Unsurprisingly, Santa brought us yet another Covid Christmas, replete with the usual set of presents: facemasks, quarantines, social distancing, coercive inoculations, vaccine passports, non-stop media fearmongering, and lockdowns. Two years down the line, after billions of injections with multiple and diversified experimental vaccines, the mighty pandemic is still with us. This time, however, it comes with the bonus of soaring inflation, which by devaluing money pushes more and more people into debt and poverty. And to add insult to injury, the ‘experts’ are now warning about “inflation inequality”. As my daughters would say (via Homer Simpson): duh!?

Perhaps, while we wait to hear what we must do to ‘save Easter,’ it is time to take the red pill and face reality: since the start of 2020, a macroeconomic virus disguised as a pandemic virus has taken possession of our lives, causing widespread depression and consigning entire populations to often extreme forms of legalized discrimination.

Monetary Injections and Other Inoculations

The deep function of a ‘health emergency’ legitimised by perpetual programs of mandatory vaccine inoculations can only be grasped if placed in the relevant macro context, namely the terminal crisis of our mode of production. The causal sequence to bear in mind is: economic implosion – pandemic simulation – authoritarian offensive. Should it come to fruition, this paradigm shift would culminate in a totalitarian model of implosive capitalism, perhaps still thinly disguised as democracy but legitimized by the despotic management of global emergencies that are grotesquely disproportionate to any actual threat. As shown by the ‘Covid vaccine’ indoctrination campaigns, with attendant ‘anti-vax’ scapegoating, the totalitarian potential of mass propaganda is virtually limitless. For the first time in history, the blame for a treatment that does not work (at least not in the way we were promised) has been placed on those who do not use it.

Yet we must be mindful that today’s ideological violence comes as a reaction to a looming socioeconomic collapse whose magnitude has never been experienced before. The first shock was the 2007 credit crunch and following global recession. At that time, the bailing out of the financial sector led to the European debt crisis (2010-11), which turned Quantitative Easing (central bank programs of financial asset purchase) into the mother of all monetary policies. Since 2008, regular central bank distortion through QE injections has spawned an ultra-financialised regime of capitalist accumulation contingent on the creation of asset bubbles whose volatility resurfaced in mid-September 2019, with the liquidity trap in the Wall Street repo (repurchase agreement) loan market. This, in turn, cleared the way for Virus and the perverse logic of ‘pandemic capitalism,’ which allowed the top 1% to increase their wealth at record speed, while the middle classes are going missing.

As recently detailed by Pam and Russ Martens, on September 17, 2019 the Federal Reserve started an extraordinary program of repo loans to its so-called ‘primary dealers’ on Wall Street (including JP Morgan, Goldman Sachs, Barclays, BNP Paribas, Nomura, Deutsche Bank, Bank of America, Citibank, etc.) – these were overnight loans as well as 14-day and even longer term loans. On July 2, 2020 (the last date currently available from the Fed’s database) the cumulative value of these loans, whose collateral consisted mostly of US Treasuries and Mortgage-Backed Securities, totalled $11.23 trillion. Because of the fragmented way in which the Fed releases its data, it is impossible to establish exactly which loans are or were outstanding, and by how much. Nevertheless, what matters is their astonishing size, which confirms that Wall Street’s trading houses were on the verge a catastrophic meltdown before the arrival of Virus. Further evidence of the loan market’s persistent fragility came on July 28, 2021, when the Fed announced the creation of a ‘Standing Repo Facility’, consisting of $500 billion backstop credit each week for the Fed’s 24 primary dealers and additional counterparties.

