At the end, there’s nothing left but a smoking hole in the jungle, which gets labelled “the real economy.”

You can watch the short video here. Just try not to laugh too hard. It hurts. The world’s overzealous monetary policies have done much more harm than good, one can clearly see.

Places like Venezuela, Turkey and Lebanon are already seeing huge spikes in inflation. Bill Bonner relates his experiences in Argentina, where the inflation rate stands at 50%. “It makes everybody corrupt,” Bill says. “The government knows perfectly well that people can’t survive by following the laws carefully.” So corruption “becomes how the system works.”

Are the same things happening in the United States? Let’s ask: “There were something like 18 billionaires who got stimulus checks,” he says. “A lot of the money ended up going to crooks in the Ukraine and in Russia.”

So BIll isn’t too optimistic about the near future. “What we’re going to see is a complicated, messy, confusing, chaotic, and ultimately impoverishing few years,” he predicts. “Inflation has to run its course. The corruption has to do business.”

Any recovery, then, will need to rebuild people’s trust in money. No one will trust modern monetary theory (MMT) anymore.

The easiest solution would be to go back to what has always worked — the gold standard. Limiting cash creation to the amount of precious metals in the world would give currencies the tangible value they currently lack.

If people would rather ignore 5,000 years of monetary history in favor of something a little more modern, there’s always cryptocurrencies.

Back in March, Anya Leonard and Joel Bowman shared their own experiences with Argentinean inflation. “Cryptocurrencies are used to preserve people’s wealth,” Anya told us.

We also recall Hard Asset Alliance’s Jeff Clark telling us that “gold and cryptos have a lot of similarities.” But he also added that “cryptos are still too volatile to be a stable store value.”

Will that change as government fiat currencies get devalued to the point of irrelevance?

Frankly, I have my doubts that ephemeral computer code will be seen as more trustworthy than anything you can physically hold in your hands.

But enough people believe in the power of cryptos to open up some incredible profit opportunities. As Jeff himself said, “cryptos are a wonderful speculation.”

So you’ll want to be on the lookout for a special presentation from James Altucher tomorrow. He’s going to reveal a catalyst that could cause some next-generation cryptocurrencies to spike.

“Bitcoin’s initial run-up was fueled by a lot of retail speculation,” James admits. “But the financial landscape surrounding cryptos has undergone a paradigm shift since then.” Expect an invitation to view his presentation at 1 p.m. EST tomorrow.

Follow your bliss,

Addison Wiggin
Founder, The Financial Reserve