Individual Economists

Offload Risks Onto The Bottom 90% And Immiseration Follows

Zero Hedge -

Offload Risks Onto The Bottom 90% And Immiseration Follows

Authored by Charles Hugh Smith via OfTwoMinds blog,

The underlying story of the past 50 years has been the offloading of risk onto workers and consumers.

On my map of how the world works, we start with structures of control that distribute the good stuff--resources, assets, income and power--and the bad stuff: costs, losses and risks. As I explained in The US Economy In a Nutshell: Privatize the Gains, Socialize the Costs, the current arrangement distributes the gains to the top 10% and the costs and risks to the bottom 90% via privatizing the gains and socializing--i.e. dumping them onto the biosphere and the public--the costs and losses.

This follows a power-law distribution: the few at the top reap most of the gains, and the leftovers, scraps and crumbs are distributed in descending order, with most of what's left going to the top 9.5% and a diminishing dribble is scattered over the lower 90%, so that by the time we get to the bottom half of households, 170 million people own a grand total of 2.5% of the nation's financial assets, while the top 0.1% own 16.6%--6.6X the bottom 50%.

A key mechanism in this wildly asymmetric distribution of gains and costs is the system favors capital over wages. As the charts below illustrate, the financial gains go to the owners of capital, and since ownership of capital is highly concentrated, these few owners siphon up the vast majority of the gains.

One way to understand how the current arrangement favors capital over wages is to reverse the tax liabilities of capital and wages. Employers and employees pay 15.3% of every dollar of wages in Social Security / Medicare taxes, plus income taxes that quickly rise to 22%, for a total tax rate of 37.3% on wages. (Note self-employed people like myself pay the full 15.3% ourselves, as we're both employer and employee.)

Capital gains are taxed at 20%, but only when the asset is sold, so the wealthy borrow against their unrealized gains and live off this borrowed money to avoid selling and having to pay tax on capital gains. And since the system depends on debt to survive, the interest on debt is deductible, giving the wealthy borrowers a tax deduction for avoiding capital gains.

Now imagine all capital gains, realized or unrealized, were taxed at 37% and the first $80,000 of wages were tax-free. The median wage is around $80,000, hence my picking that number. As for the hue and cry about unrealized capital gains being taxed, that's easily addressed: unrealized gains in primary-residence owner-occupied homes and retirement accounts would be exempted. Every other gain made playing in the casino would be taxed.

Reversing the asymmetry of tax liabilities would dramatically alter the distribution of gains and costs. Wages have lost ground for 50+ years, and the favoring of capital is a key driver of this decline in the share of the economy that's distributed to wage earners.

Half the nation's households--170 million people own a grand total of 2.5% of the nation's financial assets:

The winner-take-most arrangement favoring capital:

Another key driver is the offloading of risk from owners to consumers and workers, a perverse process that has been obscured by incremental degradation. Risk is a strange phenomenon that defies easy definition. Risk isn't a direct loss or cost; it's the probability of losses and costs arising in what appears on the surface to be a stable arrangement.

Consider the stunning decline in the quality of durable goods such as appliances, and global industry adopting a laughably valueless one-year warranty across the board. Appliances that routinely lasted 30 years before "Progress" took the reins now routinely fail in 3+ years.

In the good old days before "Progress" took the reins, manufacturers absorbed the risk of premature failure of the goods they produced. Now this risk has been offloaded onto consumers, who are now forced to buy "extended warranties" as the only means of mitigating the risk they now carry of premature failure.

This is in effect a form of extortion: "nice refrigerator you got there, too bad it's at risk of breaking." Well, if current manufacturers had the same standards as previous generations, we wouldn't need "extended warranties." Welcome to the Mafia Economy: low quality goods and services force "upgrades," i.e. extortion.

Consider the offloading of risk onto workers. Employment other than casual labor once included healthcare insurance and other basic benefits. In the "gig economy" of contract employment and gigs, the worker is now responsible for paying their Social Security / Medicare taxes, healthcare insurance and retirement contributions.

The decline of hourly wages is another offloading of risk onto the worker. The percentage of workers paid by the hour has declined in favor of salaried positions with open-ended demands on workers: where hourly workers get paid for hours on the job, salaried workers are now on the hook for work beyond a conventional 8-hour work shift.