As I argued in a recent piece, the countermoves to an impending meltdown were planned months in advance. Official documents indicate that our financial lords knew all too well that the post-2008 artificial expansion of the money supply was becoming unmanageable, not least because accompanied by a global economic contraction that, in 2019, had pushed Germany, Italy and Japan to the verge of recession, while Britain, China, and other economies were spluttering ominously. It is therefore reasonable to surmise that, rather than risk a sudden and catastrophic collapse, the elites opted to control the accident while, as it were, calling the ambulance in advance. As we have seen, when the Wall Street repo market froze up in mid-September 2019, the Fed swiftly prescribed a higher dose of the same medicine, that is to say an unprecedented expansion of monetary stimulus in repo loans. But this time, crucially, under protection of the pandemic shied. If we fast forward to January 2022, the same logic applies: the ‘Covid emergency’ continues to work like a huge Linus blanket for a global economy that is sinking under mountains of unsustainable deficits and unserviceable debts.

It is important to be clear about the magnitude of the monetary expansion under consideration. In August 2019, a white paper issued by BlackRock (the all-powerful investment fund already known as the “fourth branch of government”) had shown the Federal Reserve the way out of the coming “dramatic downturn,” urging the US Central Bank to implement an “unprecedented” monetary policy whereby large masses of money created out of thin air were to be delivered “directly into the hands of public and private spenders.” This “going direct” scheme, which according to BlackRock had to be made “permanent,” was promptly inaugurated a month later in response to the repo market crisis. Since then, and especially after the arrival of Virus, the Fed’s balance sheet has grown by nearly 5 trillion dollars, an absolutely extraordinary expansion even when compared with the QE bailouts started at the end of 2008. And to get an idea of the global dimension of this expansion, we need to add the trillions created by other central banks around the world, as well as programs of fiscal stimulus such as ‘helicopter money.’

As explained by John Titus, what matters is not merely the quantitative but especially the qualitative character of the Fed’s monetary manoeuvre. In the entire history of the Fed (founded in 1913), there had never been a direct correlation between central bank reserve creation and monetary supply in the retail banking circuit. However, since September 2019 the new reserves created by the Fed started being replicated dollar for dollar as deposits within the existing 4,336 US commercial banks. In other words, the expansion of the Fed’s balance sheet came to correspond directly with the overall money supply in the economy: exactly the monetary medicine ordered by BlackRock, which became a matter of force majeure a few months later thanks to a ‘global health emergency’ that still continues to work like a life insurance policy for the financial markets. Ultimately, the extent to which the “going direct” strategy and the massive program of roll-over repo loans overlap is of little importance. What needs to be emphasised is that the financial house of cards was on the verge of collapse already in 2019, and that Virus arrived at the right time to enable and justify the monetary deluge with related paradigm change.

Regardless of which pill we decide to take, there are three immediate and irreversible social consequences to this process of monetary centralization orchestrated by the world’s most powerful central bank in collusion with the world’s most powerful asset manager: 1) inflation, 2) further debt, and 3) a totalitarian model of emergency-driven capitalism.

Wall Street Virologists

What does our macroeconomic environment look like? Its basic features are summarised below:

– Global debt of $300 trillion, growing exponentially

– Rapidly increasing deficits in most advanced and developing economies

– Colossal bubbles in the stock, bond (debt), and real estate markets

– Astronomical bubble in the derivatives market

– Surging inflation with potential for hyperinflation.

Within this explosive context, Virus and variants work as cynical cover stories whose aim is to expedite the authoritarian management of the implosive trajectory of contemporary capitalism, which cannot be contained through economic policy alone. The unrelenting manufacturing of ‘pandemic emergency’ is both a defensive strategy against collapse, and an aggressive attack on what is left of the ‘work society,’ for it allows the elites to use inflation as a means to impoverishment and domination.

It seems to me that the overarching objective is the controlled demolition of the productive economy and its liberal-democratic infrastructure, which among other things allows more capital to be siphoned off from the real economy and channelled into the financial markets. While the speculative sector is consecrated as the absolute centre of value production (with new record highs for the S&P 500, Nasdaq, and Dow Jones indices at the end of 2021) the work-based society winds up indebted and immiserated. The disproportion between the financial sector’s euphoria and the freefall of the real economy suggests that steering the course of depression through a grotesquely overblown ‘health crisis’ is much more convenient, for the elites, than having to account for a socioeconomic downfall of biblical proportions.

