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The Ice-Nine Plan

Sunday, November 13, 2016 8:02
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The main metaphor I use in my newest book The Road to Ruin:
The Global Elites’ Secret Plan for the Next Financial Crisis

( target="_blank">claim your free copy here) is something
called “Ice-9.”

Ice-9 may be familiar to some listeners and readers, maybe not
to others, but this is something I borrowed from the novelist Kurt
Vonnegut.

He wrote a short novel in the early 1960s called Cat’s
Cradle
. Some readers may be familiar with it. If not, I
recommend a copy. It’s short and hilarious.

My book, on the other hand, is not funny at all. I discuss the
end of the financial system and the very real possibility of people
losing all their savings. Hopefully, it’s engaging, entertaining
and readable, but I can’t honestly say it’s funny. But Kurt
Vonnegut’s is, even though he talks about a doomsday machine.

It involves a variation of a water molecule a scientist
invented. It was different, a variation of water different in one
respect: It melted at 114 degrees Fahrenheit, and it was frozen at
room temperature. If one molecule of this unusual water came in
contact with a regular molecule of water, the regular molecule
would turn to ice-9. This happened over and over again, in
geometric progression.

Ice-9 was kept in a vial. But if the vial was opened and one
molecule was poured into normal water, all that water would freeze.
Then it would spread, and would sweep through the lakes and the
rivers and the oceans. And all the water in the world would
ultimately freeze.

Of course, everyone on the Planet Earth would die. It was a
doomsday machine, a metaphor for nuclear annihilation. This book
came out right around the time of the Cuban Missile Crisis, so it
was quite topical.

In my book, I take that metaphor of ice-9 and apply it to the
financial system. The point I make is that one part of the
financial system cannot be shut down in isolation. A contagion
beginning in one part spreads to the entire system. That’s because
the minute one part shuts down, everybody runs for a different part
in a quest to get their money back.

It speaks to the best description I’ve ever heard of a financial
panic: everybody wants their money back at once.

The process soon grows out of control. Everyone sells stocks,
sells bonds, sells real estate, sells everything. They all want
their money back at once. Of course, people think they can get
their money back. But they can’t. They’ll discover that what they
actually have are stocks, bonds, and real estate, and money
markets, so called, and they can’t get their money back.

Imagine the money market funds are shut down. No one can get
their money out of them. Then everyone runs to the banks to get
their money. But the banks are closed. Then, everyone tries to sell
their stocks, but the stock market’s shut down. And so on. In other
words, the minute one part of the system shuts, all of the demand
for liquidity moves to another part. But it dries up. And that part
of the system has to be shut that down, too. Soon the entire system
is shut down because it’s all so deeply interconnected. That’s
where the ice-9 metaphor comes in because it’s not just one water
molecule turning to ice. All the water in the world turns to ice
because it’s all connected.

(I describe all the critical details in The Road to Ruin.
target="_blank">Go here now to get your copy for free,
instead of paying the full $23).

Again, you might want to pick up “Cat’s Cradle,” before “The
Road to Ruin” comes out. It’s a great novel. You’ll find it
amusing, and I think it’ll make my metaphor a little more clear.
Regardless, the serious point is that pressure just moves from one
part of the system to another. You can’t just shut down one part.
You have to shut down the entire system. And that’s what could
happen.

For what it’s worth, the safest place to put your money is in
the bank, up to the insured limit. I believe the federal government
will have to honor FDIC insurance, which guarantees money up to
$250,000 per account.

If you have more than that amount, you can divide your money
between two banks. If you’re a lone individual with, say $500,000,
you can put $250,000 in one bank and $250,000. Not in a different
branch of the same bank, but a different bank altogether. Both
accounts will be insured to the full amount. That is what happened
in Cyprus. The government honored its insurance to the stated
amount. But everything over the insured amount was confiscated and
turned into bank equity.