Then there's the immense mass of risk and labor that's been offloaded onto consumers and workers as shadow work, often the result of having to fix failures in goods and services that were once the responsibility of the provider or employer and have been dumped on consumers and workers. This is a topic I've often addressed.

This Is Why You're Drowning in Busywork: We have been told that A.I. will take people's jobs. What no one mentions is that many of those jobs are landing on us. The A.I. revolution involves a huge transfer of labor-- not from worker to machine but from worker to consumer. (nytimes.com, paywalled)

Another source of risk is the dependence on debt to fund the lifestyles we deserve: as the purchasing power of wages has declined, the easy "solution" is to fill the gap between what earnings can buy and what we want / need / expect / deserve with borrowed money.

As we all know, debt comes with risk, as falling behind greases the slide to default, bankruptcy and ruin. 27% interest rates on credit cards steepen the slide into a cliff: one missed payment can trigger a cascade of events that cannot be reversed. This is why I often observe that fewer bad things can happen if you have no debt.

Last but far from least, is the current arrangement's dependence on serial credit-asset bubbles as the sole driver of "growth", a dependence that has led to a casino economy in which wage earners lose ground and in desperation turn to gambling as their last-ditch hope of gaining ground.

But despite 24/7 assurances that "this isn't a bubble," all bubbles pop with devastating consequences for those who believed the assurances of those operating the casino.

The underlying story of the past 50 years has been the offloading of risk onto workers and consumers, with the inevitable consequences being higher costs and losses leading to impoverishment and immiseration. We're frogs in water that's getting measurably hotter, and it's getting harder to muster the means to jump out of the simmering pot.

*  *  *

My book Investing In Revolution is available at a 10% discount ($18 for the paperback, $24 for the hardcover and $8.95 for the ebook edition). Introduction (free). Become a $3/month patron of my work via patreon.com. Subscribe to my Substack for free

Tyler Durden Tue, 07/14/2026 - 16:20

Venezuela's Oil Revival Faces A Critical Services Bottleneck

Zero Hedge -

Venezuela's Oil Revival Faces A Critical Services Bottleneck

Authored by Rystad Energy via OilPrice.com,

  • Venezuela could increase crude production by about 194,000 bpd by late 2028, with most growth coming from existing producing fields rather than new discoveries.

  • International oil companies led by Chevron are expected to deliver nearly two-thirds of the forecast production increase through brownfield investments.

  • The biggest obstacles are operational, including drilling rigs, diluent supplies, infrastructure upgrades, and a competitive fiscal regime capable of attracting long-term investment.

Venezuela's upstream industry has entered a new phase. Following sweeping hydrocarbon reforms and broader geopolitical developments in early 2026, the conversation has shifted from whether the country can reopen its oil sector to whether it can successfully execute a meaningful production recovery. The country's resource potential has never been in doubt. The greater challenge now lies in converting policy momentum into sustained operational growth.

Rystad Energy estimates Venezuela's crude production could increase by approximately 17%, or around 194,000 barrels per day (bpd), between the fourth quarter of 2025 and the fourth quarter of 2028. Importantly, this growth is expected to come primarily from existing producing assets rather than large-scale new discoveries, highlighting that operational execution, not resource availability, will determine the pace of recovery.

Near-term production growth will be dominated by heavier crude grades. Around three-quarters of Venezuela's output through 2028 is expected to come from heavy, extra-heavy crude and bitumen, with the Orinoco Oil Belt accounting for roughly 60% of total production. This makes access to diluents, workover activity, infill drilling, and mature field management considerably more important than reserve additions over the next several years.

Venezuela upstream figure 1

International operators are driving the recovery

International oil companies (IOCs) are expected to contribute nearly two-thirds of Venezuela's forecast production increase through 2028. Chevron remains the largest contributor, followed by Repsol, Eni, Maha Energy and Maurel & Prom. Most of this growth is expected to come from expanding production at existing joint ventures, reflecting renewed investment following regulatory changes and sanctions relief rather than greenfield developments.

Chevron continues to occupy a particularly strategic position. Recent portfolio adjustments have strengthened its exposure to the Orinoco Oil Belt, while future production growth is expected to rely on brownfield optimization, infill drilling and the phased development of Ayacucho 8. Beyond Chevron, companies such as Eni and Repsol continue to play a dual role in both Venezuela's crude and natural gas sectors through assets including the Cardón IV block and the giant Perla gas field.

