The slow-motion theft impoverishing us all
Key Markets report for Friday, 23 January 2026
Some ten years ago, while I was still sitting at a hedge funds office, collapse of the banking system was perceived as inevitable and imminent. I recall that Deutsche Bank, in particular, was on the death watch since about 2015 and many other European banks were suspected to be on the verge of collapse, among them Santander, Intesa San Paolo, Societe Generale, RBS, etc.
A new “Lehman Brothers” moment was expected at any moment and the September 2019 Repo crisis was proof positive that one or several among the global too-big-to-fail banks were broken. Around that time, one of the leading European banking analysts, Tuomas Malinen was predicting that the Lehman moment was only weeks away. Alasdair Macleod, another eminent financial analyst stated in October 2020 that, “The likelihood of Eurozone banking collapse is now a virtual certainty and could transpire at any moment…”
But nothing happened. Then the pandemic was declared in March 2020 and things went from bad to much, much worse. Still nothing... Today, more than five years after the pandemic, the 2019 Repogeddon, the 2020 pandemic, and all the predictions of an imminent financial collapse, we still haven’t had a financial crisis. The question is why? And why did all those learned bankers and banking analysts think a crisis was imminent well before 2019?
Bankers’ coup
I hade a bit of an “Eureka” moment back in 2021 and at the time I wrote in this report that,
“It finally dawned on me: there would be no banking crisis; there must have been a stealth banking coup behind the scenes and what we thought was a free enterprise system in the west was turned into a soviet-style centrally planned economy run by the central banking franchise.”
Malinen, Macleod and others weren’t wrong in their analysis. Their mistake was in the assumption that we were operating in a free market system in which failing entities eventually go bankrupt. But where the banking oligarchy effectively takes control of governments, they can procure themselves a permanent bailout conveyor belt, extracting wealth (purchasing power) from the economy at large, and awarding it to themselves to backstop their clients’ bad loans and in this way avert the collapse of their institutions.
This was the system we had in the “communist world,” which is why we had so very few banking crises even during the 1980s when the communist bloc economies were in the process of accelerating disintegration. There were no bank runs because the state simply printed up all the money that was needed to keep the banks liquid and we didn’t even need to have any debate about it. We didn’t have big words for it, like Quantitative Easing, but we knew that the system was broken and that the government was “printing” money to keep it from collapsing.
But if you conjure up more and more purchasing power out of thin air and flood it into the system, the inevitable effect of this will be a rising inflation. More precisely, government or central bank’s monetary inflation inevitably leads to price inflation. Of course, this was what we got. I remember those times vividly: even as a child, I could tell that the prices of everything were going up. It was our “normal,” that was just how things were. But by the time I was a teenager in the mid-1980s, inflation turned into a hyperinflation.
Now our central bank was printing new banknotes and adding zeros to them. We all became millionaires, but it was getting harder and harder to make ends meet, everyone’s standard of living declined, and most people lost all their savings. That’s what happens with high inflations.
In effect, we all ate up bankers’ losses
What happened, in effect, was that as the monetary system was beginning to implode, rather than letting the markets operate and allow the failing companies to go bankrupt, the banking authorities decided to keep those companies afloat by showering them with new credits with which to pay off their old credits. Failure of large companies couldn’t be allowed because they were the bankers’ most important customers. If they failed, the banks would have failed with them.
Instead of letting the failing systems fail, the bankers decided to print up money with which to keep them alive. Effectively, they stole purchasing power from the economy at large and did so at massive scale, to the point that they impoverished nearly everyone else. In this sense, monetary inflation in excess of economic growth is theft, pure and simple.
We’re doing it all over again
These lessons from high- and hyper-inflationary episodes from the past should serve as warning for us today because we are now living through the same process. The fact that we haven’t had bank runs (with a handful of exceptions), and that central banks in the West are now participating in Repo markets once more, indicates that the bankers are again plundering their host nations’ economies in order to transfer their own losses onto the ordinary people and businesses.
Inevitably, we’ll feel the effects of that theft - not by seeing it in our bank accounts but by noticing that our money buys less and less real stuff. Once the bankers take control of the system and no longer have to ask the lawmakers for bailouts, the process will tend to gradually accelerate until inflation turns into hyperinflation and money turns worthless. This is not an accident of nature; it is not the result of our leaders’ incompetence either. It is high-level, premeditated theft. And by virtue of forcing us to use "legal tender" money to the exclusion of alternative currencies, the bankers made us all their captives.
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Today’s trading signals
With yesterday’s closing prices we have the following changes for the Key Markets portfolio:
