Be Very Afraid Of A Government Big Enough To Do This….

A new rinkle from my prior posts…Fusion GPS and DOJ…husband and wife connection.


Boston Globe –  FISA Documents Reveal FBI Collusion

In other words, the FBI used oppo research paid for by the Democrats as justification for government spying on a political opponent and other Americans.

But there’s more. In another incredible coincidence, Fusion GPS had hired scholar and professor Nellie Ohr as a “paid Russian expert.” Nellie Ohr happens to be married to Bruce Ohr, deputy attorney general in the Justice Department. Bruce Ohr is alleged to have passed his wife’s anti-Trump research to the FBI. He was demoted for failing to disclose not only his wife’s employment with Fusion GPS, but also his own meetings with Fusion GPS founder Glenn Simpson.

The FISA court was never told any of that. They were never supposed to know. None of us was ever supposed to know.

When thousands of DNC emails were leaked to the public through Julian Assange’s organization WikiLeaks, we learned that Hillary Clinton had abused the primary process, nearly bankrupted the DNC and effectively stole the nomination from Bernie Sanders. We also learned the press played favorites with Clinton, getting her approval before running stories and forwarding debate questions to Clinton in advance. (The official line is Russians hacked the DNC computers and gave the emails to WikiLeaks. Assange and former U.S. and U.K. intelligence officials vehemently deny this, and maintain it was an inside “leak,” not a hack. The DNC refused to turn over their servers to the FBI for inspection.)

And then there is Hillary Clinton’s misuse of a personal email server to handle classified State Department information. We now know that then-FBI director James Comey decided not to prosecute Clinton before the investigation was even concluded. We also know that FBI attorney Peter Strzok rewrote Comey’s initial report to change Comey’s description of Clinton’s conduct from “grossly negligent” — which was a violation of the applicable federal statute — to “extremely careless.”

This is the same Peter Strzok who expressed his loathing for Donald Trump in many of the tens of thousands of texts he exchanged with his lover and fellow FBI attorney Lisa Page. Strzok infamously assured Page that they had an “insurance policy” and that they “would stop” Trump from becoming president. At a congressional hearing two weeks ago, Strzok arrogantly insisted that his bias did not affect his job performance.

He must think we’re all idiots.

Carl Jung And Figuring Out Our Motivations

There are so many areas of Carl Jung’s work that I’m drawn to. You’ve heard the name but I encourage you to dig into the man and his work.  His life’s work was about the inner psyche of each of us and how it shows up, what happens when it’s broken and towards the end of his life, his work shifted to how entire societies can collectively work for good or turn to evil.  (Like Nazi Germany).

Jordan Peterson references Jung quite a bit so I thought it would be important to dig in.  On the journey, this summer, I read Gulag Archipelago and Ordinary Men. By looking at the extremes of what men are capable of it helps to understand what lies in each of us.  I find that the repeating of history, the dynamics in a business team and my ability to lead and motivate people all to share their roots in aspects of Jung’s work and my theories around the 7 Deadly Sins.

This is a great, long form, background on Jung. The last half hour is excellent. Dig into Jung, dig into your dreams and dig into your shadow.



Why does this happen in our modern day?

What would you do if this came to your hometown?

We all think that we’d be this guy and do the heroic thing….but would we?


Dig In To My Second Least Favorite President

If you thought you know about Watergate, I can’t recommend enough the Slate podcast series about Watergate, Slow Burn.  Neyfakh goes into deep rabbit holes around the Watergate story. This seven-part retelling helps those of us that didn’t understand the nuances of the story to fully immerse ourselves into the blow by blow of probably one of the darkest times in American history.  What I appreciated is Neyfakh’s telling of the story without tieing in parallels to today’s politics.  He lets the listener make inferences and boy are there some patterns repeating some 40 years later!

HERE is the link to the podcast. 

Here’s what struck me during the listening of the series;

1. I knew Nixon was a broken man and I’ve written about him on this blog in the past (below).  I got a deeper insight into his paranoia and a clear view of how absolute power corrupts absolutely.   Of course, Madison’s quote rings true; If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In the end the three branches of government kept the system in check. My theory on how the 7 Deadly Sins lives in each of us is once again proven.  Nixon had a career mired absolute ambition, pride and wrath.