However, international participation remains highly selective. Companies continue to balance the opportunity presented by Venezuela's vast resource base against fiscal uncertainty, operational complexity and long-term investment risk.

Execution, not geology, remains the key constraint

While policy reforms have improved the investment outlook, they do not eliminate the operational bottlenecks that have constrained production for years.

Sustained production growth will require continuous access to diluents, higher drilling activity, extensive workover campaigns, improved infrastructure and significantly greater rig availability. These operational requirements represent the critical link between resource potential and realized production.

Fiscal competitiveness also remains an important consideration. International operators have indicated that future capital commitments will depend on further improvements to Venezuela's fiscal framework, particularly around royalty rates and taxation. Lower project breakeven costs through more competitive fiscal terms could materially improve investment economics and encourage broader participation across the sector.

Oilfield services could become the industry's defining bottleneck

Perhaps the greatest challenge facing Venezuela's recovery lies beyond the upstream operators themselves. The Venezuelan Oil Ministry has identified a requirement for 93 active drilling rigs by 2028, a significant increase from current activity levels. Achieving this target would require a phased expansion involving reactivating domestic rigs, refurbishing idle equipment, and eventually importing additional rigs from international markets.

This creates substantial opportunities for drilling contractors and oilfield service providers but also highlights the scale of the execution challenge. Companies must balance equipment mobilization costs, contract duration requirements, and country risk before committing capital.

Local contractors have begun reactivating existing fleets, while international service providers remain more cautious, waiting for greater evidence that recent policy reforms will translate into a stable, commercially attractive operating environment. As a result, rebuilding operational capacity may ultimately prove just as important as attracting upstream investment.

Venezuela upstream figure 2

The next phase depends on implementation

The 2026 Hydrocarbons Law represents one of the most significant structural reforms to Venezuela's upstream sector in decades. By expanding opportunities for private participation and introducing greater fiscal flexibility, the legislation has created a more attractive framework for future investment.

Yet legislation alone cannot restore production. The speed of implementation, the stability of fiscal policy, continued sanctions relief, and the industry's ability to rebuild operational capacity will ultimately determine whether Venezuela can translate ambition into sustained output growth.

For investors and operators alike, the opportunity is considerable. But the country's upstream revival will depend less on the size of its resource base than on its ability to consistently execute across drilling, infrastructure, services, and investment policy. That execution gap, not geology, is likely to define Venezuela's production trajectory over the remainder of the decade.

Tyler Durden Tue, 07/14/2026 - 15:45

Lucid Calls Bankruptcy Report "Completely False" As Shares Stage V-Shaped Recovery

Zero Hedge -

Lucid Calls Bankruptcy Report "Completely False" As Shares Stage V-Shaped Recovery

Summary: 

  • Lucid Exec Calls Bankruptcy Report 'Fake News' 
  • Lucid Reponds, Denies AlixPartners Has Recommended Bankruptcy Route  
  • Lucid Crashes On Report It's Weighing A Take-Private Or Bankruptcy
Lucid PR Head Calls Report "Completely False" 

Nick Twork, Lucid's chief communications officer, took to X in late-afternoon trading to deny Electric-Vehicles.com's report about a potential bankruptcy, stating that the "company has sufficient liquidity to carry its operations well into next year, as recently published in its last quarterly filings, and it has not formed any special board committee to explore the scenarios reported today."

Twork stated:

The rumors are completely false. The company has sufficient liquidity to carry its operations well into next year, as recently published in its last quarterly filings, and it has not formed any special Board committee to explore the scenarios reported today.  Our focus is on improving execution, strengthening operations, and positioning Lucid to realize the full potential of its technology, products, and innovation. AlixPartners is assisting us in that and nothing else and has not recommended bankruptcy to management or the Board. We

Shares crashed nearly 50% at one point today and, in the final hour of trading, staged a V-shaped recovery. 

Bloomberg data show Lucid is heavily shorted, with 37.22% short, or about 63.6 million shares.

One can only assume that short sellers used the crash to cover some of their bearish positions.

Lucid Denies Report 

Lucid responded to Electric-Vehicles.com's report, stating that restructuring adviser AlixPartners has not recommended bankruptcy.

Bloomberg headline:

  • LUCID SAYS ALIXPARTNERS HAS NOT RECOMMENDED BANKRUPTCY

Electric-Vehicles.com's report did mention that another strategic option would be a take-private transaction.

