“You think that a wall as solid as the Earth separates civilisation from barbarism. I tell you the division is a thread, a sheet of glass. A touch here, a push there, and you bring back the reign of Saturn.” — John Buchan
“Barbarianism is the natural state of mankind. Civilisation is unnatural… Break the skin of civilisation and you find the ape, roaring and red-handed.” — Robert E. Howard
Today we turn away from the world of markets.
Instead we turn our thoughts to civilisation… and its discontents.
From Hong Kong to Spain, Azerbaijan to Brazil, civilisation wobbles and gives.
And barbarism bares a menacing fang.
We are accustomed to riotous scenes from the basket cases of the world.
But Hong Kong is not Port-au-Prince. And Barcelona is not Khartoum.
Neither is Santiago, Chile…
Chaos Come to the Most Stable, Prosperous Nation in South America
Chile stands as the sturdiest, most placid and prosperous nation in South America.
It ranks 18th in the Heritage Foundation’s 2019 Index of Economic Freedom (United Kingdon is ranked 7th).
The World Banks labels Chile a high-income economy.
Chile’s real GDP expanded 4.02% in 2018.
Projected real growth this year runs to 2.52%.
Meantime, Chile’s 2018 inflation rate came in at a reasonably disinflated 2.32%. It was 2.18% the year prior.
As any nation of Earth, Chile is beset by social maladies.
Wealth inequality, for example, is high by world standards.
Chile’s “Gini coefficient” — a measure of wealth disparity — has it the 15th most unequal nation of the world.
And its democratic record is far from spotless. Between 1973 and 1990 it languished under the authoritarian rule of Augusto Pinochet.
But in all, Chile presently enjoys every reasonable blessing of civilisation.
Yet Chile’s capital, Santiago, this past week has been a scene of riot, bedlam, plunder, murder, arson…
A License to riot
Why? Here is the proximate answer:
Authorities increased metro fares in Santiago… by 4%.
Yet that 4% pinprick tilted the precarious balance between order and chaos… and unleashed the hounds.
Protesters flooded the streets on Oct. 14.
As with any crowd of requisite bulk, madness was the rule — not the exception.
Barbarism put civilisation to rout… and chased it from the streets.
Berserkers sacked, looted, vandalised, torched.
Violence claimed at least 18 lives.
In came the army to restore order. Authorities have collared nearly 1,500 discontents and clapped them into jail.
The Fragility of Civilisation
My good friend Simon Black is an American expatriate. He esteemed Chile so highly he camped down there seven years.
And Simon draws disturbing lessons from the Chilean drama unfolding. Among them:
1) It can happen anywhere.
It’s not just Chile. Looking around the world right now we can see major demonstrations and even violence in places like Hong Kong, Spain, Haiti, Lebanon, etc…
Political tensions, social tensions, economic tensions… they exist everywhere, in rich countries and poor countries alike.
People everywhere are tightly wound, and it doesn’t take much for them to become unhinged. If you think this can’t happen where you live, think again.
2) It can happen faster than anyone realises.
The weather in central Chile is one of the great benefits of living there; it’s warm, sunny, and dry… southern California climate.
And last Friday was a particularly beautiful day. By lunchtime, people were out in the parks enjoying the weather. It was calm, peaceful and joyful.
Within a matter of hours the city had turned into a war zone. Hours.
One of my team members told me on the phone yesterday, “If you had said last Friday afternoon that Santiago would be in chaos by nightfall, I would have laughed… And then it happened.”
Could It Happen Where You Are?
It cannot happen here, you scoff.
Perhaps you are right — we do not argue otherwise.
But perhaps you are wrong.
How many people saw 1987’s Black Monday coming? Or 1929’s Black Tuesday?
How many people believed Donald Trump would one day rise to the presidency of the United States?
Yet they all of them occurred.
Perhaps if we “break the skin of civilisation”… beneath we will “find the ape, roaring and red-handed.”
Below, Jim Rickards takes you to the year 2026. He reflects upon the great Panic of 2024… and a world drastically changed. Could it happen? You be the judge. Read on.
All the best,
A Tour of the Future
As I awoke this morning, Sunday, Oct. 13, 2026, from restless dreams, I found the insect-sized sensor implanted in my arm was already awake. We call it a “bug.” U.S. citizens have been required to have them since 2024 to access government health care.
The bug knew from its biometric monitoring of my brain wave frequencies and rapid eye movement that I would awake momentarily. It was already at work launching systems, including the coffee maker. I could smell the coffee brewing in the kitchen. The information screens on the inside of my panopticon goggles were already flashing before my eyes.
Images of world leaders were on the screen. They were issuing proclamations about the fine health of their economies and the advent of world peace. Citizens, they explained, needed to work in accordance with the New World Order Growth Plan to maximise wealth for all. I knew this was propaganda, but I couldn’t ignore it.
Removing your panopticon goggles is viewed with suspicion by the neighborhood watch committees. Your “bug” controls all the channels.
I’m mostly interested in economics and finance, as I have been for decades. I’ve told the central authorities that I’m an economic historian, so they’ve given me access to archives and information denied to most citizens in the name of national economic security.
My work now is only historical, because markets were abolished after the Panic of 2024. The crash of 2020 was bad, but the Panic of 2024 was the final nail in the market’s coffin. That was not the original intent of the authorities. They meant to close markets “temporarily” to stop the panic, but once the markets were shut, there was no way to reopen them without the panic starting again.