In short, the global dominance of Virus over the last two years is telling us that capitalism is ready to do “whatever it takes” (as Mario Draghi put it back in 2012) to postpone its redde rationem. It is therefore delusional to think that governments, health authorities, and the media act independently. Rather, what speaks through them is always economic-financial Power, the very Thing that they want us to believe only exists for conspiracy theorists; as if it had suddenly died out like the dinosaurs, or mutated into philanthropy.

If we want to know how ‘killer variants’ are born, we should ask the markets. The best virologists operate on Wall Street. They are those traders who, a month prior to the appearance of Omicron already knew that the Covid horror-show would be broadcast again, given the pricing of stocks in the so-called Stay-at-Home basket. Even more blatantly than its predecessors, Omicron has nothing pandemic about it. In fact, as claimed by Geert Vanden Bossche, by working as a “live attenuated vaccine” it most probably constitutes a “unique opportunity to start building herd immunity” – a natural opportunity that is likely to be frustrated by yet another mass-vaccination campaign. Whatever the case, the grotesque discrepancy between the variant’s impact and the repressive measures taken on its behalf can only be explained in economic terms: Omicron is yet another instrument of financial leverage.

By this I mean that its immediate role is to control the inflationary spike in the short term, since the renewed fear campaigns sap spending and consumption, preventing the huge money supply pumped into the financial sector from circulating as real demand in the economy. This allows central banks to continue to pursue the by now metaphysical goal of money printing through their proverbial bazookas, whose purpose is to sustain financial markets packed with toxic assets (from MBS to complex derivatives), zombie companies, and monstrous holdings of public debt. Differently stated, central banks flood the financial system with digital money in order to ward off substantial interest rate hikes. This is because the mere thought of seriously raising rates would set off various time bombs in these markets, where everything revolves around the availability of cheap cash.

In conditions of minimally functional capitalism, inflation is fought precisely by raising the cost of money. But in a fragile and hyper-indebted context this cannot happen, because markets kept in a perpetual excitement by easy money would suffer devastating consequences. An increase in interest rates would trigger chain reactions within a global system driven more by leveraged speculation than by GDP. On the one hand, then, the money printer must remain turned on to inflate the financial markets; on the other hand, the resulting price inflation in the real world must be ‘managed with care’ to avoid social chaos.

Let us recap: Omicron-type variants are, in essence, deflationary measures designed to perpetuate central banks’ loose monetary policies and prevent interest rate hikes, which would nuke the balance sheets of most financial firms while also compromising public debts and their financing. Government debt and speculative money capital are, of course, closely intertwined. A dramatic devaluation of the financial superstructure would undermine the state’s ability to finance its operations. This is particularly self-evident with countries like Italy and Greece, who have promptly adopted the most draconian measures with respect to Omicron in order to plead for further monetary support: from the extension of state aid and PEPP (the ECB’s Pandemic Emergency Purchase Programme), to the revision of the European Stability and Growth Pact.

But since there are no free meals in capitalism, this insane flight forward of debt necessarily means more poverty and regimentation for (almost) everyone, with the middle classes indebting themselves to their teeth in a desperate bid to retain their status. It is in this sense that variants are deployed to manage an epochal shift to what looks increasingly like a neo-feudal type of senescent capitalism ruled by monetary seigniorage, whose longevity may well exceed any optimistic expectation for radical transformation.

Inflation: Private Vices and Public Virtues

I have argued that the latest episode in the Covid saga originates in a concerted attempt to contain inflation, which is now so real that even Chairman Powell, Head of the Fed, was recently forced to deny his own mythological narrative of its transitory character. In the US, inflation is now up 6.8% on an annual basis, the highest since 1982. And if we add house prices, we easily go into double digits. The solution? At present, a deflationary variant (also deployed, of course, as a weapon of mass distraction) with the addition of cheap wizardries like calculating CPI (consumer price inflation) on data from 2019-2020, so as to keep it down artificially.