Here are Lucid's top shareholders:

Lucid Crashes On Report It's Weighing A Take-Private Or Bankruptcy

Shares of struggling EV maker Lucid plunged as much as 49% after auto-industry news website Electric-Vehicles.com reported that the company is working with restructuring adviser AlixPartners to evaluate strategic options, including a potential take-private transaction or a Chapter 11 bankruptcy filing.

Lucid EV

Here's more from the report:

According to the sources who spoke on condition of anonymity because the review is strictly confidential, AlixPartners is urging the board to run one more round of restructuring in the United States and Europe, and to narrow the company's focus onto its Gravity SUV.

. . .

One person close to the matter told EV that the two starker questions, whether Lucid should be taken private or seek Chapter 11 protection, are among the scenarios the adviser has been asked to weigh.

Neither, the person stressed, is a decision the board has taken.

Shares were halved in late-afternoon trading in New York... Multiple trading halts were seen. 

How long until Lucid denies the report?

Tyler Durden Tue, 07/14/2026 - 15:41

IRGC Vows 'Not A Drop Of Oil & Gas Will Be Exported' From Region Amid Sustained Cross-Gulf Fighting

Zero Hedge -

IRGC Vows 'Not A Drop Of Oil & Gas Will Be Exported' From Region Amid Sustained Cross-Gulf Fighting Summary:
  • Iran-US fighting is sustained but in tit-for-tat pace, with new reported strikes across the Gulf.
  • Trump declares FULL blockade on Iranian ports, while IRGC asserts 'wartime control' of Hormuz.
  • Trump drops 20% transit fee plan; oil prices ease.
  • Multiple tanker attacks over past day again disrupt shipping & cause casualties.
  • Regional conflict expands with reported Houthi missiles on Saudi Arabia.
//--> //--> //--> Strait of Hormuz traffic returns to normal by August 31?
Yes 12% · No 89%
View full market & trade on Polymarket

*  *  *

IRGC: Iran to 'Control Entire Strait in Wartime'

Amid ongoing cross-Gulf attacks today between Iranian and US forces, the IRGC says they targeted enemy weapons and parts storages in Bahrain and Kuwait. This after the US appeared to attack some critical Iranian infrastructure on coastal islands.

The IRGC has issued a fresh statement via state media on Tuesday, saying that "as long as the US evil stays in the region, not a drop of oil and gas will be exported from the region." It said further, per the press release:

  • US aggression will have no result other than delaying the opening of the Strait of Hormuz.
  • Targeted drone ramp in Kuwait's Ali Al Salem air base; today's attacks in response to US attacks on Iran.

ABC is meanwhile reporting during the mid-afternoon (US time) that American airstrikes on Iran have been underway for the last couple of course. And yet still, Iran's IRIB has said that the Islamic Republic "must control the entire Hormuz Strait in wartime". The region is being plunged back into full-fledged war, also as fighting between the Saudis and Houthis in Yemen appears to be breaking out.

Morning warnings from Tehran late Tuesday: Iran's deputy foreign minister says if the US thinks its military attacks and blockade will force them to request negotiations, it's making a mistake.

Trump Backs Off 20% Fee Plan For Hormuz, Asserts 'FULL Blockade' 

It's the return of another TACO Tuesday as President Trump in a lengthy Truth Social missive appears to have reversed his plan to collect a 20% of cargo fee for international vessels wishing to transit the Strait of Hormuz.

"Oil is flowing like never before," he began (except it's not...), before writing, "Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States. Those Investments will be MASSIVE but, at the same time, extraordinarily good for them, and their future." He echoed the same in follow-up with reporters at the White House:

So Gulf allies, and likely officials within his own cabinet, have talked Trump out of the 20% collection scheme idea, which would have likely in the end just shifted leverage back over to Iran, given its own much cheaper passage protocol scheme.

US OIL PARES GAINS, WTI TRADES NEAR $78/BBL

Oil prices decline on the stated reversal in plans:

...amid emerging reports of fresh Iranian attacks on Kuwait:

The battle for Hormuz has ramped up after the United States has undertaken three consecutive nights of major bombing raids against Iranian targets.

All the while President Trump is said to be "very serious" about his plan to impose a 20% toll on cargo transiting through the Strait of Hormuz, a Semafor report says, citing a White House official who says the president has desired such a plan for months. Both warring sides are insisting that it is their side alone which will be 'guardian' over the strait.

