A Fool’s Errand Central Banks Try to Orchestrate ‘Controlled Disintegration’ of System

Aug. 6—Well-connected financial sources report that facing the potential of uncontrolled crack-up of the monetarist financial system, dominated by the City of London and its satrap, Wall Street, the central banks, led by the Federal Reserve are attempting a “controlled disintegration” of their global casino, wiping out trillions of dollars of unsupportable equity through various market operations.

These sources say that this took place Aug. 2-5 when global equity markets lost several trillion dollars in inflated equity values. They say that this was ostensibly set in motion by media hype over the Aug. 2 reports by the U.S. Bureau of Labor Statistics showing a weak jobs market. These and similar softer-than-expected figures for consumer spending ostensibly triggered selloffs that saw the Dow Jones Industrial Average plunge by nearly 2,000 points, with losses to the so-called “Magnificent Seven” high-performing tech stocks—Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla—totaling more than $1.5 trillion.

“Those fairy tales are for the Mickeys,” said a source, “for the unwashed believers in the 'god of the free market.' People, the average person, and even most of the traders and so-called investors, want to believe that they have a chance. But this is a global casino, and if you know anything about a casino, it is that everything is rigged before you walk in, so that in the end, the house always wins. Some gamblers may win a few big ones here and there, but in the end, the mass of all the gamblers, as a whole, always lose. It is the nature of bona fortuna: you gamble, you lose.

“Years ago, back in the 1970s, a Keynesian economist named Fred Hirsch, an advisor to the International Monetary Fund, penned a farsighted tract for something called the Project 1980’s, run by the Council on Foreign Relations (CFR). He recognized that the global financial system, with the forced takedown on Aug. 15, 1971 of the Bretton Woods system, had created a situation that was separating the financial system and its markets from any relationship to the real, i.e., physical economy; that the value of physical production and the services necessary to support that production was becoming untethered from the financial system that was creating its own values, as if out of thin air.

“There was nothing to support those financial values. Fred Hirsch called this process ‘disintegration,’ and said that if a total crack-up of the global system were to be avoided, there needed to be a ‘controlled-disintegration,’ run by the central banks, that would, like a relief valve in a steam engine, wipe out huge sums of value to prevent this boiler from exploding, while also separating the global finaincial market into regions, so that the spread of contagion might be contained. To his credit, Fred Hirsch doubted that this would work for very long, and ultimately that there would be a crack-up and that there would have to be a new, reintegrated system that would, through regulation, control speculation and the tendency of the players in the system to rig it to their benefit.

“The late physical economist and statesman Lyndon LaRouche took this a step farther in 1995 with his now famous ‘Triple Curve Function.’| LaRouche demonstrated an inverse relationship between the growth of monetary and financial aggregates and the physical economy; that growth in monetary and financial aggregates progressively loots and ultimately destroys the physical economy. Inevitably, that process reaches a point where both the financial casino, so created, and the physical economy collapse.

“Well, we have reached that point and the powers that control Wall Street and the central banks are still trying to paper over this chasm in the system through some ‘controlled disintegration.’|”

This and other sources point out that all numbers reported as statistics about the economy are faked, through the manipulation of what and how things are counted. Thus, the figures released last week, with predictable press fanfare, were faked to have a rediscounted effect. The Federal Reserve and other central banks fed the sell-off frenzy, selling assets through their agents, thus setting the rout in motion, and the global sell-off was on, running its course through close of the markets yesterday.

An effect of this sell-off: interest rates on U.S. Treasury Bills have plunged across the board, excluding only the shortest-term (3-month and 6-month bills), and guess what? The Federal Reserve’s Secured Overnight Funding Rate (SOFR), which has risen in the past week to 5.33%, from 5.21%, is now far above all Treasury securities’ rates. The banks and money-market funds are now being enticed to withdraw entirely from investment in the economy, and just build up their capital reserves and excess reserves, and reserves in the Fed’s Standing Overnight Repo Facility, which earns this high SOFR from the Fed.

Now, enraged Wall Street voices are calling for an emergency Federal Open Market Committee (FOMC) meeting to cut rates, charging that the Fed has blundered terribly by putting off a rate cut from its meeting last week, to its next meeting in September.

“The Fed and the other central banks are playing a dangerous game here,” said another source. “The system is really over-baked and prime for a big-time collapse—an uncontrolled, complete crack-up, which many insiders know cannot be avoided, and at some point, even not delayed.

“So, the Fed was back in the market this morning. I assume the other central banks were as well, buying stocks to push up the Dow and various indexes, before the markets opened. That, along with the usual bullshit from analysts that say you buy after a 5% drop, that there is value out there, pushed the markets up. The Dow clawed back some of its losses today, which profit-taking trimmed to a 300-point rise. Overnight indicators, and similar market interventions by the central banks, point to market rises, at least initially on Wednesday (Aug.7), But the volatility, once unleashed, is here to stay—until the big crack-up.

“But this can’t really go on,” the source concluded, "despite Fed interference, the controlled disintegration schemes have run their course. Regardless of what happens this time, this is all coming down, and soon. Maybe even before the election. Then, bye-bye Kamala [Harris, the putative Democrat nominee], we hardly knew ya. But hey, even that was too long. The reality is the Fed is doing what it usually does, because that’s all it knows how to do.”