I explain this process in my book. It’s called a bail-in. A
bail-in is different than a bailout. A bailout is when the
government uses the printing press and taxpayer money to save a
financial institution. All the people who have transactions with
this financial institution, whether it’s depositors, bondholders,
etc., are preserved. They all keep their money. A bail-in is
different…

In a bail-in, the government says, “No, we’re not going to help
you. We’re not going to use government money. We’re not going to
use central bank money. We’re going to take the money that’s in the
bank and convert it to equity in the bad bank, where if you’re a
bondholder, you’re not going to get 100 cents on the dollar. You’re
going to get 80 cents on the dollar, etc., etc.”

They’ll use the money already in the bank, whether it’s
depositors, bondholders, or equity holders, and use that money to
repair the balance sheet.

That is what’s going to happen with Deutsche Bank and with the
Italian banks that are in trouble. It’ll also happen with any other
banks that fail in the United States. As I said, you’d probably be
insured up to the guaranteed amount, although the government could
close the banks for several days.

That’s why I recommend you keep some cash in a safe place
outside the banking system. I’m talking paper money now. Having
some cash is like having a battery and flashlights. I live in a
place that occasionally gets hurricanes and nasty storms, so the
power goes out on occasion. You want to keep some flashlight
batteries around. And that means cash.

Remember, when the power’s out, nothing works. The ATMs don’t
work. The gas stations don’t work, etc. It’s good to have some what
we used to call in Philadelphia “walking around money.” But you
can’t withdraw too much from your bank because the government won’t
let you.

Try withdrawing $20,000 in cash from your bank and you’ll be
reported to the government on a currency transaction report. That
report will be put in a file right next to Al-Qaeda and the drug
cartels, with the Financial Crimes Enforcement Network. That’s not
a lot of fun.

The point is, you might think you can get your cash, but you
can’t. When you go down to the bank and actually try to, you’ll be
treated like a criminal. This is of course part of the war on cash.
And it’s dangerous. The American people are being led like sheep to
the slaughter. They’re being herded into digital pens, which are
the banks.

Most people think we have a cash system. But we really don’t.
How much cash do you carry in your purse and wallet? Probably not
that much. You use your debit card. You use autopay. You use your
online banking account. You use your iPhone if you have Apple Pay.
You use your credit card. It’s all digital. You don’t actually have
that much cash, and if you try to get it, you can’t get it.

That’s why I recommend you put some money into physical gold or
silver, in a monster box. A monster box has 500 ounces of American
silver eagles, one ounce each. They cost about $10,000 on the
market. You should find a good dealer that doesn’t charge too much
commission.

But it’ll preserve your wealth. In an emergency situation,
people will take it. Many people will gladly give you some
groceries for a solid ounce of silver because no one trusts any
other money.

I also recommend real estate as part of your portfolio. It’ll
still be there if there’s a storm or a power outage or your bank’s
shut down. These are some of the things I recommend before the next
great crisis strikes. They are in the book, as are many other
important ways to preserve your wealth in the years ahead.

I lay out the ideal “all-weather” portfolio in target="_blank" href="/r2/?url=http://pro1.agorafinancial.com/584959/" target=
"_blank">The Road to Ruin.
It’ll preserve your
wealth in the coming collapse and mitigate an “ice-9” freeze of
your assets.

You don’t have to be helpless when the crisis arrives. You can
see it coming a mile away if you know what to look for, and there
are definitely steps you can take.

Regards,

"http://dailyreckoning.com/author/jrickards/" target="_blank">Jim
Rickards

for "http://dailyreckoning.com/free-e-letters/" target="_blank">The
Daily Reckoning

P.S. "http://pro1.agorafinancial.com/584959/" target="_blank">The
Road to Ruin.
might be my most important work to date.
What will be the “ice-9” molecule that freezes the entire financial
system? And how will global elites react? Most importantly, how can
you protect yourself? "http://pro1.agorafinancial.com/584959/" target="_blank">Click
here now
for all the critical details.

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