AFP/Getty Images Iran FM Trolls Trump Toll Scheme

Iran's foreign minister Abbas Araghchi took some jabs at the proposed US plan soon after Trump unveiled it on Truth Social.

"POTUS is absolutely right. Whoever provides secure and safe passage of commercial vessels through the Strait of Hormuz should be compensated for this service," Araghchi wrote on X. "20% is of course too much. We will be fair," he added.

Below: ongoing reports that the Houthis are entering the war after Monday missile attacks on the kingdom:

The same day, a clip of Secretary of State Marco Rubio from late June insisting that "no country" can extract tolls went viral. "That's the law. It's an international waterway. No country is allowed to charge tolls or fees on an international waterway," Rubio said.

"That's existing international law. That's the way it is in international waterways all over the world and that's the way we'll expect it'll be here." He added: "I think all the countries in this region would agree."

Meanwhile Iranian sources continue to warn the West, also with dramatic images of tankers exploding:

Gulf Air Defenses Active Night & Morning

German shipping company Hapag-Lloyd says also agrees that charging fees for what is in reality international waters and thus under the control of no single nation "would be fundamentally wrong".

Even amid a relentless bombing campaign, Iranian forces have not shown signs of backing off their enforcement of their navigation protocol.

The Islamic Revolutionary Guard Corps has on Tuesday newly "targeted and disabled" two supertankers for switching off navigation systems which involved "ignoring warnings and endangering navigation," according to Tasnim.

Al Jazeera reports early Tuesday, "It's been an active night and morning for air defense systems in several countries in this region because of missiles and projectiles fired from Iran."

"This has affected the ship traffic passing through the Strait of Hormuz. Yesterday, we saw the lowest number of ships passing in five weeks," it continues, adding: "There were only six ships. The day before that, there were 14."

Multiple Tankers Attacked Over Past Day, Casualties

At least three tankers have been struck overnight into Tuesday, with among them:

The tanker Stolt Magnesium has caught ⁠fire after the “explosion of an unidentified external device” as it was ⁠sailing in the Arabian Sea off Oman, its ⁠manager, Stolt Tankers, says.

The incident occurred at 12:40am (20:40 GMT on Monday) and caused a fire in the ‌vessel’s engine room, the company said in a statement.

The UAE and Gulf allies have strongly condemned the 'brazen' attacks on international shipping.

Source: CNN

There are growing deaths among seafarers in what's obviously the world's most dangerous and volatile energy transit water way. India has formally summoned Iran's deputy ambassador after an Indian sailor was killed.

According to the UAE defense ministry, the casualty occurred when two Iranian cruise missiles targeted two UAE vessels in the crucial shipping lane, leaving one Indian national dead and eight others wounded.

More latest developments

via Newsquawk...

  • US President Trump reiterated that Iran has no air force, no navy and no military, while he said they will hit Iran very hard on Monday night and on Tuesday. Trump said they had a deal yesterday and that Iran breaks deals, as well as commented that the MoU was built to test Iran and that Iran didn't honour it. Trump also stated that they will hit 'Pickaxe Mountain' pretty soon and have their eyes on the site all the time, which is a good potential target
  • US Central Command announced that it conducted and completed a third consecutive night of strikes against Iran, with US strikes reported in Bushehr, Bandar Abbas and Bandar Kangan, while explosions were also reported in Iran's Qeshm Island and Kish Island. More recently, there have been reports of explosions have been heard near Bandar Abbas, Bushehr and Choghadak.
  • Details of US President Trump’s proposed Strait of Hormuz toll plan are still being finalised, according to Semafor, saying Trump is 'very serious about the tolls.
  • Iran's armed forces have begun targeting US naval vessels in the Strait of Hormuz with cruise missiles, Al Mayadeen reported.
  • Iranian Army Spokesperson said the Strait of Hormuz will not be open with US aggressions and war, SNN reported.
  • IRGC said it targeted weapons warehouses, satellite communications centres, and US forces' housing building at Bahrain's Juffair base. Iran's army also targeted US military facilities and equipment in Kuwait with drones, as well as targeted a 'hostile' US vessel with cruise missiles, while it was separately reported that a US military base in Jordan was hit by a missile attack and that a missile attack hit an Iranian Kurdish opposition group site east of Iraq's Erbil.
  • UKMTO received a report that a tanker was hit by an unknown projectile 40NM northeast of Qalhat, Oman. UKMTO reports of an incident 13NM southeast of Lima, Oman, the tanker was reportedly hit by a missile transiting outbound on the southern route
  • The UAE Defence Ministry reported that two national tankers were targeted by Iranian cruise missiles in the southern Strait of Hormuz, with the incident occurring in Omani territorial waters, although the fires on both tankers were brought under control, and it reserved the right to respond to the escalation.
  • ADNOC confirmed tankers "Al Bahyah" and "Mombasa B" were hit in the Strait of Hormuz.
  • Oman’s Foreign Minister said complex talks are under way to make a long-term arrangement to guarantee freedom of navigation through the Strait of Hormuz.
Tyler Durden Tue, 07/14/2026 - 15:15

