The Phantom Collapse: How Inflation and Liquidity Masks a Crumbling Empire

EDITOR'S NOTES

Jim Rickards, the man who’s stared into the abyss of global finance and lived to write about it, just published a sharp piece titled “Fringe Theories for a Faulty Financial System.” And while he dismisses the more far-out rumors of U.S. default and dual currency regimes, he hits the mark with a deeper diagnosis: the system is broken—and the elites damn well know it. What follows is my take on Rickards’ warning, filtered through the lens of hard-nosed realism and my own contempt for the cartel masquerading as our “free market.”

Derek Wolfe Oct 27, 25

The Dollar’s Devaluation: An Engineered Theft

Rickards is right about inflation being the quiet default—and Milton Friedman would've called it for what it is: taxation without representation. Inflation isn’t just an economic side effect; it’s the state’s preferred method of robbery. The same Fed that claims to fight inflation is the very institution printing trillions in fiat, handing it out like candy to corporate vampires while your dollar quietly bleeds to death in your bank account.

Let’s not forget Friedman’s golden rule: “Inflation is always and everywhere a monetary phenomenon.” And today’s monetary phenomenon? A criminal racket, sanctioned by the Fed, administered by Treasury, and blessed by the Keynesian priesthood in D.C.

Rickards talks about 4% inflation cutting your purchasing power in half every 18 years—but that’s an optimistic lie. The real number, if we accounted for pre-Clinton era CPI metrics, is closer to 8–10% annually. That’s financial euthanasia for anyone on a fixed income.

The Debt-to-GDP Mirage

The talking heads want us to believe everything’s fine if the debt-to-GDP ratio improves. Bull. That metric is just lipstick on the rotting corpse of fiscal discipline. Rickards offers a historical parallel: from 1945 to 1980, the U.S. reduced its debt ratio with bipartisan support. But back then, the dollar had a semblance of integrity. Today, we’re knee-deep in a Fed-fueled fantasy where asset bubbles mask structural decay.

Friedman warned about this too—how state interventions aimed at “smoothing out the economy” only lead to deeper volatility. We’re living proof. The government props up zombie banks, backstops Wall Street bets, and calls it “stability.” What we’re really seeing is the erosion of market discipline—replaced with a centralized command-and-control financial regime.

The Dual Currency Delusion

Rickards rightly laughs off the idea of a dual-currency system—gold for the peasants at home and paper abroad. It wouldn’t survive a week. Arbitrage would kill it, and Gresham’s Law would finish the job. But let’s not get distracted—the idea is floating around for a reason. These schemes get whispered when the ruling class knows the current model is unsustainable. You only start dreaming up parallel systems when your primary one is teetering.

So while the dual system won’t happen, the desperation behind it is real.

A Global Dollar Shortage—Or a Liquidity Trap?

Rickards flags the global dollar shortage, pointing to the Eurodollar market as the canary in the coal mine. This, my friends, is the ticking time bomb. Foreign banks are scrambling for liquidity not because the dollar is “strong,” but because the system is locked in a deflationary vice. We’ve over-financialized the world and now we’re choking on our own leverage.

And Friedman again chimes in from the grave—he warned about liquidity traps and the danger of central banks losing control over real money supply. Today’s Fed doesn't even measure M3. They’ve blinded the public by pulling the very metrics that would expose their insolvency. Why? Because the game only works if the marks don’t see the cards.

The Coming Crackup

Rickards ends by saying the signs are hiding in plain sight. I’ll go a step further—they're flashing neon red, but Americans are too doped up on TikTok and debt-funded dopamine to notice. The roller coaster we’re on isn’t a thrill ride. It’s the rickety scaffolding of a fiat empire in terminal decline.

So here’s your call to action: Don’t wait for Congress, the Fed, or your favorite pundit to fix this. They’re not going to. Protect yourself. Get off the digital plantation. Move your wealth into hard assets, learn real skills, and secure your financial privacy.

And if you’re ready to do more than just sit and watch the collapse, download the survival guide they don’t want you to read:

👉 Seven Steps to Protect Yourself from Bank Failure by Bill Brocius

Stay sharp. Stay free.
—Derek Wolfe