Today, trust in markets is completely gone. All investors want is their money back. Authorities started printing money after the Panic of 2008, but that solution stopped working by 2022. Probably because so much had been printed under QE7. When the panic hit, money was viewed as worthless. So markets were simply closed.
In 2024, the Group of 20 major powers, the G-20, abolished all currencies except for the dollar, the euro and the ruasia. The dollar became the local currency in North and South America. Europe, Africa and Australia used the euro. The ruasia was the only new currency — a combination of the old Russian ruble, Chinese yuan and Japanese yen — and was adopted as the local currency in Asia.
There is also new world money called special drawing rights, or SDRs for short. They’re used only for settlements between countries, however. Everyday citizens use the dollar, euro or ruasia for daily transactions. The SDR is also used to set energy prices and as a benchmark for the value of the three local currencies. The World Central Bank, formerly the IMF, administers the SDR system under the direction of the G-20. As a result of the fixed exchange rates, there’s no currency trading.
All of the gold in the world was confiscated in 2024 and placed in a nuclear bomb-proof vault dug into the Swiss Alps. The mountain vault had been vacated by the Swiss army and made available to the World Central Bank for this purpose. All G-20 nations contributed their national gold to the vault. All private gold was forcibly confiscated and added to the Swiss vault as well. All gold mining had been nationalised and suspended on environmental grounds.
The purpose of the Swiss vault was not to have gold backing for currencies, but rather to remove gold from the financial system entirely so it could never be used as money again. Thus, gold trading ceased because its production, use and possession were banned. By these means, the G-20 and the World Central Bank control the only forms of money.
Some lucky ones had purchased gold before 2020, when it was under $2,000 an ounce, and sold it when it reached $40,000 per ounce early in 2025. By then, inflation was out of control after the Western democracies conducted a failed experiment in Modern Monetary Theory, and the power elites knew that all confidence in paper currencies had been lost. The United States was hit especially hard. The only way to re-establish control of money was to confiscate gold. But those who sold near the top were able to purchase land or art, which the authorities did not confiscate.
Those who never owned gold in the first place saw their savings, retirement incomes, pensions and insurance policies turn to dust once the hyperinflation began. Now it seems so obvious. The only way to preserve wealth through the Panic of 2024 was to have gold, land and fine art. But investors not only needed to have the foresight to buy it. They also had to be nimble enough to sell the gold before the confiscation, and then buy more land and art and hang onto it. For that reason, many lost everything.
Land and personal property were not confiscated, because much of it was needed for living arrangements and agriculture. Personal property was too difficult to confiscate and of little use to the state. Fine art was lumped in with cheap art and mundane personal property and ignored.
Stock and bond trading were halted when the markets closed. During the panic selling after the crash of 2024, stocks were wiped out. Too, the value of all bonds were wiped out in the hyperinflation of 2024-25. Governments closed stock and bond markets, nationalised all corporations and declared a moratorium on all debts.
World leaders initially explained it as an effort to “buy time” to come up with a plan to unfreeze the markets, but over time, they realised that trust and confidence had been permanently destroyed, and there was no point in trying.
Wiped-out savers broke out in money riots soon after but were quickly suppressed by militarised police who used drones, night vision technology, body armor and electronic surveillance.
Highway tollbooth digital scanners were used to spot and interdict those who tried to flee by car. By 2026, the U.S. government required sensors on all cars. It was all too easy for officials to turn off the engines of those who were government targets, spot their locations and arrest them on the side of the road.
In compensation for citizens’ wealth destroyed by inflation and confiscation, governments distributed digital Social Units called Social Shares and Social Donations. These were based on a person’s previous wealth. Americans below a certain level of wealth got Social Shares that entitled them to a guaranteed income.
Those above a certain level of wealth got Social Donation units that required them to give their wealth to the state. Over time, the result was a redistribution of wealth so that everyone had about the same net worth and the same standard of living.
To facilitate the gradual freezing of markets, confiscation of wealth and creation of Social Units, world governments coordinated the elimination of cash in 2024-25. The “cashless society” was sold to citizens as a convenience. No more dirty, grubby coins and bills to carry around!
Instead, you could pay with smart cards and mobile phones and could transfer funds online. Only when the elimination of cash was complete did citizens realise that digital money meant total control by government. This made it easy to adopt former Treasury Secretary Larry Summers’ idea of negative interest rates. Governments simply deducted amounts from its citizens’ bank accounts every month. Without cash, there was no way to prevent the digital deductions.
The government could also monitor all of your transactions and digitally freeze your account if you disagreed with their tax or monetary policy. In fact, a new category of hate crime for “thoughts against monetary policy” was enacted by executive order. The penalty was digital elimination of the wealth of those guilty of dissent.
The entire process unfolded in small stages so that investors and citizens barely noticed before it was too late. Gold had been the best way to preserve wealth until the Panic, but in the end, it was confiscated because the power elites knew it could not be allowed. First, they eliminated cash. Then they eliminated diverse currencies and stocks. Finally came the hyperinflation, which wiped out most wealth, followed by gold confiscation and digital socialism.
By last year, 2025, free markets, private property and entrepreneurship were things of the past. All that remains of wealth is land, fine art and some (illegal) gold. The only other valuable assets are individual talents, provided you can deploy them outside the system of state-approved jobs.