De-Banked: It's Only A Matter Of Time Before It Happens To You

Zero Hedge -

De-Banked: It's Only A Matter Of Time Before It Happens To You

Via InternationalMan.com,

"We are writing to inform you that we cannot continue serving you.

As a result of this decision, your account will be closed within 14 days from the date of this letter.

Any remaining account balances will be sent by check to the address we have on file."

Sooner or later, expect your bank to send you a letter like this.

They won't even tell you why they are closing your account, and you will probably have trouble opening accounts at other banks.

De-banking is a disturbing and growing trend.

In short, the ruling elite - parasites, more accurately - have weaponized the banking system to enforce conformity to their preferred narrative.

If you don't lap up their lies about Covid, climate, elections, wars, rising crime, or whatever the media is hyping as the "current thing," expect the financial hammer to come down on you without warning.

You could lose your ability to take payment from your customers and pay your bills at the drop of a hat.

We've seen banks close the accounts of prominent doctors critical of the Covid mass hysteria and politicians opposed to schemes to centralize power on a global level (globalism).

However, for every example of a bank closing a high-profile person's account, hundreds - or thousands - of other ordinary people likely receive the same despicable treatment but are never heard from.

Every day people are losing their ability to interact in the economy because the elite have determined they committed a thought crime.

Interestingly, the banks never canceled the accounts of the warmongers who spread the lies about WMD in Iraq or the liars that led to the toppling of the Ghadafi government in Libya and the liars that fueled the Syrian conflict.

All of their bank accounts are in good standing, even though they contributed to the unnecessary deaths of countless innocents.

Nor did the banks close the accounts of those who, for years, peddled the Russiagate lies that tore the country apart or those who claimed the Hunter Biden laptop story was phony when it was, in fact, real and probably affected the outcome of an election.

All of their bank accounts are in good standing too.

The banks also did not close Jeffrey Epstein's accounts, even though they were likely aware of what he was up to.

These are just a few examples of the blatant double standard.

If you are skeptical about whether men can get pregnant or if cow farts will destroy the planet, you should expect very different treatment than Jeffrey Epstein or people whose lies align with the military-industrial complex.

De-banking is another example of how formerly free societies are rapidly descending into high-tech totalitarianism.

It's only prudent to expect de-banking to worsen as governments fall deeper into bankruptcy and become more desperate to maintain control. Controlling the narrative - partly by de-banking anyone with opposing views - is crucial for them to try to hold on to their power.

Today you can be de-banked for having the wrong opinion. Tomorrow you could be de-banked for even more trivial reasons.

For example, even if you loyally follow whatever the TV tells you to think, the banks may notice you are purchasing "too much" meat or gas and are therefore exceeding your monthly carbon allowance. In the name of saving the planet and maintaining their ESG scores, they'll close your account.

Think that's far-fetched?

Consider that already, today, Bank of America shares all gun purchases from its clients with the FBI. It would be naive to assume they and other banks don't automatically share additional data.

Or that PayPal recently floated the idea of charging people $2,500 for promoting so-called "misinformation" - a vague propaganda term that really means "information the people in charge don't want you to know because they're afraid you will come to a conclusion they don't like."

It's not hard to see where the de-banking train is going.

We're only a few stops away from a full-blown social credit system.

There Is No Free Market in Money and Banking

Money is simply supposed to be something useful for storing and exchanging value.

Banks are simply supposed to be money warehouses.

However, that is not how it works today.

Governments have perverted money and banking into tools to control the population.

An unconvincing argument you may hear is that banks are private companies exercising discretion on their clients. They are within their right to de-bank whoever they want.

They say it is no different from a baker having the right to refuse to bake a cake for someone they don't like.

You could make that argument if only there was a totally free market in money and banking... but there isn't. Not even close.

Here's a more accurate analogy.

Imagine a situation where the only bread available on the market is government bread, and the only way you could obtain such bread is through government-approved bakeries. Independent bakeries would not exist.

The government could then exert overt and subtle pressure on the bakeries to ensure they aligned with their preferred narrative by removing their permission to operate or threatening to. They could also impose fines, start invasive investigations, or add more regulations.

There would be no shortage of ways a bureaucrat could find to make things unpleasant for the bakeries.

The bakeries' owners know such a dynamic exists, so they enthusiastically fall in line with the "current thing" to avoid problems.

Then, suppose it became known to the bakery that one of their customers had committed a thought crime. They wouldn't hesitate to throw him to the curb, even if he had been a loyal customer for many years. It simply wouldn't be worth the potential problems. Word would spread to other bakeries that he was trouble, and they'd avoid his business too.

Since the only bread on the market is government bread, which is only available from government-licensed bakeries, he would be unable to obtain bread.

A similar situation exists today in money and banking.

In Marx's Communist Manifesto, the 5th plank calls for the "centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly."

That perfectly describes fiat currency and the Federal Reserve, which oversees the banking system.

The free market wouldn't choose easy-to-produce government confetti as money without laws forcing their use.

Here's another way to think of it.

Imagine if Tony Soprano forced his neighborhood to use pieces of paper with his signature as money and threatened violence against anyone who disobeyed. That's what governments are doing with their currencies today.

It's a far cry from when people used gold - a politically neutral, hard-to-produce asset voluntarily chosen on the market - as money.

That's why the notion of a free market in money is laughable.

We don't have free market money; we have communist money forced upon us with violence and threats of violence. Further, for most practical purposes, the banking system is needed to use this lousy "money."

Similarly, modern banks are not creatures of the free market like the independent money warehouses of the past. Today banks exist at the pleasure and service of the state - and obtain special privileges as a result.

Perhaps the most obvious observation is that there would be zero government bailouts in a free market and certainly no such thing as "too big to fail" banks. Incidentally, it's no coincidence that the most egregious de-bankers are the "too big to fail" banks.

Further, modern banks resemble government-sanctioned Ponzi Schemes, as they rely on the false belief that depositors' (fake) money is readily available when, in fact, it isn't because of fractional reserve banking. If only a tiny portion of depositors demanded their money back, most banks would be in big trouble.

Governments allow banks to commit this fraud that would be illegal in any other industry.

For example, imagine a fractional reserve car dealership or jewelry store where the car salesman and jewelry store owner could create 10x more claims for cars and pieces of jewelry than what actually exists in their inventories. They would be selling claims for goods that don't exist.

Not only would such a practice be fraudulent, but it would also not be sustainable.

If even a few people who purchased fractional reserve claims on the nonexistent cars and jewelry asked for delivery, it would blow the whole scam up.

The government and the banks understand this dangerous dynamic, which is one reason they created the so-called "lender of last resort," the Federal Reserve. When the banks get in trouble, the Fed can create new currency units out of thin air to bail them out.

Let me translate it into plain English.

A "lender of last resort" means legalized counterfeiting of the currency to backstop a legalized Ponzi Scheme.

Such blatant fraud would have no place in a free market for money and banking. However, because it is institutionalized and has the government's blessing, most people thoughtlessly accept the situation as normal.

In a truly free market for money, people would voluntarily choose whatever was most suitable for storing and exchanging value. Historically, that meant gold because it was the one physical commodity that was hardest to produce and most resistant to debasement. Tomorrow it might be Bitcoin.

In a truly free market, banks would cease to be government-sanctioned Ponzi Schemes and revert to their historical role as independent money warehouses. Further, anyone could enter the banking business in a free market; you wouldn't need the approval of the Federal Reserve cartel, as banks do today.

That's why the argument that de-banking is simply private companies rightfully exercising discretion is disingenuous.

The Solution

The ideal solution is to get the government entirely out of banking and money and have a totally free market. But that's probably not going to happen anytime soon.

So what can you do about de-banking?

First, don't expect to use physical cash as a solution for long.

The elites have long had nefarious plans to eliminate cash. Today they're

Tyler Durden Tue, 07/14/2026 - 15:05

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