2. Nixon used every apparatus of government to wield his power.  I’ve covered the taping of Trump’s campaign offices by the NSA and hope that all Americans see what a slippery slope those events exposed.

3. The 4th Branch of Government (the media) and honest men were important to bring Nixon down.  So in the end, the systems of checks and balances rose above politics and the Republic was preserved.  Trump’s media bashing is another slippery slope. In our days of social media echo chambers, our news is more segmented than ever.  If you turn on Fox News or CNN you know exactly what you are going to get.  This echo chamber didn’t start with Trump. He and his election are what I like to call and Equal But Opposite Reaction to the prior administrations’ (Bush 2 and Obama) sins. All hands are dirty in this debate. Only an educated citizenry can take in the information and decide for themselves on what is true.  I’ve written a lot about the state of education in America – HERE.  Suffice to say, we are on the wrong track and I’ve rolled up my sleeves to try to fix it in my own small way.

4. The conservative movement, in this case the dog whistles to segregation and backlash to the hippie movement, needs to be checked.  The blind devotion to Nixon in the face of such abuses of power is scary. Both Obama and Trump supporters should carefully watch out for what they wish for. Listen to Episode 5 and get a sense of what Trump supporters today and Nixon supporters in the early 1970’s have in common.


You think you know the story, or maybe you don’t. But Watergate was stranger, wilder, and more exciting than you can imagine. What did it feel like to live through the scandal that brought down a president?

Join Leon Neyfakh for an eight-episode podcast miniseries that tells the story of Watergate as it happened—and asks, if we were living through Watergate, would we know it?

In the end, our form of government is not the best, but as Winson Churchill said

“Democracy is the worst form of government, except for all the others.”

― Winston S. Churchill.



The Republic survived a Civil War, a Great Depression, World Wars, Richard Nixon, Jimmy Carter, George Bush, Barrak Obama and it will survive Donald Trump.  The systems of checks and balance and the power of the voting booth seem to win out in the end.  A government for and by the people pervails.  Now math, that’s hard to outrun.  The math is creeping up on us and when the spark hits and bubbles burst, we need to be careful not to run to government filled with broken men to solve our problems.


More On My Prior Nixon Posts;


Nixon, My Second LEAST Favorite President

Blind ambition, narcissism, a man grabbed and consumed by power, you name it, Nixon suffered from it.  From early in 1968 where he was behind extending the Vietnam war to make Johnson look bad;

There was no doubt, said Johnson, that Nixon’s campaign team was trying to scupper peace talks aimed at ending the Vietnam War. They were afraid that peace in Vietnam would help Nixon’s Democratic rival, Hubert Humphrey, to clinch the election.

Johnson threatened to go public with his information. The election was just days away.

But Johnson never did go public. He received an emphatic denial from Nixon in person the next day. And perhaps more importantly, Johnson never had the definitive evidence he needed tying Nixon himself to the efforts being made by his campaign team.

A new discovery by historian John Farrell might well be the smoking gun that Johnson needed. It’s published in The New York Times.

The peace process in 1968 was real. The Soviet Union had persuaded North Vietnam to come to the table, the US just needed to deliver South Vietnam. At the beginning of November, both sides made goodwill gestures to prepare for the talks. The Communists stopped shelling cities and halted attacks across the Demilitarized Zone between North and South Vietnam. Johnson ordered a halt to the massive US aerial bombing campaign. “We’ve had 24 hours of relative peace,” he said in that Nov. 2 call to Nixon’s friend, Sen. Everett Dirksen (R-Ill.). “If Nixon keeps the South Vietnamese away from the conference, well, that’s going to be his responsibility. Up to this point, that’s why they’re not there.”

