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Totalitarianism is a form of government or political system that prohibits all opposition and exercises an extremely high degree of control over public and private life. It is regarded as the most extreme and complete form of authoritarianism. In totalitarian states, political power is often held by autocrats and bureaucrats (both essentially dictators) who use propaganda broadcast by state-controlled mass media.

Other features are censorship, mass surveillance, limited freedom of movement (most notably freedom to leave the country), widespread use of state terrorism, the use of detention, repressive police and fraudulent elections.



In 1970, Yuri Bezmenov, a Soviet spy, defected from the USSR to the United States. He was interviewed in 1984 — over 35 years ago — and that interview is worth watching today. His comments were very sophisticated and are focussed on the Soviet Union KGB ‘s psychological warfare against the West during the Cold War decades of the 1960’s, 1970’s and 1980’s.  By the way, Russia today is not the USSR. The Soviet Empire is long gone — it collapsed in 1989. Other Protagonists have since taken on the task of destroying the West.

The concepts Bezmenov talks about are very well known in the intelligence world.  Brainwashing is now a very sophisticated art but most people in the West are unaware that it exists. From Wikipedia: Brainwashing (also known as mind control, menticide, coercive persuasion, thought control, thought reform, and re-education) is the concept that the human mind can be altered or controlled by certain psychological techniques. Brainwashing is said to reduce its subjects’ ability to think critically or independently, to allow the introduction of new, unwanted thoughts and ideas into their minds, as well as to change their attitudes, values and beliefs.

BOOM holds the opinion that the vast majority of the people in the advanced Western economies have had their brains disabled for some years now and particularly over the last 10 – 20 years. They are unable to think critically.  They struggle with facts — almost all of which confuse them. They seek assembled narratives instead — story lines. A story line is the plot of a drama. They cannot understand even a basic graph. If asked to analyse one, they struggle. All age groups are affected and all levels of intelligence and educational status. The ability to remember has been damaged. It is as if our societies have no collective memory. Our societies have become dumbed down to a remarkable degree. There is still an elite of Critical Thinkers who can assemble their own narratives from facts but they are perhaps just 2 % of the total.

Here is a summary of what Yuri Bezmenov said in the interview 35 years ago — it is chilling.

He said in regard to America —

“The Americans need to unplug the bananas from their ears.”

The USSR has attempted to change their perception of reality to such an extent that despite the abundance of information, no one is able to come to sensible conclusions in the interests of defending themselves, their families, their community and their nation”

It’s a great brainwashing  process that goes very slow. There are 4 basic stages — The first one is de-moralization which takes from 15 – 20 years. This is the minimum number of years that it takes to educate one generation of students. You expose them to Marxist/Socialist ideology.  If you pump this into three generations of students, they will become progressively demoralized. It is important to deliver this with no challenges from alternative ideologies. Eventually, these people will then rise to hold positions of power in the economy and in governmental systems. Then you are stuck with them. You cannot get rid of them. They are programmed to think and respond in a certain pattern. You cannot change their mind. Even if you give them abundant authentic information (facts), you cannot change their basic perception and logic of behavior.

In other words, the process of demoralization is complete and irreversible.  To get rid of these people, you have to raise another whole generation of young people with common sense. That takes a long time.

When the brainwashed realize that the great socialist world they have created does not deliver a happy state, they will revolt.  But there will be no place for dissent in future societies built upon Marxist/Leninist principles.  In future, dissenters will simply be squashed like cockroaches.  Their noble ideas of equality will not protect them.

America is already suffering from de-moralization. The brainwashing has been a huge success. It has been done by Americans to Americans.


A person who has been de-moralized is unable to assess true information. Facts tell him nothing. Even if you shower him with genuine information, with documents, he cannot comprehend.

If you start right now to educate a new generation properly, it will take 15 – 20 years to have an effect, to change the perception of reality back to normal. America is stuck with de-moralization.

The next stage is de-stabilization. It takes from 2 – 5 years to destabilize a nation. What matters here is the economy, foreign relations and defense.

The next stage is the crisis. It takes about 6 weeks to bring a nation that is demoralized and destabilized to a full crisis. Then a violent change of structure, power and economy occurs and normalization comes after that. The crisis will happen after you have promised people lots of goodies and promises of paradise on Earth. This will de-stabilize free market competition in the economy and will result in a Big Brother government in Washington DC with benevolent dictators who will promise lots of things. The promises may never be delivered. They will give the impression that the situation is totally in control. But, in fact, it will be totally out of control. They will think they are living in a peace time. In fact, they will be in a state of total war.

The time bomb is ticking, every second, unless the Americans wake up. And, by the way,when this all happens, you will have no country to flee to. There will be no escape.

Americans need to be educated in real patriotism, they must understand the dangers of socialism and communism – Big Brother Government. If not, you can kiss Goodbye to Freedom. All that Freedom will vanish in 5 seconds.