The current surge in inflation is at record high not only in the US, but also in Great Britain (+5.1% in November), and is the fastest in the history of the Euro. The latter is causing headaches to ECB boss Christine Lagarde, who in mid-December decided against rate hikes while interrupting PEPP (with a pledge to reinstate if the ‘pandemic’ should continue to bite) only to ramp up traditional QE. Essentially, yet another case of plus ça change, plus c’est la même chose. Insofar as central banks are snookered regarding monetary policy, the controlled management of inflation would seem to be an essential driver of the pandemic narrative, as it is functional to the gradual weakening and takeover of the real economy. Currency depreciation appears to be a feature, not a bug, of central banking. Remember the World Economic Forum’s slogan? You will own nothing, and you will be happy! In short, it is not happening by accident but by design.

In other words, inflation is useful to manage the authoritarian transition toward a two-tier global society where very few hold control of the monetary supply while most are subjugated through poverty, control, and fear. This is, in a nutshell, the criminal trajectory of contemporary capitalism. And inflation is also handy against public debt, since the mass of inflationary liquidity thrown into the markets suppresses both interest rates and bond yields. Should the Fed’s taper become reality, bonds could quickly rise. However, let us repeat the key point: a meaningful taper would be catastrophic for almost all asset classes, and therefore would be short lived. Which is why today we are sold a fake taper, as the Fed’s balance sheet has in fact increased since Jerome Powell announced pulling back on pandemic aid in November 2021. This shows that the only viable way forward for the elites involves pretending to fight inflation in public while continuing to feed it in private.

After two years of relentless assaults on our intelligence, even the most faithful champions of the official narrative should find the courage to admit it: COVID-19 is the name of the coordinated response to an increasingly unmanageable systemic implosion. The surreal prolongation of the pandemic tells us that entire societies are hostage to the reproduction of fictitious value in the financial sector, where, it seems, the sky is the limit. But the cost of perpetually bullish markets are endless variants, quarterly vaccination programmes, wave after wave of media terror, and a whole panoply of Kafkaesque emergency regulations aimed at 1) keeping the money printer running while depressing the real economy; 2) getting us used to subjugation vis-à-vis alleged force majeure; and 3) distracting us from what takes place in the financial Olympus, where the real game that decides our destinies is played out.

Like all wars, the ‘war on Covid’ justifies money printing and low rates, which in turn causes inflation. But this logic, today, can only resolve itself in the centralization of the monetary flow. In capitalist terms, there is no other way out. This is because today’s inflationary pressure, which means money devaluation and erosion of purchasing power, is not a simple consequence of supply chain crisis, as we have been told. Rather, it is the inevitable result of the over-supply of fictitious money, which is now coming down on the ground with the destructive force of an avalanche.

But aside from their deflationary function, variants also play an ideologically aggressive role: they create the ideal humus for further social tightening. If everything goes as planned, most of humanity might soon be reduced to monetary slavery, which our benefactors will introduce as the only solution to a Great Devaluation that they will no longer be able to camouflage. That is why they must train us to live in fear, forcing us to internalize the new normality as a condition of total precariousness, mass anxiety, and chaos. In the current phase, there must be no discussion of economic causes.

Managing the Unmanageable

Let us be clear on the big picture: the economy will never be able to return to the growth levels necessary for social reproduction – unless this reproduction is reduced to minimum terms through the controlled dismantling of the work society. For years now we have nourished a false economy rooted in government spending backed by central bank’s asset purchasing and low interest rates. This has nothing to do with real growth. We should therefore forget the past: the belle époque of social-democratic capitalism is definitely over. In a liberal context, there can no longer be sufficient real growth for the capitalist reproduction of our world. This is due to an immanent and objective reason, which becomes clear only if we look at the historical evolution of our mode of production: since the 1970s, value-productive work has been gradually crushed by capital itself through its holy alliance with science and technology, dictated by competition – a self-inflicted impairment that the functionaries of ‘emergency capitalism’ doggedly refuse to confront.

Because of what Keynes had already termed the era of ‘technological unemployment,’ (which includes underemployment and all types of wage dumping) capital with increasingly higher organic composition is unable to squeeze sufficient surplus-value (both relative and absolute) out of wage labour, which is why it throws itself headlong into the magical world of finance, where money itself is put to work. As is well known, Marx had anticipated this condition with his theory of the ‘tendency of the rate of profit to fall,’ set out in the third volume of Capital. However, he could not foresee the implosive effects of the exponential increase in automation, which today manifest themselves in the pathological addiction of economies, states and therefore entire societies to mountains of fictitious money destined to ruinous devaluation. Financial collapse is likely to happen as a meltdown of the debt market (the driver of the entire system), which would cause an uncontrollable spike in interest rates as well as the evaporation of the dollar and other fiat currencies around the world.

For the time being, this outcome is postponed by authoritarian means. As we have seen, the acceleration in monetary control since September 2019 was enabled by the freezing of the real economy through pandemic simulation. By hypnotising the masses with relentless doses of Virus-phobia, and by putting them under house arrest while waiting for the miracle serum (which, as easily predictable, turned out to be miraculous mainly for Big Pharma), our political rulers, directed by the financial elites, allowed central banks to replenish the financial sector while managing the inflationary monster.

After the failures of neo-Keynesian (public spending) and neo-liberal (austerity and market deregulation) policies, we have now reached the phase of ‘pandemic capitalism,’ soon to be followed by other tyrannical attempts to manage the unmanageable. In capitalist terms, financial arrogance is the inevitable consequence of capital’s ever-increasing inability to create new surplus value – a symptom of such traumatic consequence that we do anything to avoid facing it. But the prolongation of the state of emergency will not save us from the crash, which will probably hit us as an accident controlled from above. The elites know that a sudden hyperinflationary overheating of the economy would lead to uncontainable waves of social unrest. But they also know that they can seek to manage the economic downturn through emergency narratives and the gradual enslavement of the terrified multitudes.

We should therefore prepare ourselves. For instance, by building autonomous networks and communities that are not dependent on a disintegrating – and for this reason increasingly violent – model of social reproduction. Politics, as we see it every day, is now completely subjugated to the economic dogma, and therefore deprived of any emancipatory drive. The political left has opted to take the blue pill, and, as summarized by Franco Berardi (Bifo), it can only offer false perspectives: “There is no political way out of the apocalypse. For thirty years the left has been the main political instrument of the ultra-capitalist offensive, and whoever invests their hopes in the left is an imbecile who deserves to be betrayed, since betraying is the only activity that the left is capable of performing competently.”

If we want to protect what remains of our critical independence and human dignity, and especially the hope in a better future for our children, we must free ourselves, at least mentally, from this shackling subjection to a pseudo-pandemic supported by a corporate-owned type of scientism that has now risen to global religion. This is the first and fundamental step toward emancipation from the current deadlock. At the same time, we must rehabilitate a political critique of capitalism intended as a Weltanschauung, that is to say a worldview embodied in the dialectical relationship between money and work aimed at the creation of surplus-value, commodities, and profit. Like it or not, in the age of accelerated technological automation this world is a dead man walking, which can only keep itself alive by turning totalitarian. If we want to avoid the coming tsunami of social barbarism we will need, at some point soon, to redefine the relationship between work, community and social wealth beyond its capitalist meaning. To do this we will need to take a third pill, which however will only become available after we organise meaningful popular resistance against socioeconomic tyranny legitimised by ‘emergency capitalism.’