To starting of the EPA, OSHA, enacted price and wage controls and probably the most devastating short-term move any President could make was that he took the US off the gold standard and cut a deal to make sure the Petro-Dollar was adopted by all oil-producing nations.  Frustrated by a slow economy going into the 1972 elections (the Watergate election), Nixon removed America from the gold standard and forever put the central bankers and the federal reserve in charge of running up the largest deficits in history.  With Kissinger at his side, securing the Dollars place as the primary currency for the trade of oil gave America a 40 year run of prosperity. Prosperity at a cost.  The constant battles and interventions in the middle east are always in the name of protecting American interests….the petrodollar.

“Can you imagine what this man would have been like if somebody would have loved him?” —Henry Kissinger

Here’s one of the biggest decisions made that Nixon made. It was an election year, we were leading into the Watergate scandal and Nixon knew he’s got a temporary bump from leaving the gold standard. Fast forward 40 years and we can see what the fiat money system has morphed into.  My favorite line ‘the many responsible lenders of the International banking community’.


I Love This Stoic – Marcus Aurelius (On Manhood)

Art of Manliness 

1. Every Man Has a Primary Battle

“Life is warfare . . . Then what can guide us? Only philosophy.”

As David Brooks noted in his fantastic podcast with Brett, every man has a primary battle or two in life. Dwight Eisenhower could be viciously angry, but found ways to deal with it. Jack London battled alcoholism, and while it ultimately contributed to his death, he battled through it, and lived a remarkably productive life. It’s quite possible that Marcus Aurelius feared death (not just his, but for his loved ones too) and had a short temper, and so he wrote himself these notes, repeating his themes over and over.

Let this be a lesson that while all humans face universal challenges, each of us has a primary struggle or two in life. Laziness, substance abuse, compulsive lying, over-eating, etc. It could also be things out of your control — the death of a spouse or child, an abusive family, job loss. Whatever your own personal context may be, it would serve you well to do like Marcus and write out meditations and exhortations to yourself as “moral reminders” — pithy ideas to keep you going in the midst of ongoing hardships and struggles.


2. Every Man Should Take Lessons from Everyone Around Him

“From my grandfather Verus I learned good morals and the government of my temper.

From the reputation and remembrance of my father, modesty and a manly character.

From my mother piety and beneficence . . .”

Our modern culture, however, has forgotten this ancient lesson. A moral failing by a modern business person, celebrity, politician, or even a company sparks internet outrage and calls for boycotts. Behaviors of historical figures now judged to be offensive, even if common to the time in which the men lived, are enough to write off all of their other admirable virtues and worthy accomplishments.

We don’t write ourselves off despite our flaws. Likewise, the wisest of men know that every person is a mosaic of virtue and vice, and that wisdom can be found in everyone, if only you’re willing to look.

3. Fate Plays a Role in Every Man’s Life — You Can Either Fight It or Accept It

“To the gods I am indebted for having good grandfathers, good parents, a good sister, good teachers, good associates, good kinsmen and friends, nearly everything good.”

“For all these [blessings in my life] require the help of the gods and fortune.”

As Isaac Lidsky has said, accept that life is a game of poker. While there are certain things you can do to increase your odds of winning, a large part of each hand is completely out of your control. Would you fight the cards dealt in a given hand, arguing that it’s not fair or that you want a re-shuffle? Of course not. While life is certainly higher stakes than poker, you just have to accept that what happens, happens. Even with death.

You can either double down and try to gain a greater grip of control (and lose much in the process), or you can know that whatever randomness and complexity life throws your way can be an opportunity to learn, grow, and build your resilience, even if the hand you’ve been dealt is pretty crappy. Sometimes even a 7-2 — statistically the worst starting hand in poker — wins out every once in a while.

4. A Man is Not to Be Consumed by the Actions and Attitudes of Others

“When you wake up in the morning, tell yourself: The people I deal with today will be meddling, ungrateful, arrogant, dishonest, jealous and surly. . . . none of them can hurt me.”

“Don’t waste the rest of your time here worrying about other people . . . It will keep you from doing anything useful.”

“Why do you not rather act than complain?”

How much of your day is spent complaining — either out loud or silently — about the actions of others? The driver who cut you off. The slow barista. Our deadlocked government. Your crank boss. How much of your energy and time is wasted thinking and stewing about those things?

As Aurelius wisely notes, you cannot be harmed or hurt by any of these people unless you allow it. Your life is wasted in choosing to be guided by the thoughts and actions of others.

We aren’t in control of the events that play out around us. But we are in control of our own attitude and responses to those events. It’s really that simple.

Viktor Frankl clung to this idea when he was imprisoned at both Auschwitz and Dachau during the Holocaust. He said: “The one thing you can’t take away from me is the way I choose to respond to what you do to me. The last of one’s freedoms is to choose one’s attitude in any given circumstance.”

5. Strenuous Action is the Answer

“When thou hast trouble in getting up, say to thyself: I awake to do the work of a man; why then should I grieve for having to do the things for which I was sent into the world? Was I born to remain warmly in bed under my covers? But it is so pleasant. Wert thou born for pleasure, then? Was it not for action, for work?”

“On the occasion of every act ask yourself . . . Will I regret it?”

“Why were you born? For pleasure? See if that answer will stand up to questioning.”

The catchphrase of The Strenuous Life is “Do Hard Things.” The point being that hard things — learning new skills, pushing yourself physically and mentally, serving others — is far more inherently fulfilling and satisfying than leading an easy, climate-controlled, smartphone-saturated lifestyle….

There is an immense pleasure to be found in partaking in the strenuous life. And because it’s earned, it’s a pleasure that’s far greater than what you’d find simply lying about. I assure you, a good meal and a good beer tastes far better when you’ve first hiked a few miles or lifted a few hundred pounds of iron.


6. A Man Should Think, Do, and Be Good

“While you live, while it is in your power, be good.”

“Consider if you have behaved to all in such a way that this way be said of you: Never has he wronged a man in deed or word.”

“Look within. Within is the foundation of good, and it will ever bubble up, if you will ever dig.”

“No longer talk at all about the kind of man that a good man ought to be, but be such.”

“What is your art? To be good.”

s Aurelius advises, “inquire of yourself as soon as you wake from sleep.” Start every morning by getting in a mindset where you’re prepared to look for opportunities to serve and be useful. Benjamin Franklin practiced this, asking himself every morning “What good shall I do this day?” Then, at the end of the day, review your actions and inquire of yourself, as he did, “What good have I done today?” By bookending your day with a meditation on goodness, you will orient your soul more and more towards virtue.

Make your art that of being good. Do not simply think on it or talk about it; do good.

Recession Ahead – What To Expect and How To Weather The Storm

John Mauldin is one of the economist/traders I follow. His analysis is well researched and his experience in the markets lends credibility to his predictions.  I find his ability to explain difficult subjects in common terms.

His recent series on Train Crash Preview, details how we’ve moved from business cycles of expansion and contraction (recession and boom), now being replaced by credit cycle boom and bust cycles.  Government intervention into the credit market is causing abnormal investments and asset inflation.  His theory is that the bing of corporate debt will be the spark that starts the run for the doors.  The series is well worth a read.

Below is the ‘what happens when that happens’  portion of his analysis.  It ain’t going to be good for retail investors and employees.

Mauldin’s prediction is that from 2020 to 2030 it’s going to suck.  He believes we’ll whiplash between Republican and Democratic administrations with the cry from the voters to DO SOMETHING. What will we do?  Pump up the debt. The entire globe has already been taking on massive amounts of debt. From central bankers to corporate to consumer, we are on a once in a 5000-year debt run.  Speaking of once every 5000 years, Mauldin is predicting what I asked one of our local Congressman on air about 3 years ago … ‘what’s the end goal with all this debt binge? Are we just going to reset the decimal point and refactor debt?’ A good old Biblical debt jubilee.

To put some numbers behind the debt:

An exception to this is the Bank for International Settlements (BIS), which has been making loud noises about the toxic level of global debt and the anticipated bubble. It recently reported that the global debt of 2008 was $60 trillion, small when compared to the current debt of $170 trillion. To make matters worse, today’s global debt is 40 percent higher in relation to GDP than it was in 2008, just prior to the Lehman Bros. downfall. To add to the current headache are the rising debt levels of emerging markets and corporate debts. According toMcKinsey & Company, a global consulting firm, two-thirds of U.S. corporate debt are from corporations that pose a high default risk.

So my theory that business cycles don’t matter as much as credit availability.  I believe that buying a stock with the old techniques of Price to Earnings Ratios and the strength of the management teams is gone. The stock market is nothing more than gambling.  Companies are not grabbing market share or working on becoming more efficient, they are buying back stock to increase the share price.  Asset bubbles are appearing in real estate and stocks-bonds. These asset bubbles are blowing up in China, India, Brazil, and Japan.  The wealthy of these countries are trying to get their money out of shakey political systems and into North American real estate.  Look to LA, NY, San Francisco (the tech sector has helped drive this market more so than foreign investors). Look at Toronto or NY City to see where the foreigners with money are trying to protect their assets. Bubbles, Bubbles EVERYWHERE. 

What Happens When That Happens

As you can read in the two analysis below, we are predicting the future. Some things, like the business cycle, the power of government intervention and accumulation of wealth at the expense of the masses have consistent patterns in history, we are in uncharted territory for a couple reasons. First, the numbers are so incredibly large. Mauldin talks about $30 Trillion in debt in America and we ballooned from $60 Trillion in global debt at the popping of our last debt bubble to $170 trillion globally today. These numbers are so astronomical it’s anyone’s guess on what will happen. Mauldin and Hughes allude to civil unrest inside the US, which they summarize will be squelched with ‘free cheese’, in the form of a Universal Basic Income or additional money from a government (printed in the form of debt), for the masses.  We could see a global war similar to the rise of Dictators in the 1930 lead to WW2.  Hitler was a loud mouth in Germany through the 1920’s who predicted bad times ahead for Germany at the hands of the victors of WW1 and the reparations that had been saddled on Germany. It wasn’t until the Crash of 1929 and the Great Depressions spread to Europe that people started to believe that the nut had some validity. We know how that turned out.  Do we have another set of evil men ready to fill a vacuum? You bet, we’ve had evil rulers from the beginning of time.

So my predictions are similar to Mauldin’s;

  1. The Spark – The next recessions, which can be sparked by any number of things are going to be a turning point.  Federal governments have learned that they can push the can by taking on debt and helicoptering every more capital into the economy.
  2. If the central banks go back into the debt business and the recession is minor. Buy the dip and buy areas that have been shown to artificially grow during a Fed-fueled debt cycle. Think blue-chip stocks and real estate.  On real estate, chose wisely the states and cities that are playing long ball. Stay away from Illinois and California and focus on Arizona and Texas.  I’d look to the south, states like North Carolina, Georgia, Oklahoma are deep red and nice places to live.  Cities like Dallas, Phoenix, Colorado Springs, or Charollete are going to fare better than others.  Farmland is always interesting, especially if you can speculate on the edge of one of the cities I’ve mentioned and created a capital-intensive operation that will give you tax incentives during the crazy times.  I’m going back to my roots and starting a boutique cattle operation in Arizona for some of these very reasons.  I’m also growing and developing Charter schools in these markets for similar reasons.
  3. Low Rates and Taking on Debt. The flood of debt keeps interest rates low for another decade or so. If you have the income, buy assets with debt. Careful about overpaying because one day the $100k house you bought may be worth $50k. If the $100k house is generating rents to cover your debt payment, ride the wave.  I’m exploring developing a fast-casual hotel like Holiday Inn Express.  Right now it’s too frothy to buy the land and cover the development costs. During a dip, that asset looks stronger.  Build it right and put it in the right area and the cash flow with limited labor starts looking pretty nice.
  4. Look international – I tell my kids that their Great Great Grandparents left Ireland for a better life. Think globally. Other markets around the world that are great spots to live, fertile lands with tons of natural resources are all places to keep an eye on. I’ve enjoyed Doug Casey’s philosophy and his International Man site which explains some of the nuances of making an international decision.
  5. Be super careful of the stock market right now.  I took my soon-to-retire father in law out of the stock market in early 2008 before the crash. It was too frothy and he was too late in his investment game to weather the storm. I didn’t put him back in and missed the run-up but who would have guessed the entire globes central banks would forgo the pain and pump in all the liquidity?  Next time, I’ll know better.  When the recession hits and the stock market dips 30-40% AND we see quantitative easing or massive intervention, plow into the market and ride the next wave.
  6. Gold and Bitcoin – I dig in to these but I’m still on the fence.  Both of these are stores of value in times of debt-fueled asset inflation. When all else loses market fundamentals, these assets are the insurance policy.  Bitcoin is the scariest. Gold is being bought and stored by China and Russia in massive quantities. That should say something.
  7. A Once Every 5000 Year Debt Jubilee – long shot but who knows. Watch for a world currency and a world central bank to make sure this never happens again. Mauldin suggests it gets quitly decided behind closed doors. That’s never good.

Lending Drought

Remember how Peter Boockvar describes the new cycle. Instead of recession pushing asset prices lower, lower asset prices trigger the recession. That will be the next stage as falling stock and bond prices hit borrowers. Rising defaults will force banks to reduce their lending exposure, drying up capital for previously creditworthy businesses. This will put pressure on earnings and reduce economic activity. A recession will follow.

This will not be just a US headache, either. It will surely spill over into Europe (and may even start there) and then into the rest of the world. The US and/or European recession will become a global recession, as happened in 2008.

Aside: Europe has its own set of economic woes and multiple potential triggers. It is quite possible Europe will be in recession before the ECB finishes this tightening cycle. With European rates already so low, and the ECB having already bought so much corporate debt, I wonder how else they will try to bring their economy out of recession? Everything is on the table.

As always, a US recession will spark higher federal spending and reduce tax revenue, so I expect the on-budget deficit to quickly reach $2 trillion or more. Within four years of the recession’s onset, total government debt will be at least $30 trillion, further constraining the private capital markets and likely raising tax burdens for everyone—not just the rich.

Political Backlash

Meanwhile back at the ranch, job automation will intensify with businesses desperate to cut costs. The effect we already see on labor markets will double or triple. Worse, it will start reaching deep into the service sector. The technology is improving fast.

Needless to say, the working-class population will not like this and it has the power to vote. “Safety net” programs and unemployment benefit expenditures will skyrocket. The chart below from Philippa Dunne of The Liscio Report shows the ratio of workers covered by unemployment insurance is at its lowest level in 45 years. What happens when millions of freelancers lose their incomes?

Source: The Liscio Report

The likely outcome is a populist backlash that installs a Democratic Congress and president. They will then raise taxes on the “rich” and roll back some of the corporate tax cuts and increase regulatory burdens. They may even adopt my preferred consumption-oriented Value Added Tax (VAT)… but without the “reduce income taxes and eliminate payroll taxes” part that I suggested in 2016.

 At a minimum, this will create a slowdown but more likely a second recession. Recall (if you’re old enough) the back-to-back recessions of 1980 and 1982. That was an ugly time for those of us who lived through it.

Of course, that presumes a recession before the 2020 election. It may not happen—I put the odds at about 60–70%. Also, it is possible the Democrats will fumble what for them will be a golden opportunity. I’m not sure Republicans should view that as a “win” because they will then have to deal with the eventual recession themselves instead of being in opposition. I think by the latter part of the 2020s, US total government debt will be at $40 trillion. You think Washington is paralyzed now? You’ve seen nothing yet.

My friend Neil Howe thinks we could see a socially conservative, fiscally liberal party gain power. (Some would argue one already did, given the current GOP’s spending binge.) But in any scenario, I see very little chance the federal government will shrink or reduce its impact on the economy. That is already a big problem and will only grow. 

The Great Reset

Unemployment may approach the high teens by the end of the decade and GDP growth will be minimal at best. What do you call that condition? Certainly not business as usual. Long before that happens, the Federal Reserve will have engaged in massive quantitative easing. There’s a lot of misunderstanding about QE, so let me clarify something important.

Quantitative easing is not about “printing money.” It is buying debt with excess bank reserves and keeping that debt on the Fed’s balance sheet as an asset. The Bank of Japan is an example. They did not put currency (yen) into the market. That’s how Japan still flirts with deflation and its currency has gotten stronger. QE is the opposite of printing money, though there is a relationship. That’s one reason central bankers like it.

As this recession unfolds, we will see the Fed and other developed world central banks abandon their plans to reverse QE programs. I think the Federal Reserve’s balance sheet assets could approach $20 trillion later in the next decade. Not a typo—I really mean $20 trillion, roughly quintuple what they did after 2008. They won’t need to worry about the deflation that usually accompanies such deep recessions (dare we say depression?) because the Treasury will be injecting lots of high-powered money into the economy via deficit spending. But since we have never been in this territory before, I must say this is only my guess.

If that’s what they do, will it work? No. The world simply has too much debt, much of it (perhaps most) unpayable. At some point, the major central banks of the world and their governments will do the unthinkable and agree to “reset” the debt. How? It doesn’t matter how, they just will. They’ll make the debt disappear via something like an Old Testament Jubilee.

I know that’s stunning, but it’s really the only possible solution to the global debt problem. Pundits and economists will insist “it can’t be done” right up to the moment it happens—probably planned in secret and announced suddenly. Jaws will drop, and net lenders will lose.

While all that is brewing, technology will keep killing jobs. Many mainstream commentators and serious analysts like Karen Harris (see The Great Jobs Collision) are projecting that 20–40 million jobs will be lost in the US alone and hundreds of millions across the developed world.

As we get into the 2020s, the presidency and Congress will again be whipsawed, and we will begin to discuss Bernie Sanders’ “crazy” universal basic employment idea, or others like it. By then, the idea will not be considered crazy, but the only feasible choice. Even conservative politicians can see the light when they feel the heat.

All of this is going to lead to the most tumultuous decade in US history, even if we somehow (hopefully) avoid throwing a war into the mix, as is typical of the end of a Fourth Turning. Typically, the end of a Fourth Turning (which started in 2007, according to Neil Howe), has been accompanied by wars. This one could, too, though I think we will more likely see multiple low-grade skirmishes.

If we somehow get through all that, and particularly the Great Reset, the 2030s should be pretty good. In fact, think incredible boom and future. No one in 2039 will want to go back to the good old days of 2019. Our kids will think it was the Stone Age. But we have to get there first.

That will be our topic today as we continue my Train Wreck series. This will be chapter 8. If you’re just joining us, here are links to prior installments.

Tie-Ins – 7 Deadly Sins – 4th Turning

Big Tata – White Oak – Over 500 Years Old – Patagonia, AZ.

Mauldin breaks down the financial implications of gorging on debt. We don’t just live in finance, we are an integrated society and financial implication have an effect on our politics, our cities and our families.  Charles Hugh Smith weighs on the progression from abundance to scarcity. These theories of financial markets and societies tie into my theory of my 7 Deadly Sins resting in all of us and all of the societies. It also ties into the Straus – Howe theory of the 4th Turning.

Just as the acorn can lead to a 1000-year-old oak tree, that one day falls, so does great societies rise and fall.  It’s the cycle of life that we can watch across at least 10,000 years of organized civilization.  (Historical Decline blog post HERE)

The Gathering Storm

July 4th is an appropriate day to borrow Winston Churchill’s the gathering storm to describe the existential crisis that will envelope America within the next decade. There is no single cause of the gathering storm; in complex systems, dynamics feed back into one another, and the sum of destabilizing disorder is greater than a simple sum of its parts.

Causal factors can be roughly broken into two categories: systemic and social/economic. The central illusion of those who focus solely on social, political and economic issues as the sources of destabilization is that tweaking the parameters of the status quo is all that’s needed to right the ship: if only Trump were impeached, if only GDP hits 4% annual growth rate, if only the Federal Reserve started controlling the price of bat guano, etc., etc., etc.

The unwelcome reality is the systemic issues cannot be reversed with policy tweaks or shuffling those at the top of a crumbling centralized order. The systemic problems arise from the structures of centralization and monopoly capital, theinstitutionalization of perverse incentives and the depletion of natural capital: soil, water, fossil fuels, etc.