The citizens must FORCE their government to stop aiding socialism and communism. Educate yourselves, understand what’s happening around you. You are in a time of war. You have precious little time to save yourselves. The endless desire for profit from the capitalists will assist in all of this. They will sell the rope with which they will be hung.”

Interview with Yuri Bezmenov 1984 — a Soviet USSR Spy.



BOOM wrote this in the Editorial on 5th July last year —  just 11 short months ago. Let’s go back into the past and compare it to the present.

Can central banks buy everything? They can certainly try. There is nothing to stop them except difficult-to-control CPI inflation and/or currency collapse. Neither of those possible consequences have occurred in Japan over the last 25 years while their central bank, the Bank of Japan, has continued buying more and more assets. In fact, the Japanese Yen has tended to be too strong rather than too weak. And CPI inflation has certainly not been a problem there, quite the opposite.


In the US, the central bank is called The Federal Reserve. The assets available for the Federal Reserve to purchase most easily are securitized assets which can be purchased with the click of a mouse. This includes the $ 40 Trillion of bonds on issue and $ 35  Trillion of stocks on issue.

$ 40 Trillion for the bonds issued include approximately $16 trillion in US Government Treasury debt, about $9 – 10 trillion in mortgage-related bonds, more than $9 trillion in corporate bonds and more than $3.8 trillion in municipal bonds.

After mopping up all of that plus all the stocks on the stock market, they could move on to buy all the real property in the United States (real estate) then all US based commodities held in private hands. After that haul, they could buy all the US based precious metals and collectibles.

The real estate component would include about $ 32 Trillion for US homes and $ 16 Trillion for all commercial property.

Total Bill for all stocks, bonds and real estate =  US $ 123 Trillion.   Easy —  as long as CPI inflation stays muted and the currency stays strong and stable against other currencies.


In July 2020, the Federal Reserve Balance Sheet shows just $ 7 Trillion in assets purchased. So to get to US$ 123 Trillion, there is a long, long way to go. This game is far from over.

They will try to reduce their asset holdings from time to time in a bid to “return to normal”. There will be much talk of returning the assets to private ownership. However, as far as BOOM can see in our current circumstances, this process will inevitably stall and the balance sheet expansion will resume.

The vast majority of those assets currently held are in Federal Government Treasury Securities (Bills, Notes & Bonds) and Mortgage Backed Securities. But the Federal Reserve also already owns $ 6.8 Billion of corporate bond ETFs. They are the third largest investor in LQD (iShares investment grade corporate bonds) and the second largest holder in VCSH (Vanguard Short Term Corporate Bonds). And the fifth largest holder in JNK (Junk Bonds — Barclays High Yield Bonds).

And they are moving towards buying other assets and (possibly) equities through the “Special Purpose Vehicles” recently established (and owned) by the Treasury but funded exclusively by the central bank.


As the US Federal Reserve becomes more and more an asset owner and portfolio manager over time rather than solely a lender of last resort and a guardian of monetary policy, the financial landscape will inevitably and progressively change. The future looks more and more like a slow but steady return to feudalism with the central bankers becoming self-appointed feudal lords, collecting rental income and dividends. They will be effectively living off the fat of the land — a club of great privilege.

There are some analysts predicting the collapse of the US corporate bond market. Being a simple soul, BOOM can’t understand such a view. Why would the Fed sell out in a panic? The Fed does not have any need for cash. And who would they sell to? Surely the Fed would just buy more?

Other analysts are predicting the collapse of the US Dollar. For that to happen, the US sovereign bond market would have to collapse (US Treasury Bills, Notes and Bonds). Why would the Fed sell out of its Government bond holdings in a panic?  Surely the Fed would just buy more?

Yet other analysts are predicting the collapse of the US stock market. That event would present the Fed with another great buying opportunity. It could happen but why would the Fed not start buying?

Others are predicting the collapse of the US real estate market. That would trigger the collapse of the US banking sector. Then the Fed could buy up all the failed banks and inherit all the collateral assets at bargain basement prices.

In the game of Monopoly, there is a thing called “Bank”. The Federal Reserve is the Bank in this game of monopoly called the US asset market, all powerful and always ready to “lend a hand”.

While all these asset price games are unfolding, the real economy will be effectively starved of sufficient funds to return to stable GDP growth and persistent CPI inflation (that situation is called “normal” in the game of mainstream economics). At present, none of the fresh new money created by the Fed flows directly into the real economy without passing first through the asset economy. It looks like the people who are not central bankers or connected to central bankers in some way will eventually be reduced to a relative peasant status, bereft of assets and burdened with rents, taxes and costs. A grim future indeed.

Welcome to the world of endless asset price inflation, massive central bank ownership of all asset classes, low economic growth and low CPI inflation. That world will slowly begin to resemble the ancient world of feudalism and peasantry. This appears to be a one way trip. There is no going back.




In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.


EMAIL: gerry {at}




Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work.
How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Youtube Video —


Paper:  Money in the Modern Economy  PDF —  CLICK HERE

Quarterly Bulletins Index

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”


The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.

“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.” 
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”

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MOLS Denmark

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