The Shock Doctrine

One of the most influential books among global power elites in the past 10 years is Shock Doctrine: The Rise of Disaster Capitalism, by Naomi Klein, published in 2007. The shock doctrine is an essential concept for understanding how power elites such as central bankers, finance ministers and the ultra-rich work behind the scenes to advance their agendas.

It’s also how today’s world could quickly turn into the dystopian 2025 scenario I showed you in yesterday’s e-letter. This is not conspiracy mongering or science fiction; this is fact.

Shock doctrine is simple. Political leaders use crises to ramrod policies into place that no one would accept in normal times.

Predictable surprises

The shock doctrine begins with the fact that power elites have agendas that take decades or even centuries to implement. These agendas include things like world money, global taxation, control of physical gold, population control and other plans intended to increase the power and wealth of the few at your expense.

Political elites are not fools. They understand that their agenda is highly unpopular. They also understand that democracy empowers everyday citizens and makes their unpopular plans hard to implement. This is where the shock doctrine comes in useful.

A shock can take many forms. It can be a financial panic, terror attack, natural disaster, assassination or other extreme event. It’s the kind of event that seems to come out of the blue, but is actually somewhat regular and predictable.

When the shock occurs, people become fearful and look to their leaders for comfort. People begin to value order above liberty. At these critical moments, the elites stand ready with a ‘plan’ that will restore order…but also secretly advance their agenda.

In effect, elites use inevitable shocks as a cover to implement plans that you would not accept in ordinary times. Order is restored at the expense of liberty. When the shock wears off, the new order remains but liberty is lost forever. This is the shock doctrine at work. After each episode, the elites retreat and wait for the next shock, which is always just a matter of time.

A good example is the US Patriot Act, that US Congress passed in 2001. This was the legislative response to the September 11 terrorist attacks. Several good items in the Patriot Act aided the global war on terror and helped to eliminate Osama bin Laden. But there is also much that has been abused in the years since.


Your privacy is already gone

You and I have lost our privacy and have our private communications, emails, phone calls and other records collected. If you have travelled through the US lately, you will have seen the new kiosks at Customs that take a digital retinal scan of each returning traveller. This is something that border control used to handle with a paper passport.

That retinal scan goes into a digital databank, perhaps to be used to pursue political enemies. It has already happened, in last year’s IRS scandal. Privacy and liberty are mostly gone as the result of policy responses to various shocks such as September 11. There are many other examples.

For investors, the important question is this: how will the shock doctrine be used next? What is the unfinished business of the power elites? What is the next part of the hidden agenda to be revealed? And what shock will be used as cover to advance that agenda?

These questions have definite answers that I’ll explain to you when you join my newsletter, Jim Rickards’ Strategic Intelligence. Regardless of those agendas and coming shocks, there are things investors can do today to avoid being manipulated by the power elites.

Investing to protect yourself from their plans
There are investments such as gold, land and fine art that are not digital and cannot be wiped out by computers. There are wealth preservation strategies that are not subject to current tax. There are portfolio diversification strategies that are robust to many types of shocks even if each particular shock cannot be predicted exactly.

You should implement these strategies now, before the next shock arrives and options become limited or unavailable.

The power elites will continue to play the shock doctrine game. But you do not have to be the victim. The key is to know how the shock doctrine works — and prepare now, before the next shock strikes.


Jim Rickards,
for Markets and Money

James G. Rickards is the strategist for Strategic Intelligence, the newest newsletter from Port Phillip Publishing. He is an American lawyer, economist, and investment banker with 35 years of experience working in capital markets on Wall Street. He is the author of The New York Times bestsellers Currency Wars and The Death of Money. Jim also serves as Chief Economist for West Shore Group.


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Markets and Money offers an independent and critical perspective on the Australian and global investment markets. Slightly offbeat and far from institutional, Markets and Money delivers you straight-forward, humorous, and useful investment insights from a world wide network of analysts, contrarians, and successful investors.

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