We can create “money” out of thin air but we can’t print fresh water, productive soil or affordable energy out of thin air.

Regardless of their ideological labels, centralized socio-economic systems follow an S-Curve of rapid expansion during a “boost phase,” a period of stable expansion (maturity) and then a period of stagnation and decline as the system’s participants do more of what’s failed, as they cannot accept that what worked so well in the past no longer works.

A successful model traps those within it; escape becomes impossible. That’s the lesson of the S-Curve:

The Ratchet Effect is another key reason why meaningful reform of the status quo is impossible. In flush times, budgets expand as easily as waistlines, ratcheting up to consume ever-higher revenues. But once revenues start declining, the administrative/consumerist status quo is fiercely resistant to any reduction.

Like a body which has grown fat from excessive consumption and a decline in vitality/ functionality, the status quo resists any reduction in staffing or spending, sacrificing muscle to keep its layers of fat untouched.

In other words, the social crises, the constitutional crises, the financial crises–all of these are to some degree mere manifestations of the failure of centralized systems that arose to benefit from conditions that no longer exist.

Our centralized institutions and systems are failing, and shuffling the management and tweaking the parameters cannot stave off collapse.

What nobody gorging at the trough of the status quo dares admit is the system is failing most of its participants, and this is the source of populism and other manifestations of social disorder. I often publish this chart, as it crystallizes and encapsulates the verboten reality of 21st century America: the few are skimming the vast majority of the rewards of the system, at the expense of the many.

The many are politically powerless and divested of capital. Our centralized system concentrates wealth and power into the very apex of the wealth-power pyramid. In this apex, wealth, power, and control of media and surveillance all mix easily: thus Bezos controls Amazon and The Washington Post and has long-established ties to the National Security State in what’s been aptly described as Surveillance Capitalism, a term that also describes Facebook and other quasi-monopolies of social media.

Amazon’s Fusion With The State Shows Neoliberalism’s Drift To Neo-Fascism.

Rather than admit the failure of our socio-economic system, those benefiting from the system’s gross imbalances are pursuing a multi-pronged strategy of control:

1. Propaganda. The basic idea here is simple: ignore what your own experience is telling you about the failure of our socio-economic system and believe a carefully tailored host of interconnected narratives that all is well and this is most prosperous, wonderful system in the galaxy, nay, the universe.

Anyone who challenges these narratives is quickly attacked and marginalized:a highly centralized state goes hand in hand with a highly centralized media. Anything outside this apex of wealth and power is dismissed as “fake news.”

For example, anyone who dares measure real-world inflation is quickly attacked and marginalized, least the restive masses finally awaken to the reality that the unprotected are being ravaged by 6% to 8% annual inflation in big-ticket items while the protected elites bask in subsidies that protect their self-serving fiefdoms from the harsh reality of rising inflation (i.e. loss of purchasing power).

2. Bribery and buy-offs such as debt forgiveness, tax breaks and Universal Basic Income (UBI). To calm the restive masses who have been disenfranchized, exploited and transformed into tax donkeys, those in the apex of power offer bribes and buy-offs: hey, let’s “forgive” student loan debt–but of course it’s not actually forgiven; the losses are simply transferred to the taxpayers.

Tax breaks and subsidies are used to mask the ever-greater share of the nation’s wealth being skimmed by junk fees, useless licencing, compliance penalties, and taxes on everything.

Universal Basic Income (UBI) is the ultimate systemic bribe. Having stripmined the unprotected non-elites of opportunity and capital, those at the top of the wealth-power pyramid are promoting basic material survival as the substitute for actually having a stake in the system.

The unspoken reality is that UBI is designed to give debt-serfs just enough income to keep servicing their debts. Why not bypass the charade of “helping the powerless” and transfer the taxpayers’ money directly to the banking sector?

The gathering storm cannot be dissipated with propaganda and bribes. The status quo is only hastening its demise with its strategy of misdirection and distraction.

My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition.

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